What changed
Earlier, remittances up to USD 25,000 could be processed with just a simple letter and no Form A2. Now, RBI has withdrawn those circulars and made Form A2 mandatory for all cross-border remittances, irrespective of value. The earlier exemption for small-value transactions is gone.
What it means for you
Banks must now collect Form A2 for every outward remittance, adding a documentation step even for small amounts. This increases operational burden but ensures uniform compliance and better audit trails. Lenders should update their systems and train staff to handle the new requirement seamlessly.
What you must do
- Update internal remittance processing systems to require Form A2 for all transactions, regardless of amount.
- Train branch and forex staff on the new mandatory Form A2 requirement and withdrawal of earlier circulars.
- Communicate the change to customers to avoid confusion at the counter.
- Ensure digital Form A2 options are available for customer convenience.
Who it affects
All authorised dealers in foreign exchange, Bank branches handling cross-border remittances, Customers making outward remittances
What was the earlier limit for Form A2 exemption?
Earlier, remittances up to USD 25,000 could be processed with a simple letter without Form A2. That exemption is now withdrawn.
Does this apply to digital remittances?
Yes, Form A2 can be obtained in physical or digital form for all cross-border remittances, irrespective of value.
What happens if we don't collect Form A2?
Non-compliance may lead to regulatory action under FEMA. Banks must ensure Form A2 is obtained for every remittance.