Master Direction - Money Changing Activities (Updated as on June 24, 2026)
UR
- Applies toAll regulated entities
- StatusIn force
- RBI text changedRBI updated this document on September 29, 2026. BankPulse is re-reading it. BankPulse checked all 37 points on this page against RBI's new text on 11 October 2026. Every quoted line is still in RBI's text.
- IssuedJan 04, 2016
- Amendmentsnone tracked
- Length37 points in 3 sections · 4 min read
The four dates on this rule
- PublishedJan 04, 2016The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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33 of the 37 points name no product and bind every product. All products.
Numbers to remember
| two years | No new franchisee deals from now on; existing ones must end within two years of 6 May 2026. RBI Section III Para 1 |
| Rs.10 lakh | A franchisee must be an entity with a place of business and at least Rs.10 lakh of its own funds. RBI Section III Para 2 |
| 7 working days | A franchisee must hand over foreign currency it buys to its franchiser within 7 working days. RBI Section III Para 3 |
| Rs.50,000 | Foreign exchange for travel may be sold for cash only below Rs.50,000; above that it must be non-cash. RBI Section V Para 5 |
| Rs.10,000 | Up to Rs.10,000 may be reconverted for a non-resident without an encashment certificate, if departing within seven days. RBI Section V Para 6 |
| Rs.5 crore | An FFMC or AD Category-II needs at least Rs.5 crore net worth to trade currency futures for hedging. RBI Section V Para 23 |
| Rs.25,000 | Most residents and non-residents may carry at most Rs.25,000 in Indian notes out of the country by air. RBI Section V Para 24 |
| Rs.10,00,000 | During elections, cash movement is capped at Rs.10,00,000 in rupees or USD 1,00,000 in foreign currency. RBI Annex Para F |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Can be read two ways
A point marked this way sits on an RBI paragraph that can honestly be read two ways. Our own sentence takes one of the two. BankPulse does not choose for you: read RBI’s own paragraph, at the number printed on the point, before you act on it.
Two ways — both, or either one. RBI’s paragraph joins two things in the and-or form. One reading: Both of them apply, together. The other: Either one of them, on its own, is enough.
Must know
1. Licence required to trade forex
Anyone who buys or sells foreign currency without RBI's licence can be penalised by law.
2. Franchisee model being phased out
No new franchisee deals from now on; existing ones must end within two years of 6 May 2026.
3. Franchisee needs Rs.10 lakh
A franchisee must be an entity with a place of business and at least Rs.10 lakh of its own funds.
4. Currency returns within 7 days
A franchisee must hand over foreign currency it buys to its franchiser within 7 working days.
5. Auditor confirms the Rs.10 lakh
A Chartered Accountant must certify the franchisee still holds its Rs.10 lakh, on an ongoing basis.
6. Franchisees within 100 km
A franchiser may normally only appoint franchisees within 100 km of its own controlling branch.
7. Franchisees must follow AML/KYC/CFT
A franchisee must follow the same anti-money-laundering and KYC rules as its franchiser.
8. USD 10,000 needs no declaration
A traveller need not declare foreign currency notes up to USD 10,000, or notes alone up to USD 5,000.
9. Cash payout is capped
A resident selling foreign currency notes or cheques may be paid at most USD 1,000 in cash per transaction.
10. Visitor cash payout also capped
A foreign visitor or NRI selling foreign currency may be paid at most USD 3,000 in cash per transaction.
11. No certificate, no reconversion
A non-resident can only convert unspent Indian currency back to foreign currency by producing a valid encashment certificate.
12. Prepaid cards settle via AD-I
Money changers may issue forex prepaid cards, but settlement must go through an AD Category-I bank.
13. Cash forex sale is capped
Foreign exchange for travel may be sold for cash only below Rs.50,000; above that it must be non-cash.
14. Rs.10,000 reconversion without proof
Up to Rs.10,000 may be reconverted for a non-resident without an encashment certificate, if departing within seven days.
15. ATM reconversion up to Rs.50,000
A foreign tourist may reconvert up to Rs.50,000 against ATM withdrawal slips and a confirmed departure ticket.
16. Licence must be on display
Every FFMC or non-bank AD Category-II must display its own RBI money-changing licence at the counter.
17. No cash settlement allowed
Settlement between authorised dealers and FFMCs must never be made in cash.
18. Must resell 75% of purchases
An FFMC must sell the public at least 75% of the foreign currency it buys from other FFMCs, each quarter.
19. Fake notes need top-management approval
Foreign currency notes later found fake can only be written off after top management's own approval.
20. Monthly audit above USD 100,000
A single-branch FFMC trading over USD 100,000 a month must run a monthly concurrent audit, not just quarterly.
21. Multi-branch audit split 80/20
A multi-branch FFMC's concurrent audit must cover 80% of transaction value monthly and the rest quarterly.
22. Net worth certificate deadline
The auditor's certificate confirming an FFMC's net worth is due to RBI every year by 31st October.
23. Turnover certificate deadline
The auditor's certificate on annual forex turnover is due to RBI every year by 30th April.
24. Rs.5 crore for currency futures
An FFMC or AD Category-II needs at least Rs.5 crore net worth to trade currency futures for hedging.
25. Departure counters sit before Customs
An airport's departure-hall forex counter must sit before the Customs desk or immigration, whichever comes first.
26. Rs.25,000 cash-out limit at airports
Most residents and non-residents may carry at most Rs.25,000 in Indian notes out of the country by air.
27. Pakistan/Bangladesh cap is Rs.10,000
Citizens of Pakistan or Bangladesh may carry at most Rs.10,000 in Indian notes to the boarding point.
28. Non-bank APs follow NBFC KYC
A money changer not regulated by RBI's own Department of Regulation must follow the NBFC KYC Directions instead.
29. Franchisees bound by same rules
An authorised person must make sure its own agents and franchisees also follow its KYC/AML/CFT directions.
30. Election rupees banked same day
Cash an authorised person collects during elections must reach a bank branch that same day or the next.
31. Election cash has a ceiling
During elections, cash movement is capped at Rs.10,00,000 in rupees or USD 1,00,000 in foreign currency.
Do it
1. Onsite check once a year
The franchiser must inspect each franchisee's own site at least once a year.
2. Due diligence checks are yearly
The franchiser's own background checks on a franchisee must be repeated at least once a year.
3. Spot audits every six months
The franchiser must run a surprise spot audit of every franchisee site at least once every six months.
4. Rate chart updated each morning
The day's exchange-rate chart at the counter must be updated by 10:30 in the morning.
5. Audit watches for structured cash
The concurrent audit must check that no customer splits cash deals to stay under the INR 50,000 limit.
6. Election cash needs paperwork
During elections, cash movement must be carried by an authorised person with documents proving it, on request.