Memorandum of
Instructions to Authorised Money Changers (AMCs)
AP (DIR Series) (2002-2003) Circular No. 43, dated 12-11-2002
Memorandum
of Instructions to Authorised Money Changers (AMCs)
Attention
of the Full Fledged Money Changers (FFMCs) and Restricted Money Changers (RMCs)
is invited to the Memorandum FLM and Memorandum RLM containing the procedural
instructions issued to FFMCs and RMCs respectively.
2. The
Reserve Bank has now brought out the Memorandum of Instructions to Authorised
Money Changers (AMCs) i.e. Full Fledged Money Changers and Restricted
Money Changers, containing procedural instructions issued to authorised money
changers, for adherence while undertaking money changing transactions. A copy
of the Memorandum AMC is enclosed.
3. The directions
contained in the Memorandum AMC, supercede the instructions contained in the
existing Memorandum FLM/RLM issued in June 1999, as amended from time to time.
4. FFMCs/RMCs
may, however, continue to maintain the same set of books/registers as hitherto.
A revised FLM 8 designed to capture data relating to purchases from franchisees
is at Annexure.
5. Authorised
dealers may bring the contents of this circular to the notice of their
constituents concerned.
6. The
directions contained in this circular have been issued under section 10(4) and
section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
ANNEXURE
Summary statement of purchases and sale of foreign
currency
notes during the month of…………………………., 200
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Name and address of money changer |
RBI Licence No. .................... |
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US $ |
£ |
EURO |
JY etc. |
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A. Opening balance |
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Purchase of foreign currency notes from |
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(a) Public |
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(b) RMCs/FFMCs/ADs
including imports |
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(c) Franchisees |
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B. Total Purchases (a) + (b) |
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Sales of foreign currency notes under |
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(a) BTQ |
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(b) Business Visits |
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(c) Sales to other FFMCs/ADs including exports |
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C. Total Sales [(a) + (b) + (c)] |
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Closing balance (A + B - C) |
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We
hereby certify that the statement is a true account of all transactions
undertaken during the month in accordance with the Exchange Control
Regulations.
Place
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(Signature of Authorised
Official) |
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Stamp |
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Date : |
Name
: ......................................... |
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Designation
: ............................ |
AMC
MEMORANDUM OF INSTRUCTIONS TO AUTHORISED MONEY CHANGERS
Authorised
Money Changers (AMCs) are entities licensed by the Reserve Bank under section
10 of the Foreign Exchange Management Act, 1999. An AMC may either be a Full Fledged
Money Changer (FFMC) or a Restricted Money Changer (RMC). FFMCs are authorised
to purchase foreign exchange from residents and non-residents visiting India,
and to sell foreign exchange for certain approved purposes. RMCs are authorised
only to purchase foreign exchange from residents and non-residents. FFMCs may
appoint franchisees to undertake purchase of foreign currency as per the Scheme
announced by the Reserve Bank. A copy of the Scheme is given in the Annexure.
Note :- RMCs and franchisees of FFMCs functioning within 10 kms.
from the borders of Pakistan and Bangladesh may also sell the currency of the
bordering country, with the prior approval of the Reserve Bank.
(i) This
Memorandum contains directions which AMCs should strictly observe in their
dealings. Amendments to the Memorandum will be circulated in the form of A.M.
(F.L. Series) circulars.
(ii) Directions
contained in this Memorandum have been issued under section 11(1) of Foreign
Exchange Management Act, 1999 (42 of 1999).
(i) Foreign
exchange in any form can be brought into India freely without limit provided it
is declared on the Currency Declaration Form (CDF) on arrival to the Custom
Authorities. When foreign exchange brought in the form of currency notes or
travellers cheques does not exceed US $ 10,000 or its equivalent and/or the
value of foreign currency notes does not exceed US $ 5,000 or its equivalent,
declaration thereof on CDF is not insisted upon.
(ii) Taking
out foreign exchange in any form, other than foreign exchange obtained from an
authorised dealer or a money changer is prohibited unless it is covered by a
general or special permission of Reserve Bank. Non-residents, however have
general permission to take out an amount not exceeding the amount originally
brought in by them subject to compliance with the provisions of sub-para (i)
above.
