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Master Circular on Rupee/Foreign Currency Vostro Accounts for Exchange Houses

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2012-13/3 · issued 09 Apr 2013 · ~2 min read

Quick answerRBI consolidated guidelines for AD Category-I banks on opening and maintaining Rupee/Foreign Currency Vostro accounts for non-resident Exchange Houses. Key rules: prior RBI approval for first arrangement, external audit may be done after 20 RDAs, and compliance with FATF standards with specific procedures for different countries.

What changed

This Master Circular consolidates all existing instructions on Rupee/Foreign Currency Vostro accounts for non-resident Exchange Houses into a single document. It includes a sunset clause, meaning it will be withdrawn on July 1, 2013, and replaced by an updated version. The circular covers operational procedures, permitted transactions, drawing arrangements, and reporting requirements.

What it means for you

Banks must follow a structured approval process: seek RBI approval for the first Rupee Drawing Arrangement (RDA) with an Exchange House, then inform RBI for subsequent ones. After 20 RDAs, an external audit is mandatory before the board can authorize more. This ensures robust internal controls and compliance with FATF guidelines for cross-border remittances.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Obtain prior RBI approval for the first RDA with any non-resident Exchange House using Annex-I form.
Conduct due diligence on Exchange Houses' financial standing before opening accounts.
Once total RDAs reach 20, the bank may arrange an external audit of internal systems; based on satisfactory report, board may authorize more arrangements; file board note and resolution with RBI.
Comply with FATF compliance requirements: for Gulf, Hong Kong, Singapore, Malaysia (only under Speed Remittance Procedure), and for all other FATF-compliant countries (only under Speed Remittance Procedure).
Submit periodic statements (Annex II-VI) as specified in the circular.

Who it affects

AD Category-I banks, Non-resident Exchange Houses from Gulf countries, Hong Kong, Singapore, Malaysia (only under Speed Remittance Procedure), and all other FATF-compliant countries (only under Speed Remittance Procedure), RBI's Foreign Exchange Department

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-18 19:47 IST
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the sunset clause in this Master Circular?

The circular will stand withdrawn on July 1, 2013, and be replaced by an updated Master Circular on the same subject.

When is an external audit required for RDAs?

Once the total number of Rupee Drawing Arrangements reaches 20, the AD Category-I bank must cause a detailed external audit of their internal system to ensure satisfactory working.

Which countries' Exchange Houses are covered under this circular?

Exchange Houses from Gulf countries, Hong Kong, Singapore, Malaysia (only under Speed Remittance Procedure), and all other FATF-compliant countries (only under Speed Remittance Procedure).

📜 Read the original circular — full text as issued by RBI

RBI/2012-13/3
 Master Circular No. 3/2012-13
 (Updated as on April 09, 2013)
 July 02, 2012
 To,
 All Authorised Dealer Category-I Banks
 Madam / Sir,
 Master Circular on Memorandum of Instructions for Opening and
 Maintenance of Rupee/ Foreign Currency Vostro Accounts of
 Non-resident Exchange Houses
 This Master Circular consolidates the existing instructions on the subject of “Memorandum of Instructions for Opening and Maintenance of Rupee/ Foreign Currency Vostro Accounts of Non-resident Exchange Houses” at one place. The list of underlying circulars/ notifications is set out in the Appendix .
 2. This Master Circular is issued with a sunset clause. This circular will stand withdrawn on July 01, 2013 and be replaced by an updated Master Circular on the subject.
 Yours faithfully,
 (Rudra Narayan Kar)
 Chief General Manager
 INDEX

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/3 · issued 09 Apr 2013. The plain-English explanation above is BankPulse’s own independent summary.

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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=7310&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.