What changed
RBI issued Master Circular No.13/2011-12 to consolidate all existing instructions on money changing activities into a single document. The circular includes a sunset clause, meaning it will be withdrawn on July 1, 2012, and replaced by an updated version.
What it means for you
Banks and money changers now have a single reference point for all rules on licensing, branch approvals, franchisee appointments, and KYC/AML compliance for money changing. The sunset clause ensures the circular is temporary, requiring entities to stay alert for the updated version in 2012.
What you must do
- Review the consolidated instructions in this Master Circular for all money changing operations.
- Ensure compliance with KYC/AML/CFT guidelines as detailed in Annex-I.
- Prepare for the sunset clause by tracking the upcoming updated Master Circular expected by July 1, 2012.
- Verify that all franchisee appointments adhere to the restrictions on foreign currency sales near Pakistan and Bangladesh borders.
Who it affects
Authorised Dealer Category-I Banks, Authorised Dealer Category-II, Full Fledged Money Changers (FFMCs), Franchisees of ADs and FFMCs
What is the sunset clause in this Master Circular?
The circular will stand withdrawn on July 1, 2012, and will be replaced by an updated Master Circular on the same subject.
Can franchisees sell foreign currency?
Generally, franchisees cannot sell foreign currency, except those within 10 km of Pakistan or Bangladesh borders, which may sell the bordering country's currency with prior RBI approval.
What are the entry norms for an FFMC licence?
The applicant must be a company registered under the Companies Act, 1956, and meet the minimum Net Owned Funds (NOF) requirement as specified in the circular.