(i) AMCs/franchisees
may freely purchase foreign currency notes, coins and travellers cheques from
residents as well as non-residents. Production of passport need be insisted
upon only while encashing travellers cheques tendered by non-residents. Where
the foreign currency was brought in by declaring on form CDF, the tenderer
should be asked to produce the same. The production of the form may, however,
be waived if for any reason, the tenderer is unable to produce it.
(ii) AMCs
may sell Indian rupees to foreign tourists/visitors against International
Credit Cards and take prompt steps to obtain reimbursement through normal
banking channels.
(a) AMCs
may issue certificate of encashment when asked for in cases of purchases from
the public. These certificates bearing authorised signatures should be issued
on the letter head of the money-changer and proper record maintained.
(b) In
cases where encashment certificate is not issued, attention of the customers
should be drawn to the fact that unspent local currency held by non-residents
will be allowed to be converted into foreign currency only against production
of a valid encashment certificate.
FFMCs
may purchase from other FFMCs,RMCs and authorised dealers any foreign currency
notes, coins and encash travellers cheques tendered in the normal course of
business. Rupee equivalent of the amount of foreign exchange purchases should
be paid only by way of crossed account payee cheque/Demand Draft.
(I) Private Visits
FFMCs
may sell exchange upto the prescribed ceiling in the form of foreign currency
notes/coins and travellers cheques to eligible resident Indian citizens for
undertaking one or more private visits to any country abroad (except Nepal and
Bhutan). Exchange for such visits may be released on the basis of declaration
given by the traveller regarding the amount of foreign exchange availed of
during a calendar year. Foreign nationals permanently resident in India are
also eligible to avail of this quota for private visits provided the applicant
is not availing of facilities for remittance of his salary, savings etc. abroad
in terms of the existing Exchange Control regulations.
(II) Business visits :
FFMCs
may sell exchange in the form of foreign currency notes/coins and traveller
cheques to eligible travellers for business travel or for attending conference
or specialised training.
Quantum of Exchange :
Amount
prescribed by Reserve Bank from time to time.
(i) The sale of foreign exchange should
be made only on personal application and identification. While issuing
travellers’ cheques, the condition for issue stipulated by the issuing company
should be scrupulously observed and acknowledgement for receipt of travellers
cheques duly obtained.
(ii) Payment in excess of Rs. 50,000
towards foreign exchange sold should be received only by account payee
cheque/demand draft. For this purpose, sales in instalments, should be reckoned
as a single drawal for the journey.
(iii) The sale of foreign currency/notes and
coins within the overall entitlement of foreign exchange, should be restricted
to the limits prescribed by Reserve Bank from time to time.
FFMCs
may convert into foreign currency, unspent Indian currency held by
non-residents at the time of their departure from India, provided a valid
Encashment Certificate is produced.
Note : FFMCs may convert at their discretion, unspent Indian
currency up to Rs.10,000 in the possession of non-residents if, for bona
fide reasons, the person is unable
to produce an Encashment Certificate after ensuring that the departure is
scheduled to take place within the following seven days.
FFMCs
may issue a cash memo, if asked for, on official letterhead to travellers to
whom foreign currency is sold by them. The cash memo may be required for
production to emigration authorities while leaving the country.
AMCs
may put through transactions relating to foreign currency notes and travellers
cheques at rates of exchange determined by market conditions.
AMCs
should display at a prominent place in or near the public counter, a chart
indicating the rates for purchase/sale of foreign currency notes and travellers
cheques.
(i) FFMCs
should keep balances in foreign currencies at reasonable level and avoid build
up of idle balances with a view to speculating on currency movements.
(ii) RMCs/franchisees
should surrender collection of foreign currency notes, coins and travellers
cheques to an authorised dealer or to a FFMC within seven working days.
(iii) The
transactions between authorised dealers, FFMCs and RMCs should, however, be
settled by way of account payee crossed cheques/demand drafts. Under no
circumstances should settlement be made in cash.
