RBI drafts new rules for Authorised Persons to become Money Changers.
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First announced in RBI's statement on Development and Regulatory Politics dated June 8, 2023, a draft licensing framework in this regard, is available on the central bank's portal too. Also, RBI has invited comments and feedback on the framework.
Under this, a new category of money changers has been proposed to enhance the ease of doing business; they will be allowed to conduct money changing by becoming forex correspondents of Category-I and II authorised dealers (ADs), the draft on the RBI portal says.
The ADs need not seek authorisation from RBI; transactions carried out by forex correspondents on an AD's behalf, will be reflected in the books of the principal AD; and, forex correspondents will have a general permission to deal with the ADs in foreign exchange as permitted under the FCS (Financial Control System).
Additionally, the correspondents can buy and sell foreign currency notes/ travellers' cheques for foreign private and business travel, and can distribute forex prepaid cards under the terms and conditions stipulated by the principal AD.
Lastly, a forex correspondent cannot have a relationship with more than a single authorised dealer, and can make transactions only with the public or the principal AD.
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