RBI Forex Norms Revised: Key Changes Explained

Mumbai, May 6 (PTI) The Reserve Bank has put in place revised norms for entities dealing in foreign exchange, whereby fresh licences will not be issued to money changers.

The Foreign Exchange Management (Authorised Persons) Regulations, 2026 is aimed at rationalising the authorisation and renewal framework for authorised persons and extend the principal-agent model for delivery of foreign exchange facility while maintaining appropriate checks and balances, the central bank said on Wednesday.

"The Reserve Bank has reviewed the existing framework for authorisation of any person as an Authorised Person under the Foreign Exchange Management Act, 1999, with the objective to rationalise the framework to improve delivery of foreign exchange services as well as easing compliance requirements," it added.

The norms mandate that all entities must obtain the RBI authorisation to undertake forex transactions and set out revised rules for different categories of authorised dealers.

Under the regulations, applications for fresh authorisation will be considered under three categories.

Banks can apply under AD Category I.

NBFCs and a full-fledged money changer or a forex correspondent functioning for at least two years with an average annual forex turnover of Rs 50 crore in the previous two financial years can apply as AD Category II entities.

Certain entities, including those intending to offer innovative products and services that may involve dealing in foreign exchange, will fall under AD Category III.

"Application for fresh authorisation as an FFMC shall not be considered by the Reserve Bank, except those under process as on the date of coming into force of these regulations," the norms, notified on April 30, said.

Entities seeking authorisation must be companies incorporated under the Companies Act, 2013, and meet minimum net worth requirements specified in the regulations.