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AD Category-II entities can now allow online Form A2 submission

Current · Source: Reserve Bank of India · RBI/2023-24/16 · issued 12 Apr 2023 · ~2 min read
Quick answerRBI now permits AD Category-II entities to allow online submission of Form A2, extending a facility previously available only to AD Category-I banks. Entities must frame board-approved guidelines and comply with existing FEMA and KYC norms.
The rule, in the simplest words
How it plays out — a real example

As a money changer in Mumbai, Rohan can now allow his customers to submit Form A2 online, making it more convenient for them. However, he must ensure that his online process is compliant with FEMA and KYC norms, and that his staff is trained to handle the new facility. Rohan also needs to communicate the new facility to his customers and review his internet banking platform to ensure it meets the regulatory requirements.

What changed

Earlier, only AD Category-I banks with internet banking could let customers submit Form A2 online. Now, AD Category-II entities have also been allowed to offer this facility, subject to framing their own board-approved guidelines within the regulatory framework.

What it means for you

This expands digital convenience for customers of AD Category-II entities, such as money changers and other authorized forex dealers. Banks and lenders must ensure that their online Form A2 processes remain compliant with FEMA, KYC Master Direction, and the terms of the 2016 circular. It also signals RBI's continued push for digitization in forex reporting.

What you must do

Who it affects

AD Category-II entities (e.g., money changers, forex dealers), AD Category-I banks (reminder of existing obligations), Customers using AD Category-II services for forex remittances

❓ Common questions

Regulatory timeline

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

What is Form A2 used for?

Form A2 is used for reporting foreign exchange remittances by individuals and entities under FEMA. It captures details of the remitter, beneficiary, purpose, and amount.

Do AD Category-I banks need to do anything new?

No, the circular primarily extends the online submission facility to AD Category-II entities. AD Category-I banks must continue to comply with the existing terms from the 2016 circular.

What guidelines must AD Category-II entities follow for online Form A2?

They must frame their own guidelines with board approval, within the existing statutory and regulatory framework, and comply with FEMA 1999 and the KYC Master Direction 2016.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Partially modified by RBI removes limits on online Form A2 remittances
RBI’s words: “and A.P. (DIR Series) Circular No. 02 dated April 12, 2023”
📜 Read the original circular — full text as issued by RBI
RBI/2023-24/16 A.P. (DIR Series) Circular No. 02 April 12, 2023 To All Authorised Dealers in Foreign Exchange Madam / Sir Authorised Dealers Category-II - Online submission of Form A2 Attention of Authorised Dealer (AD) Category-I banks and AD Category-II entities is invited to paragraph 4 of A.P. (DIR Series) Circular No. 50 dated February 11, 2016 on ‘Compilation of R-Returns: Reporting under FETERS’ in terms of which AD banks, offering internet banking facilities to their customers were permitted to allow online submission of Form A2. 2. It has now been decided to permit AD Category-II entities also to allow online submission of Form A2. AD Category-II entities shall frame appropriate guidelines with the approval of their Board within the ambit of extant statutory and regulatory framwework. 3. The terms and conditions mentioned in aforesaid A.P. (Dir Series) circular No. 50 dated February 11, 2016 shall continue to apply, as hitherto, to all Authroised Dealers. The relevant provisions of FEMA 1999, and ‘ Master Direction – Know Your Customer (KYC) Direction, 2016 ’ as updated from time to time, issued by the Department of Regulation, RBI, have to be complied with by the ADs, for all transactions. 4. Authorised Dealers may bring the contents of this circular to the notice of their constituents. 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 (Vivek Srivastava) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2023-24/16 · issued 12 Apr 2023. 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 Compliance officer at a bank this circular applies to (AD Category-II entities (e.g., money changers, forex dealers), AD Category-I banks (reminder of existing obligations), Customers using AD Category-II services for forex remittances), your first concrete step on “AD Category-II entities can now allow online Form A2 submission” is: “Update internal policies to allow online Form A2 submission if you are an AD Category-II entity, with board approval.” (RBI issued this 12 Apr 2023).

  1. Circular: RBI/2023-24/16 -- AD Category-II entities can now allow online Form A2 submission
  2. Issued: 12 Apr 2023
  3. Action required: Update internal policies to allow online Form A2 submission if you are an AD Category-II entity, with board approval.
  4. Action required: Ensure compliance with FEMA 1999, KYC Master Direction 2016, and the terms of A.P. (DIR Series) Circular No. 50 dated February 11, 2016.
  5. Action required: Communicate the new facility to customers and train staff on the updated process.
  6. Action required: Review and align your internet banking or digital platform with the regulatory requirements for online Form A2.
  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=12489&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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