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Circular regarding instructions on money changing activities by Reserve Bank of India- (Reserve Bank of India) (27 May 2024)

MANU/APDR/0010/2024

Banking

1. Attention is invited to FED Master Direction No.3/2015-16 dated January 01, 2016 (updated from time to time) on Money Changing Activities.

2. In terms of extant instructions, Full Fledged Money Changers (FFMCs)/non-bank Authorised Dealers (ADs) Category-II may obtain their normal business requirements of foreign currency notes from other FFMCs and Authorised Dealers (ADs) in India. Further, they are also required to keep balances in foreign currencies at reasonable levels to avoid build- up of idle balances.

3. In this regard, it has been decided that from July 1, 2024, value of foreign currency notes sold by FFMCs/non-bank ADs Category -II to the public for permitted purposes should not be less than 75% of the value of foreign currency notes purchased from other FFMCs/ ADs, on a quarterly basis. Data of such sale and purchase should be maintained and made available for audit/inspection. FFMCs/ADs selling foreign currency may also ascertain the 'sale to public' requirement of the buying FFMCs/non-bank ADs Category II, by seeking relevant data from such entities.

4. Further, it has also been decided that FFMCs/non-bank ADs Category-II shall submit their annual audited balance sheet to the concerned Regional Office of the Reserve Bank along with a certificate from their statutory auditors regarding the NOF as on the date of the balance sheet, latest by October 31 of the year concerned.

5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

6. The aforesaid FED Master Direction No.3 is being updated to reflect these changes.

Tags : INSTRUCTIONS   MONEY CHANGING   CIRCULAR  

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