RBI proposes to introduce new category of money changers

The Reserve Bank of India proposed draft norms aimed at rationalising the authorisation of money changers in view of the widespread availability of banking services to the public and to explore alternative models for facilitating foreign exchange-related services.

The authorisation framework under the Foreign Exchange Management Act (FEMA) was last reviewed in March 2006.

“The RBI has reviewed the extant authorisation framework under FEMA with an objective to further improve the ease with which foreign exchange transactions can be undertaken by users, and at the same time, strengthen the regulatory oversight/framework governing authorised persons (APs),” the draft norms stated.

This is in view of the accelerated universal reach of financial services due to financial inclusion initiatives, increasing integration of the Indian economy with the global economy, digitisation of payment systems, evolving institutional structure, etc., over the past two decades, the norms stated.