What changed
Previously, Rupee Drawing Arrangements (RDAs) for inward remittances via Exchange Houses were permitted only in Gulf countries, Hong Kong, and Singapore. This circular extends RDAs under Speed Remittance procedures to Exchange Houses in Malaysia. All other existing instructions remain unchanged.
What it means for you
Banks can now facilitate faster, lower-cost inward remittances from Malaysia through Exchange Houses, potentially increasing remittance volumes. This expansion requires banks to update their internal policies and ensure compliance with the existing RDA framework for the new jurisdiction.
What you must do
- Update internal guidelines to include Malaysia under Rupee Drawing Arrangements for Speed Remittance procedures.
- Ensure Exchange Houses in Malaysia meet all existing due diligence and documentation requirements as per earlier circulars.
- Train staff on the new jurisdiction and maintain records of transactions under the expanded RDA.
- Notify constituents about the availability of remittance services from Malaysia through Exchange Houses.
Who it affects
AD Category-I banks, Exchange Houses in Malaysia, Remittance customers sending money from Malaysia to India
What is the Rupee Drawing Arrangement (RDA)?
RDA is a mechanism allowing Exchange Houses abroad to facilitate inward remittances to India by maintaining Rupee Vostro accounts with AD Category-I banks, subject to RBI approval.
Does this circular apply to all types of remittances from Malaysia?
No, it applies only to Speed Remittance procedures under RDA. Other types of remittances or arrangements remain governed by existing instructions.
Do banks need fresh RBI approval for each Exchange House in Malaysia?
The circular extends the arrangement to Malaysia, but banks must still comply with prior approval requirements as specified in the original 2008 circular and subsequent amendments.