RBI Proposes New Money Changer Category - Forex Correspondents
By Rediff Money Desk, MUMBAI Dec 26, 2023 20:41
Reserve Bank of India proposes a new category of money changers, Forex Correspondents (FxCs), to expand foreign exchange services and enhance ease of doing business.
Mumbai, Dec 26 (PTI) The Reserve Bank on Tuesday proposed to introduce a new category of money changers who may conduct business through an agency model by becoming Forex Correspondents (FxCs) of Authorised Dealers.
Currently, the Reserve Bank issues licences to authorised dealers -- banks authorised to deal in foreign exchange -- and full-fledged money changers. Licences are also granted to financial and other institutions to carry out specific foreign exchange transactions related to their business.
The framework for licensing of Authorised Persons (APs) under FEMA, 1999 was last reviewed in March 2006.
The RBI said that keeping in view the progressive liberalisation under FEMA, increasing integration of the Indian economy with the global economy, digitisation of payment systems, evolving institutional structure, over the last two decades, it has been decided to rationalise and simplify the licensing framework for APs.
The review aims to meet the emerging requirements of the rapidly growing Indian economy, and achieve operational efficiency in the delivery of foreign exchange facilities to common persons, tourists, and businesses while maintaining appropriate checks and balances, it said while issuing draft Licensing Framework for Authorised Persons (APs) under FEMA.
"To enhance the ease of doing business, it is proposed to introduce a new category of money changers who may conduct money-changing business through an agency model by becoming Forex Correspondents (FxCs) of Category-I and Category-II Authorised Dealers. Such entities shall not be required to seek authorisation from the Reserve Bank," the draft said.
The draft also proposed to introduce Forex Correspondent Scheme (FCS), which will be based on a principal-agency model where AD Category-I or AD Category-II will act as the principal for the FxCs. The objective behind FCS is to increase the reach of foreign exchange services.
The central bank has sought comments from stakeholders on the draft by January 31, 2024.
Currently, the Reserve Bank issues licences to authorised dealers -- banks authorised to deal in foreign exchange -- and full-fledged money changers. Licences are also granted to financial and other institutions to carry out specific foreign exchange transactions related to their business.
The framework for licensing of Authorised Persons (APs) under FEMA, 1999 was last reviewed in March 2006.
The RBI said that keeping in view the progressive liberalisation under FEMA, increasing integration of the Indian economy with the global economy, digitisation of payment systems, evolving institutional structure, over the last two decades, it has been decided to rationalise and simplify the licensing framework for APs.
The review aims to meet the emerging requirements of the rapidly growing Indian economy, and achieve operational efficiency in the delivery of foreign exchange facilities to common persons, tourists, and businesses while maintaining appropriate checks and balances, it said while issuing draft Licensing Framework for Authorised Persons (APs) under FEMA.
"To enhance the ease of doing business, it is proposed to introduce a new category of money changers who may conduct money-changing business through an agency model by becoming Forex Correspondents (FxCs) of Category-I and Category-II Authorised Dealers. Such entities shall not be required to seek authorisation from the Reserve Bank," the draft said.
The draft also proposed to introduce Forex Correspondent Scheme (FCS), which will be based on a principal-agency model where AD Category-I or AD Category-II will act as the principal for the FxCs. The objective behind FCS is to increase the reach of foreign exchange services.
The central bank has sought comments from stakeholders on the draft by January 31, 2024.
Read More On:
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- Srestha Finvest
- 0.66 (+ 4.76)
- 32896927
- Vodafone Idea L
- 8.45 (+ 4.06)
- 28557277
- Standard Capital
- 1.14 (+ 0.88)
- 17361276
- Alstone Textiles
- 0.83 (+ 5.06)
- 14796552
- AvanceTechnologies
- 0.89 (+ 4.71)
- 10049569
MORE NEWS
Hero MotoCorp Sales Surge 18% in October
Hero MotoCorp's sales rose by 18% in October, reaching 6.8 lakh units. Strong demand...
Gold, Silver Jewelry Export Norms Revised:...
The Indian government has revised norms for gold, silver, and platinum jewelry exports,...
Sensex, Nifty Rise in Muhurat Session: Samvat...
Indian benchmark indices Sensex and Nifty surged in the Muhurat trading session on...