UCBs Allowed as Agents Under Money Transfer Schemes
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-2008/97 · issued 17 Jul 2007 · ~2 min read
Quick answerRBI now permits Primary (Urban) Co-operative Banks holding AD Category I or II licence to act as agents/sub-agents under Money Transfer Service Schemes, reversing a 2002 ban, subject to AML/KYC compliance and security deposit conditions.
What changed
Earlier, a September 2002 circular had prohibited UCBs from acting as agents or sub-agents under Money Transfer Service Schemes. This circular revokes that prohibition and allows eligible UCBs to participate, provided they meet specific conditions.
What it means for you
UCBs with AD licence can now earn fee income by facilitating cross-border money transfers, expanding their service portfolio. However, they must maintain strict AML/KYC standards and ensure payout reimbursements never exceed security deposits, adding operational and compliance responsibilities.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Verify your UCB holds a valid AD Category I or II licence before applying to act as agent/sub-agent.
Ensure robust AML/KYC processes are in place and pass supervisory review.
Arrange for the required security deposit: for agents, USD 50,000 or 3 days' average payout (whichever higher); for sub-agents, Rs 20 lakh or 3 days' average payout (whichever higher).
Monitor payout reimbursements to ensure they never exceed the security deposit held.
Do not appoint any other UCB or entity as your sub-agent.
Who it affects
Primary (Urban) Co-operative Banks holding AD Category I or II licence, Overseas principals and agents under Money Transfer Service Schemes, Customers of UCBs seeking inward remittance services
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 15:37 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Can a UCB without an AD licence act as an agent under this scheme?
No, only UCBs holding AD Category I or II licence are permitted to act as agents or sub-agents under Money Transfer Service Schemes.
What is the minimum security deposit required for a UCB acting as an agent?
The principal must maintain a foreign currency deposit with the designated bank equivalent to 3 days' average payout or USD 50,000, whichever is higher.
Can a UCB appoint another UCB as its sub-agent?
No, the circular explicitly prohibits any UCB from appointing any other UCB or entity as its sub-agent.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/97
UBD (PCB) Cir No. 8/16.12.000/2007-08
July 17, 2007
The Chief Executive Officers of
All Primary (Urban) Co-operative Banks
Dear Sir/Madam,
Appointment of UCBs as agents /
Sub- agents under Money Transfer Service Schemes.
Please refer to our circular UBD.POT/14/09.132.00/02-03 dated September 16, 2002 on the above subject, prohibiting UCBs to act as agents/sub-agents under Money Transfer Service Schemes.
2. We advise that the matter has been revisited and it has been decided that UCBs holding AD category I or II category licence may act as agents/sub-agents under Money Transfer Service Schemes which are in conformity with the guidelines issued by our Foreign Exchange Department, subject to the following conditions:
(i) Bank’s adherence to AML/KYC standards should be satisfactory.
(ii) The principal should maintain foreign currency deposits (USD) with the designated bank in favour of the agent which, at present, is equivalent to 3 days’ average payout or USD 50, 000 , whichever is higher.
(iii) Where the UCB is acting as a sub-agent, the agent should also maintain with the designated bank, security deposits equivalent to 3 days’ average payout or Rs 20.00 lakh, whichever is higher, in favour of the UCB sub-agents concerned.
(iv) The UCBs should ensure that the payouts not reimbursed do not, at any point of time, exceed the security deposits placed by the overseas principal /agent, as the case may be.
(v) No UCB should appoint any other UCB/entity as its sub-agent.
Yours faithfully,
(N.S.Vishwanathan)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/97 · issued 17 Jul 2007. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3724&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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