RBI Eases KYC for Corporate Franchisees of Money Changers
Current · Source: Reserve Bank of India · RBI/2009-10/112 · issued 03 Aug 2009 · ~1 min read
Quick answerRBI now allows AD Category-I/II and FFMCs to accept certified MoA, AoA, and Incorporation Certificate instead of police conduct certificates for corporate franchisee due diligence, easing compliance.
The rule, in the simplest words
Banks and money changers (ADs and FFMCs) can now use a company's official papers (MoA, AoA, Incorporation Certificate) instead of a police conduct certificate when checking if a corporate franchisee is trustworthy.
This rule only applies to companies (incorporated entities), not to individuals or other types of franchisees.
All other checks for franchisees must still be done exactly as before—only this one document is swapped.
Banks must update their checklist and the RMC-F form to show this new option for corporate franchisees.
How it plays out — a real example
Priya, a KYC & compliance officer in Indore, is onboarding a new corporate franchisee for her bank's money-changing service. Instead of waiting weeks for a police conduct certificate, she now accepts the company's certified Memorandum and Articles of Association and Certificate of Incorporation, saving time and hassle while still following the rules.
What changed
Previously, ADs and FFMCs had to obtain a conduct certificate from local police for all agents/franchisees. Now, for incorporated entities, they can accept certified copies of the Memorandum and Articles of Association and Certificate of Incorporation instead. The rest of the due diligence requirements remain unchanged.
What it means for you
This reduces a significant operational bottleneck for banks and FFMCs when onboarding corporate franchisees, as police certificates were often delayed or hard to get. It streamlines KYC without compromising on verification, since corporate documents are already registered with authorities. Banks should update their internal checklists and the RMC-F form for corporate franchisees accordingly.
What you must do
Update your due diligence checklist for corporate franchisees to accept certified MoA, AoA, and Incorporation Certificate in lieu of police conduct certificate.
Modify Item No. 6 of Form RMC-F in Annex-IV for corporate franchisees as per the circular.
Communicate this change to all relevant branches and franchisee onboarding teams.
Ensure all other provisions of paragraph (C) 4 of Annex-I remain strictly followed.
Who it affects
AD Category-I banks, AD Category-II banks, Full-Fledged Money Changers (FFMCs), Corporate franchisees of money changers
❓ Common questions
Does this circular apply to individual franchisees as well?
No, the relaxation is only for agents/franchisees that are incorporated entities. Individual franchisees still need to provide a conduct certificate from local police authorities.
What documents are now acceptable for corporate franchisee due diligence?
Certified copies of the Memorandum and Articles of Association and the Certificate of Incorporation are now acceptable in place of the police conduct certificate.
Do we need to update any forms because of this change?
Yes, Item No. 6 of Form RMC-F in Annex-IV of the earlier circular should be suitably modified for corporate franchisees.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/112
A. P. (DIR Series) Circular No.06
A. P. (FL/RL Series) Circular No. 01
August 3, 2009
To,
All Authorised Persons in Foreign Exchange
Madam / Sir,
Memorandum of Instructions governing money changing activities
Attention of Authorised Persons is invited to paragraph (C) 4 of Annex-I to the Memorandum of Instructions governing money changing activities, issued vide A. P. (DIR Series) Circular No. 57 [A.P. (FL/RL Series) Circular No. 04] dated March 9, 2009.
2. In terms of paragraph (C) 4 of Annex-I to the circular, ADs Category - I/ ADs Category - II/ FFMCs are required to obtain certain documents, including a conduct certificate from the local police authorities, while conducting the due diligence of their agents/ franchisees.
3. It has been brought to our notice that Authorised Persons have been experiencing difficulties in obtaining conduct certificate from local police authorities in respect of agents/ franchisees, which are incorporated entities. Accordingly, the existing requirement has been reviewed and ADs Category - I/ ADs Category - II/ FFMCs have been permitted to accept certified copy of the Memorandum and Articles of Association and Certificate of Incorporation in lieu of conduct certificate from the local police authorities, in respect of agents/ franchisees, which are incorporated entities. All other provisions of paragraph (C) 4 of the Annex-I to the aforementioned circular shall remain unchanged. Accordingly, Item No. 6 of the
Form RMC-F in Annex-IV of the circular may suitably be modified for corporate franchisees.
4. Authorised persons may bring the contents of this circular to the notice of their constituents concerned.
5. 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) and non-compliance with the guidelines would attract penal provisions of Section 11(3) of the Act ibid.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/112 · issued 03 Aug 2009. The plain-English explanation above is BankPulse’s own independent summary.
Communicate this change to all relevant branches and franchisee onboarding teams.
📜 Compliance
Update your due diligence checklist for corporate franchisees to accept certified MoA, AoA, and Incorporation Certificate in lieu of police conduct certificate.
Modify Item No. 6 of Form RMC-F in Annex-IV for corporate franchisees as per the circular.
Ensure all other provisions of paragraph (C) 4 of Annex-I remain strictly followed.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, AD Category-II banks, Full-Fledged Money Changers (FFMCs), Corporate franchisees of money changers), your first concrete step on “RBI Eases KYC for Corporate Franchisees of Money Changers” is: “Update your due diligence checklist for corporate franchisees to accept certified MoA, AoA, and Incorporation Certificate in lieu of police conduct certificate.” (RBI issued this 03 Aug 2009).
Circular: RBI/2009-10/112 -- RBI Eases KYC for Corporate Franchisees of Money Changers
Issued: 03 Aug 2009
Action required: Update your due diligence checklist for corporate franchisees to accept certified MoA, AoA, and Incorporation Certificate in lieu of police conduct certificate.
Action required: Modify Item No. 6 of Form RMC-F in Annex-IV for corporate franchisees as per the circular.
Action required: Communicate this change to all relevant branches and franchisee onboarding teams.
Action required: Ensure all other provisions of paragraph (C) 4 of Annex-I remain strictly followed.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 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=5195&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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