What changed
Previously, Rupee Drawing Arrangements (RDAs) via Exchange Houses were limited to Gulf countries, Hong Kong, Singapore, and Malaysia (Speed Remittance only). Now, RDAs under Speed Remittance Procedure are extended to Exchange Houses in all FATF-compliant jurisdictions. Additionally, items 7 and 8 of the permitted transactions list now allow payments to medical institutions and hotels by nationals of all FATF-compliant countries, not just earlier specified regions.
What it means for you
Banks can now process cross-border inward remittances through Exchange Houses in any FATF-compliant country, broadening the remittance corridor. This reduces operational restrictions and may increase remittance inflows from new geographies. However, banks must ensure due diligence on FATF compliance of the Exchange House's jurisdiction.
What you must do
- Update internal policies to include Exchange Houses in all FATF-compliant countries under Speed Remittance Procedure.
- Verify FATF compliance status of any new jurisdiction before onboarding Exchange Houses.
- Train staff on revised permitted transactions for payments to medical institutions and hotels by nationals of FATF-compliant countries.
- Review and amend existing agreements with Exchange Houses to reflect expanded scope.
Who it affects
AD Category-I banks handling Rupee Drawing Arrangements, Exchange Houses in FATF-compliant countries, NRIs and nationals of FATF-compliant countries sending remittances to India
Which countries are now eligible for Rupee Drawing Arrangements under this circular?
All countries that are FATF-compliant are now eligible, but only under the Speed Remittance Procedure. Previously, only Gulf countries, Hong Kong, Singapore, and Malaysia were covered.
What specific transactions are now permitted for nationals of FATF-compliant countries?
Payments to medical institutions and hospitals for medical treatment, and payments to hotels for stay, are now permitted for nationals of all FATF-compliant countries, in addition to NRIs.
Does this circular change any other instructions from the 2008 circular?
No, all other instructions from the February 6, 2008 circular remain unchanged. Only items 7 and 8 under Part (B) of Annex-I have been modified as described.