(i) FFMCs
may obtain their normal business requirements of foreign currency notes from
other AMCs (including RMCs)/authorised dealers in foreign exchange in India,
against payment in rupees made by way of account payee crossed cheque/Demand
Draft.
(ii) Where
FFMCs are unable to replenish their stock in this manner, they may make an
application to the Central Office, Reserve Bank through an authorised dealer
for permission to import foreign currency into India. The import should take place
through the designated authorised dealer through whom the application is made.
Export/Disposal of surplus Foreign Currency Notes/Travellers
Cheques
FFMCs
may export surplus foreign currency notes/encashed travellers cheques to an
overseas bank through the medium of designated authorised dealer in foreign
exchange for realisation of the value through the latter. FFMCs may also export
surplus foreign currency to private money changers abroad subject to the
condition that either the realisable value is credited in advance to the A.D.’s
nostro account or a bank guarantee is issued by an international bank of repute
covering the full amount of the foreign currency notes/coins to be exported.
In
the event of foreign currency notes purchased being found fake/forged
subsequently, AMCs may write- off upto USD 2000 per year after approval of
their Top Management after exhausting all available options for recovery of the
amount. Any write-off in excess of the above amount, would require the approval
of the concerned Regional Office of the Reserve Bank.
(i) AMCs
shall maintain such registers and books of account as prescribed by the Reserve
Bank from time to time
(ii)
All registers and books should be
kept up-to-date, cross-checked and balances verified daily.
(iii) Transactions
not pertaining to money-changing business of the AMC should not be mixed up
with money-changing transactions. In other words, the registers and books of
account should show clearly the trail of transactions pertaining to
money-changing business.
(iv) Separate
registers should be maintained for each establishment, if the AMC maintains
more than one place of business.
(i) FFMCs
should submit to the office of Reserve Bank which has issued the
licence/unified licence, a monthly consolidated statement for all its offices
in form FLM 8 so as to reach Reserve Bank not later than the 10th of the
succeeding month.
(ii) Similarly
RMCs should submit to the office of Reserve Bank under whose jurisdiction they
are functioning, a quarterly statement in form RLM 3. The statement duly
certified by the Authorised Dealer/FFMC should reach Reserve Bank not later
than the 10th day of the month following the quarter. In case the collections
of foreign currencies are surrendered to different authorised dealers/FFMCs,
separate quarterly statements should be prepared to facilitate independent
certification by each such authorised dealer/FFMC.
(iii) AMCs
should submit to the Reserve Bank a monthly statement indicating details of
receipt/purchase of US $ 10,000/its equivalent and above per transactions
within 10 days of the close of the month. FFMCs should include transactions of
their franchisees in their statement.
Section
12(1) of Foreign Exchange Management Act, 1999, empowers any officer of Reserve
Bank specially authorised in this behalf to inspect the books and accounts and
other documents of AMCs. AMCs should provide all assistance and co-operation to
Inspecting Officers in carrying out their inspection. Failure to produce any
books of account or other document or to furnish any statement or information
or to answer any question relating to the money-changing transactions to the
Inspecting Officers, shall be deemed to be a contravention of the provisions of
the Act.
(i)
FFMCs should put in place a system
of Concurrent Audit of the transactions undertaken by them.
(ii) All
single branch FFMCs having a turnover of more than USD 100,000 or equivalent
per month and all multiple branch FFMCs should institute a system of monthly
audit. Single branch FFMCs having turnover of less than USD 100,000 or its
equivalent may institute a system of quarterly audit.
(iii) Appointment/selection
of auditors is left to the discretion of the FFMCs. The auditors should check
all the transactions of the FFMCs. The Statutory Auditors would be required to
certify that the Concurrent Audit and the internal control systems are working
satisfactorily.
AMCs
should apply for renewal of licence at least 3 months in advance of the expiry
of the current licence to the Regional Office of Reserve Bank in whose
jurisdiction their Head Office is situated.
