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RBI eases location norms for Full Fledged Money Changers

Current · Source: Reserve Bank of India · RBI/2011-12/372 · issued 30 Jan 2012 · ~1 min read
Quick answerRBI has removed the criteria of outreach and locational advantage for FFMC license applications, giving authorised persons more flexibility in branch location selection.
The rule, in the simplest words
How it plays out — a real example

Sanjay, a money‑changer officer in Jaipur, wants to open a new branch in a busy market area. Because RBI no longer requires him to prove the location offers outreach or locational advantage, he can focus on customer traffic and business potential. He files the licence application, meets all other 2009 rules, and receives approval faster.

What changed

RBI has deleted the requirement for applicants to demonstrate increased outreach and locational advantage when applying for new Full Fledged Money Changer (FFMC) licenses. This change was made to provide more flexibility to authorised persons in choosing branch locations. All other existing instructions from the March 2009 circular remain unchanged.

What it means for you

Banks and other authorised persons can now set up FFMC branches without having to justify how the location improves outreach or offers locational advantage. This reduces the regulatory burden on applicants and speeds up the licensing process. It also allows entities to strategically place branches based on business needs rather than compliance criteria.

What you must do

Who it affects

Authorised Persons in foreign exchange, Banks with FFMC operations, Entities applying for new FFMC licenses

❓ Common questions

Does this circular change any other FFMC licensing requirements?

No, only the criteria related to outreach and locational advantage have been removed. All other instructions from the March 2009 circular remain unchanged.

When did this circular take effect?

The circular was issued on January 30, 2012, and took effect from that date.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/372 A. P. (DIR Series) Circular No.71  January 30, 2012 To All Authorised Persons in Foreign Exchange Madam/ Sir, Memorandum of Instructions governing money changing activities Attention of Authorised Persons is invited to the introduction given under Paragraph 2 and Paragraph 2 (iii) (i) of Part A of the 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 view of the recent measures adopted to provide more flexibility to the Authorised Persons in selecting the location for their branches, it has now been decided to remove the criteria relating to increase in outreach and locational advantage while considering the applications for issuance of fresh licenses for Full Fledged Money Changers (FFMC).   3. All the other instructions contained in the A.P.(DIR Series) Circular No.57 {A.P.(FL/RL Series ) Circular No.4} dated March 9, 2009 shall remain unchanged. 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 Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Meena Hemchandra) Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/372 · issued 30 Jan 2012. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Review your FFMC branch expansion plans to take advantage of the relaxed location criteria.
  • Communicate this change to your foreign exchange business teams and branch managers.
📜 Compliance
  • Ensure all other requirements from the March 2009 circular are still met when applying for new FFMC licenses.
  • Update internal compliance checklists to reflect the removal of outreach and locational advantage criteria.
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 Branch Manager at a bank this circular applies to (Authorised Persons in foreign exchange, Banks with FFMC operations, Entities applying for new FFMC licenses), your first concrete step on “RBI eases location norms for Full Fledged Money Changers” is: “Review your FFMC branch expansion plans to take advantage of the relaxed location criteria.” (RBI issued this 30 Jan 2012).

  1. Circular: RBI/2011-12/372 -- RBI eases location norms for Full Fledged Money Changers
  2. Issued: 30 Jan 2012
  3. Action required: Review your FFMC branch expansion plans to take advantage of the relaxed location criteria.
  4. Action required: Ensure all other requirements from the March 2009 circular are still met when applying for new FFMC licenses.
  5. Action required: Update internal compliance checklists to reflect the removal of outreach and locational advantage criteria.
  6. Action required: Communicate this change to your foreign exchange business teams and branch managers.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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=6969&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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