What changed
RBI issued a consolidated Memorandum of Instructions governing money changing activities, replacing the earlier 2002 circular and all subsequent instructions. The new memorandum integrates AML guidelines issued in 2006 and other updates into one document.
What it means for you
Banks and authorised money changers now have a single reference for compliance, reducing confusion from multiple circulars. Non-compliance with the new guidelines will attract penal provisions under FEMA, so lenders must update their internal procedures accordingly.
What you must do
- Review the new Memorandum of Instructions (Annex to the circular) and update your internal policies for money changing activities.
- Ensure your AML compliance framework for money changing aligns with the consolidated guidelines.
- Communicate the circular's contents to all relevant branches and constituents handling foreign exchange.
- Train staff on the updated procedures to avoid penal action under FEMA.
Who it affects
All Authorised Persons in Foreign Exchange, Authorised Money Changers (AMCs), Banks handling money changing activities, Compliance teams dealing with foreign exchange
What is the key change in this circular?
RBI has consolidated all previous instructions on money changing, including AML guidelines, into a single Memorandum. This replaces the 2002 circular and subsequent updates.
What happens if we don't comply with the new guidelines?
Non-compliance will attract penal provisions under Section 11(3) of FEMA, 1999. Ensure your operations are updated to avoid penalties.