Guidelines on Money Changing Activities (Updated as on April 02, 2026)

Reserve Bank of India (RBI) has updated the guidelines on money changing activities.

Who is Authorised Person?

Authorised Person means an authorised dealer, money changer, off-shore banking unit or any other person authorised under section 10(1) of Foreign Exchange Management Act, 1999 (FEMA) to deal in foreign exchange or foreign securities.

What are the categories of Authorised Persons?

• Authorised Dealer (AD) Category-I – entities which are authorised by RBI to carry out all permissible current and capital account transactions.
• Authorised Dealer (AD) Category-II – entities which are authorised by RBI to carry out specified non-trade related current account transactions, all the activities permitted to Full Fledged Money Changers (FFMC) and any other activity as decided by RBI, and include (i) Upgraded FFMCs; (ii) Select Regional Rural Banks (RRBs); (iii) Select Urban Cooperative Banks (UCBs); and (iv) Other entities.
• Authorised Dealer (AD) Category-III – entities which are authorised by RBI to carry out specific foreign exchange transactions incidental to their business / activities.
• Full Fledged Money Changer (FFMC) – a money changer authorised to purchase foreign exchange from non-residents visiting India and residents, and to sell foreign exchange for private and business travel purposes only.

What are the requirements for issuance / renewal of FFMC license?

• The applicant shall be a company registered under the Companies Act, 1956 / Companies Act, 2013 / Registration of Companies (Sikkim) Act, 1961.
• The minimum Net Owned Funds (NOF) required for FFMC is –
• Single branch FFMC – ₹25 lakh
• Multiple branch FFMC – ₹50 lakh
• FFMC should commence its operations within 6 months from the date of issuance of licence.
• UCBs, fulfilling the eligibility norms, would be considered for authorisation as Authorised Dealer Category-I / Authorised Dealer Category-II only.
• An application from an FFMC / non-bank AD Category-II for renewal of licence shall be made 2 months before expiry of the licence. No application from an FFMC / non-bank AD Category-II for renewal of licence shall be made after expiry of the licence. 
• FFMC / non-bank AD Category II shall not carry on money changing business at any additional place of business other than its permanent place of business except with the prior approval of RBI.
• FFMC / non-bank AD Category II should commence operations of its additional branch within 6 months from the date of issuance of licence.

What are the guidelines for appointment of agents / franchisee?

• RBI permits ADs Category - I, ADs Category - II and FFMCs to enter into agency or franchisee agreements at their option for the purpose of carrying restricted money changing business i.e. conversion of foreign currency notes, coins or travellers' cheques into Indian Rupees (INR). 
• A franchisee can be any entity which has a place of business and a minimum NOF of ₹10 lakh. 
• Franchisees can undertake only restricted money changing business.
• Franchisees of AD Category - I / AD Category - II / FFMCs functioning within 10 kms from the borders of Pakistan and Bangladesh may also sell the currency of the bordering country, with the prior approval of RBI. 
• Other franchisees of AD Category - I / AD Category - II / FFMCs cannot sell foreign currency.
• The foreign currency purchased by the franchisee should be surrendered only to its franchiser within 7 working days from the date of purchase.
• The franchiser, i.e. AD Category–I Bank / AD Category–II / FFMC may appoint franchisees within a distance of 100 kms from their controlling branches concerned.
• This distance criterion is relaxed in case of a recognised group / chain of hotels appointed as franchisees, provided the headquarters of the group / chain of hotels falls within a distance of 100 kms of the controlling branch of the franchiser concerned.
• In case of areas declared as hilly areas (as defined by the respective State Governments / Union Territories) and the North-Eastern States, the distance restriction is not applicable.

What are the limits for carrying Indian notes outside the country?

• Resident Indians as well as those Non-residents who are – (i) not citizens of Pakistan or Bangladesh and (ii) not going to Pakistan or Bangladesh, are allowed to take Indian notes up to ₹25,000/- while leaving the country through an airport.
• Citizens of Pakistan and Bangladesh exiting the country by air are allowed to carry up to ₹10,000/- up to the boarding point in international airports, but not beyond.

What are the limits for bringing in and taking out of foreign exchange?

• Foreign exchange in any form can be brought into India freely without limit provided it is declared on the Currency Declaration Form (CDF) on arrival to the Custom Authorities. 
• When foreign exchange brought in the form of currency notes or travellers' cheques does not exceed USD 10,000 or its equivalent and / or the value of foreign currency notes does not exceed USD 5,000 or its equivalent, declaration thereof on CDF is not insisted upon.
• Taking out foreign exchange in any form, other than foreign exchange obtained from an authorised dealer or a money changer is prohibited unless it is covered by a general or special permission of RBI. 
• Non-residents, however, have general permission to take out an amount not exceeding the amount originally brought in by them, subject to compliance with the provisions regarding declaration on CDF.

What are the limits for purchases of foreign currency from public?

• Authorised Persons and their franchisees may freely purchase foreign currency notes, coins and travellers cheques from residents as well as non-residents. 
• Requests for payment in cash in INR to resident customers towards purchase of foreign currency notes and / or travellers’ cheques from them may be acceded to the extent of only USD 1,000 or its equivalent per transaction.
• Requests for payment in cash by foreign visitors / Non-Resident Indians may be acceded to the extent of only USD 3,000 or its equivalent per transaction.
• Authorised Persons may sell INR to foreign tourists / visitors against International Credit Cards / International Debit Cards.
• Authorised Persons may issue certificate of encashment, when asked for, in cases of purchases of foreign currency notes, coins and travellers cheques from residents as well as non-residents. 

