What changed
This Master Circular (No. 09/2010-11) consolidated all existing MTSS instructions into a single document with a one-year sunset clause, effective July 1, 2010. It reiterated that only inward personal remittances are permissible under MTSS, and no outward remittances are allowed. The circular was set to be replaced by an updated version on July 1, 2011.
What it means for you
For banks and authorized persons acting as Indian Agents, this circular reaffirms the strict boundary of MTSS: only inward personal transfers (e.g., family maintenance, tourist remittances) are permitted, and outward flows are prohibited. Agents must ensure compliance with KYC/AML/CFT guidelines and cannot remit funds to overseas principals. The sunset clause signals RBI's intent to periodically update the framework.
What you must do
- Ensure your institution is an Authorised Dealer Category-I/II or Full Fledged Money Changer before applying as an Indian Agent.
- Submit applications to RBI's Forex Markets Division with required documents (undertaking, overseas principal details, branch list, estimated volume, audited accounts).
- Verify that all MTSS transactions are strictly inward personal remittances; no outward remittances are permitted.
- Maintain robust KYC/AML/CFT compliance for all remitters and beneficiaries.
- Prepare for the circular's replacement by July 1, 2011, and monitor RBI updates.
Who it affects
Authorised Dealer Category-I banks, Authorised Dealer Category-II institutions, Full Fledged Money Changers (FFMCs), Overseas Principals (money transfer companies), Indian Agents handling MTSS
What types of remittances are allowed under MTSS?
Only inward personal remittances, such as family maintenance funds and remittances for foreign tourists visiting India. No outward remittances from India are permitted under the scheme.
Who can apply to become an Indian Agent under MTSS?
Only Authorised Dealer Category-I banks, Authorised Dealer Category-II institutions, or Full Fledged Money Changers (FFMCs) as defined in RBI circular A.P. (DIR Series) Circular No. 25 dated March 6, 2006.
What documents are needed for the Indian Agent application?
The application must include an undertaking of no pending legal cases, details of the overseas principal, branch list in India, estimated monthly/yearly business volume, and audited balance sheets for the last two financial years.