AMCs
are authorised to transact money-changing business only at the location or
locations specifically indicated in the licence. If it is intended to provide
money-changing facilities on a temporary basis on certain special occasions, a
separate application should be made for the purpose to the concerned Regional
Office of Reserve Bank giving full details such as period for which the
exchange counter will be operated, volume of business expected, manner of
accounting of the transactions, letter from organisers making available venue
for the money changing facilities, etc.
Reserve
Bank may revoke the licence granted to an AMC at any time for reasons of public
interest or if the AMC has not complied with any of the conditions of the
money-changing licence issued by Reserve Bank or has made any false declaration
or has not conducted the business in accordance with the provisions of this
Memorandum read with the amendments issued from time to time or has contravened
any of the Exchange Control regulations.
Annexure
SCHEME FOR AUTHORISED DEALERS AND FULL-FLEDGED MONEY CHANGERS APPOINTING AGENTS/FRANCHISEES FOR UNDERTAKING RESTRICTED MONEY CHANGING
The
objective of the Scheme is to provide easier conversion facilities for
travellers and tourists, including NRIs, by enlarging the network of money
changing facilities in the country. It is expected that the new facility given
below, will enable banks and full-fledged money changers to provide such
facilities at all tourist centres and major cities for extended hours and on
holidays.
Under
the proposed Scheme, in addition to the existing facilities, RBI would freely
permit Banks i.e. ADs and FFMCs to enter into agency/franchising
agreements at their option with entities for the purpose of carrying on
Restricted Money Changing business i.e. conversion of foreign currency
notes, coins or travellers cheques into rupees.
A
franchisee can be any entity who has a place of business and whose bona fides are acceptable to the
AD/FFMC. These franchisees would undertake only restricted money changing
business.
Existing
RMCs who are licensed by the Reserve Bank are free to undertake money changing under
this scheme as a franchisee of the AD/FFMC on surrendering the existing RBI
licence. Those who do not opt for operation under this Scheme may continue to
undertake existing money changing business until further notice.
The
Franchiser i.e. an AD or an FFMC would need to apply to the Reserve Bank
in Form RMC-F for putting in place arrangements under this Scheme. The
application should be accompanied by a declaration that while selecting the
franchisees adequate due diligence has been carried out and that such entities
have undertaken to comply with all the provisions of the franchising
agreement/prevailing RBI regulations regarding money changing. Approvals would
be issued by the Reserve Bank on a one time basis. Thereafter, as and when new
agency/franchise agreements are entered into, these would have to be reported
to the Reserve Bank on a post facto basis along with similar declaration
as indicated above.
Franchisers
are free to decide on the tenor of the arrangement as also the commission or
fee through mutual agreement with the franchisee.
The
Agency/Franchise agreement to be entered into by an AD/FFMC should, however,
include the following salient features :
(a) The display of exchange rates by the
franchisee. Exchange Rate of foreign currency into rupees should be the same or
close to the daily exchange rate charged by the ADs/FFMC at its branches.
(b) The surrender of collections by the
franchisee to the franchiser or other authorised persons, as may be agreed
upon, within 7 days.
(c) The
maintenance of proper record of transactions by the franchisee.
(d) The on-site inspection of premises and
records of the franchisee by the franchiser at least once a year.
The
franchisers i.e. ADs/FFMCs would be expected to put in place adequate
arrangements for reporting of transactions by the franchisees to ADs/FFMCs in a
simple format to be prescribed by them on a regular basis, say at monthly
intervals.
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1. |
Name of
the AD/FFMC |
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2. |
Name and
address of the franchisees |
Details
of locations |
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(i) |
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(ii) |
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(iii) |
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etc. |
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3. |
Arrangements
in place to surrender the foreign exchange |
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4. |
Reporting
and Inspection arrangements. |
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Authorised Signatory |
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Date: |
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MEMORANDUM OF INSTRUCTIONS TO AUTHORISED MONEY
CHANGERS
This
Memorandum (AMC) contains procedural instructions issued to authorised money
changers for adherence while undertaking money changing transactions. The
directions contained herein have been issued under section 10(4) and section
11(1) of Foreign Exchange Management Act, 1999 (42 of 1999).