The Reserve Bank of India (RBI) on February 29, 2024, issued a notification regarding updated Master Direction - Money Changing Activities.
In order to ensure sufficient access to foreign exchange services for the general public, broaden the range of activities authorized persons can engage in, and promote efficient customer service through competition, the Reserve Bank currently issues authorizations under Section 10(1) of the Foreign Exchange Management Act, 1999, to:
•Select banks as Authorised Dealers Category-I, enabling them to conduct all permissible current and capital account transactions in accordance with regulatory directives.
•Select entities as Authorised Dealers Category-II, allowing them to handle specified non-trade related current account transactions, engage in all activities permitted to Full Fledged Money Changers (FFMCs), and undertake any additional activities determined by the Reserve Bank.
•Select financial and other institutions as Authorised Dealers Category-III, permitting them to carry out specific foreign exchange transactions incidental to their business or activities.
•Designate registered companies as Full Fledged Money Changers (FFMCs), empowering them to engage in the purchase and sale of foreign exchange for specified purposes only.
The guidelines pertaining to money-changing activities, including the authorization and operation of FFMCs, non-bank ADs Category II, and franchisees of Authorised Persons, as well as the conduct of foreign exchange transactions with customers, are consolidated in the enclosed Master Direction. This direction is issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999, and does not supersede any permissions or approvals required under other laws.
The list of underlying notifications/circulars forming the basis of this Master Direction is provided in the Appendix. Reporting instructions can be found in the Master Direction – Reporting under Foreign Exchange Management Act, 1999, dated January 01, 2016, and amended periodically. Authorized Persons are encouraged to refer to the respective circulars/notifications for detailed information, as needed.
[Notification No. RBI/FED/2015-16/17FED Master Direction No.3/2015-16]
