What changed
This Master Circular consolidates all existing MTSS guidelines into a single reference document, replacing earlier circulars. It includes updated KYC/AML/CFT guidelines and a sunset clause, expiring on July 1, 2014, after which a new circular will be issued.
What it means for you
Banks and authorised persons must ensure only inward personal remittances (e.g., family maintenance, tourist funds) are processed under MTSS, with no outward flows. The circular reinforces strict KYC/AML compliance and periodic reporting, impacting operational processes for Indian Agents and sub-agents.
What you must do
- Review and align MTSS operations with the consolidated guidelines, especially KYC/AML/CFT norms.
- Ensure no outward remittances are processed under MTSS; only inward personal remittances are allowed.
- Submit quarterly statements on remittance volumes and collateral details as per Annex III and IV.
- Verify that all Indian Agents are RBI-authorised and meet entry norms (AD-I, AD-II, or FFMC).
- Prepare for the sunset clause by planning for the updated circular due July 1, 2014.
Who it affects
Authorised Dealer Category-I banks, Authorised Dealer Category-II entities, Full Fledged Money Changers (FFMCs), Indian Agents under MTSS, Overseas Principals, Sub-agents of Indian Agents
What types of remittances are allowed under MTSS?
Only inward personal remittances, such as family maintenance and funds for foreign tourists visiting India. Outward remittances from India are strictly prohibited.
Who can become an Indian Agent under MTSS?
Only Authorised Dealer Category-I banks, Authorised Dealer Category-II entities, or Full Fledged Money Changers (FFMCs) as defined in the circular can apply for permission.
What is the sunset clause in this circular?
The circular has a sunset clause of one year, meaning it will stand withdrawn on July 1, 2014, and be replaced by an updated Master Circular on MTSS.