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RBI scraps 1:1 metro-non-metro branch ratio for money changers

Current · Source: Reserve Bank of India · RBI/2011-12/242 · issued 01 Nov 2011 · ~1 min read
Quick answerRBI has removed the mandatory 1:1 ratio between metro and non-metro branches for Authorised Money Changers (AMCs), giving them more flexibility to open offices in metropolitan cities without needing a corresponding non-metro branch.
The rule, in the simplest words
How it plays out — a real example

Rohit Patel, the foreign‑exchange manager at a bank in Mumbai, decides to open a new metro branch to serve more city customers. Because the 1:1 rule is gone, he does not need to open a new non‑metro branch at the same time, and he informs his planning team that the move follows RBI’s latest guidance.

What changed

Previously, AMCs could only open additional offices in metro cities if they had one non-metro office for every metro office (1:1 ratio). This circular removes that condition entirely, allowing AMCs to decide branch locations freely, though RBI expects diversification to meet tourist demand.

What it means for you

Banks and other authorised money changers can now expand their metro presence without being forced to maintain non-metro branches, reducing compliance burden and operational costs. This may lead to more competitive forex services in urban areas, but RBI still expects balanced geographic coverage.

What you must do

Who it affects

Authorised Money Changers (AMCs), Banks with forex operations, Branch expansion planners in financial institutions

❓ Common questions

Does this mean I can open any number of metro branches without any non-metro branches?

Yes, the 1:1 ratio is removed, but RBI expects branches to be diversified and meet tourist demand. There is no explicit cap, but all other instructions remain unchanged.

Are there any new conditions for opening metro branches now?

No new conditions are introduced. The only change is the removal of the 1:1 ratio. You must still comply with all other existing guidelines under the Memorandum of Instructions.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/242 A.P. (DIR Series) Circular No. 41 November 01, 2011 To, All Authorised Persons in Foreign Exchange Madam/ Sir, Memorandum of Instructions governing money changing activities Attention of Authorised Persons is invited to Para-3 of Part B of the Annex- I to the Memorandum of Instructions to Authorised Money Changers (AMCs), issued vide A. P. (DIR Series) Circular No. 57 [A.P. (FL/RL Series) Circular No. 04] dated March 09, 2009 in terms of which applications from AMCs for additional offices in metropolitan cities are considered if the total offices (including proposed offices) of the applicant are in the ratio 1:1 (i.e. the applicant has one non-metropolitan office for every office in a metro). 2. In order to provide more flexibility, to authorised persons to decide the location of their branches, it has been decided to dispense with the criteria of 1:1 ratio between metro and non-metro branches. However, we expect branches to be diversified and to be meeting the demand of tourists, etc. All the other instructions shall remain unchanged. 3. Authorised Persons may bring the contents of this circular to the notice of their constituents concerned. 4. The directions contained in this Circular have been issued under Sections 10(4) and 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, (Meena Hemchandra) Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/242 · issued 01 Nov 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Branch Manager at a bank this circular applies to (Authorised Money Changers (AMCs), Banks with forex operations, Branch expansion planners in financial institutions), your first concrete step on “RBI scraps 1:1 metro-non-metro branch ratio for money changers” is: “Update internal branch expansion policies to reflect removal of the 1:1 ratio requirement.” (RBI issued this 01 Nov 2011).

  1. Circular: RBI/2011-12/242 -- RBI scraps 1:1 metro-non-metro branch ratio for money changers
  2. Issued: 01 Nov 2011
  3. Action required: Update internal branch expansion policies to reflect removal of the 1:1 ratio requirement.
  4. Action required: Ensure new branch openings still align with RBI's expectation of diversification and tourist demand.
  5. Action required: Communicate this change to your forex and branch planning teams for strategic decisions.
  6. Owner: ____________ Target date: ____________
  7. Board/committee approval needed? Y / N
  8. 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.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6792&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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