What are the limits for sale of foreign exchange?

• Authorised Persons may accept payment in cash below ₹50,000/- against sale of foreign exchange for travel abroad (for private visit or for any other purpose).
• Authorised Persons may convert into foreign currency, unspent Indian currency held by non-residents at the time of their departure from India, provided a valid Encashment Certificate is produced.
• Authorised Persons may convert at their discretion, unspent Indian currency up to ₹10,000 in the possession of non-residents if, for bonafide reasons, the person is unable to produce an Encashment Certificate after ensuring that the departure is scheduled to take place within the following 7 days.
• ADs Category – I, ADs Category – II and FFMCs may provide facility for reconversion of INR to the extent of ₹50,000/- to foreign tourists (not NRIs) against ATM Receipts based on the following documents – (i) Valid Passport and VISA (ii) Ticket confirmed for departure within 7 days (iii) Original ATM slip (to be verified with the original debit / credit card).
• Authorised Persons shall issue a cash memo, if asked for, to travellers to whom foreign currency is sold by them. The cash memo may be required for production to emigration authorities while leaving the country.

What are the guidelines on maintaining foreign currency balances by FFMCs?

• FFMCs / non-bank ADs Category II may obtain their normal business requirements of foreign currency notes from other FFMCs and Authorised Dealers (ADs) in India, against payment in rupees.
• From July 1, 2024, value of foreign currency notes sold by FFMCs / non-bank ADs Category-II to the public for permitted purposes should not be less than 75% of the value of foreign currency notes purchased from other FFMCs / ADs, on a quarterly basis.
• Where FFMCs / non-bank ADs Category II are unable to replenish their stock in this manner, they may make an application to RBI through an AD Category-I for permission to import foreign currency into India. 
• FFMCs / non-bank ADs Category II may export surplus foreign currency notes / encashed travellers' cheques to an overseas bank through designated Authorised Dealer Category - I in foreign exchange for realisation of their value. 
• FFMCs may also export surplus foreign currency to private money changers abroad subject to the condition that either the realisable value is credited in advance to the AD Category – I bank’s nostro account or a guarantee is issued by an international bank of repute covering the full value of the foreign currency notes / coins to be exported.
• In the event of foreign currency notes purchased being found fake / forged subsequently, FFMCs / non-bank ADs Category II may write- off up to USD 2000 per financial year. 
• Any write-off in excess of the above amount, for any reason including but not limited to foreign currency notes being found to be fake / forged would require the approval of RBI.

What are other guidelines?

• FFMCs / non-bank ADs Category II, with the approval of RBI, may be allowed to open Foreign Currency Accounts in India, subject to the following conditions –
• Only one account per currency may be permitted at a particular centre.
• Only the value of foreign currency notes / encashed TCs exported through the specific bank and realised can be credited to the account.
• Balances in the accounts shall be utilised only for settlement of liabilities on account of – (i) TCs sold by the FFMCs / non-bank ADs Category II and (ii) Foreign currency notes acquired by the FFMCs / non-bank ADs Category II from ADs Category-I.
• No idle balance shall be maintained in the said account.
• Authorised Dealers Category-II may open Nostro Accounts after getting one time approval from RBI, subject to following terms and conditions –
• Only one Nostro account for each currency may be opened.
• Balances in the account should be utilised only for the settlement of remittances sent for permissible purposes and not for the settlement in respect of forex prepaid cards.
• No idle balance shall be maintained in the said account.
• FFMCs and ADs Category-II [which are not Regional Rural Banks (RRBs), Local Area Banks (LABs), Urban Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs)], having a minimum net worth of ₹5 crore, may participate in the designated currency futures and currency options on exchanges recognised by the Securities and Exchange Board of India (SEBI) as clients only for the purpose of hedging their underlying foreign exchange exposures.
• The upper limit for movement of cash during elections in INR would be ₹10,00,000/- and in Foreign Currency equivalent of USD 1,00,000 except the transactions where the imported foreign currency is being transported to the offices / branch of the Authorised Person.
• Foreign Exchange Counters / branches at the international airports in India may be established subject to the following conditions – 
• In the arrival halls – (a) After the Customs Desk (Green Channel / Red Channel). (b) Between the Immigration Desk and the Customs Desk subject to the condition that these counters shall only purchase foreign currency and sell INR and "Encashment Certificates" shall invariable be issued by the money changers to the customers.
• In the departure halls – (a) Before the Customs Desk or the immigration Desk, whichever comes first. (b) Counters in Duty-Free Area or Security Hold Area beyond the Immigration or Customs Desk shall allow residents (along with non-residents) to exchange INR. (Updated as on April 02, 2026)

References

Reserve Bank of India. (2016, January 01). 'Master Direction - Money Changing Activities (Updated as on May 29, 2024)'. Retrieved from https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11518

Reserve Bank of India. (2024, May 27). 'Instructions on Money Changing Activities'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12689&Mode=0

Reserve Bank of India. (2026, April 02). 'Memorandum of Instructions governing money changing activities – Location of Forex Counters in International Airports in India'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13364&Mode=0

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