Authorised Dealers – RBI issues clarifications
The Scheme
With a view to providing adequate foreign exchange facilities to common persons for efficient customer service through competition there was a need to widen the scope of activities which the Authorised Persons are currently eligible to undertake and also to increase the number of entities that are eligible to sell foreign exchange to public for their day-to-day current account transactions. The Reserve Bank has, therefore, decided to grant licences to certain entities to undertake more transactions, in addition to what Full Fledged Money Changers (FFMCs) are currently permitted, by authorising them to undertake release / remittance of foreign exchange for certain non-trade related current account transactions. Such entities will be called Authorised Dealers – Category II (ADs - Category II).
ADs will be permitted to release / remit foreign exchange for the following transactions:
a. Private Visits,
b. Remittance by tour operators / travel agents to overseas agents / principals / hotels,
c. Business Travel,
d. Fee for participation in global conferences and specialized training,
e. Remittance for participation in international events / competitions (towards training, sponsorship and prize money).
f. Film shooting,
g. Medical Treatment abroad,
h. Disbursement of crew wages,
i. Overseas Education,
j. Remittance under educational tie up arrangements with universities abroad,
k. Remittance towards fees for examinations held in India and abroad and additional score sheets for GRE, TOEFL etc.,
l. Employment and processing, assessment fees for overseas job applications,
m. Emigration and Emigration Consultancy Fees,
n. Skills / credential assessment fees for intending migrants,
o. Visa fees,
p. Processing fees for registration of documents as required by the Portuguese / other Governments,
q. Registration / Subscription / Membership fees to International Organizations.
Who are eligible?
A. Existing Full-fledged Money Changers (FFMCs).
B. Urban Co-operative Banks (UCBs)
C. Regional Rural Banks (RRBs)
5. Opening of Foreign Currency Accounts (Nostro) abroad. [What is nostro? See Greek and Latin today]
The entities proposed to be licensed are being permitted to undertake the transactions that involve conversion of one currency into another. Such transactions may not necessarily require opening and maintaining foreign currency denominated (NOSTRO) account with a bank outside India. However, to facilitate issuance of foreign currency draft, etc. for such transactions, they may enter into arrangements with banks authorised to deal in foreign exchange in India.
See RBI Circular No 25, Dated : March 6, 2006