Foreign Exchange Management (Authorised Persons) Regulations, 2026

Reserve Bank of India, vide Notification No. FEMA 401/2026-RB dated April 30, 2026, has announced an important update regarding the Foreign Exchange Management (Authorised Persons) Regulations, 2026.

Key Details of the Update –
• The regulations are issued under Section 47(2)(h) read with Section 10 of the Foreign Exchange Management Act, 1999.

• Applicability: Persons authorised or seeking authorisation as Authorised Dealers, Full Fledged Money Changers, and Forex Correspondents under FEMA.

• Effective Date: The regulations shall come into force from the date of their publication in the Official Gazette.

• No person shall act as an authorised person without obtaining authorisation from the Reserve Bank of India.

• Existing authorised persons may continue to operate until expiry of their existing authorisation, subject to existing conditions, these regulations, and RBI directions.

• Applications for fresh authorisation shall be made through the PRAVAAH portal to the concerned RBI Regional Office.

• Fresh authorisations shall be considered under AD Category I, AD Category II, and AD Category III.

• Fresh applications for authorisation as Full Fledged Money Changer shall not be considered, except those already under process as on the date of commencement of these regulations.

• Eligibility requires the applicant to be a company incorporated under the Companies Act, 2013, with foreign exchange related activity included in its Memorandum of Association.

• Minimum net worth prescribed is ₹10 crore for AD Category II and ₹2 crore for AD Category III at commencement of business.

• Existing authorised persons may apply for renewal subject to minimum net worth of ₹25 lakh for single branch FFMC, ₹50 lakh for multiple branch FFMC, ₹10 crore for AD Category II, and ₹2 crore for AD Category III.

• AD Category I may facilitate any current account and capital account transaction permissible under FEMA.

• AD Category II may facilitate non trade current account transactions, excluding gift and donation, and foreign trade transactions up to ₹25 lakh per transaction.

• AD Category III may undertake activities as specified in the authorisation issued by RBI.

• FFMCs may purchase foreign currency notes and travellers’ cheques, sell foreign currency notes and travellers’ cheques for foreign travel, and function as agents under MTSS.

• Authorisation shall be valid until revoked or surrendered, while authorisation granted to a bank or NBFC shall be co terminus with its banking licence or certificate of registration.

• Minimum annual forex turnover prescribed is ₹50 crore for AD Category II and ₹10 crore for FFMC, to be achieved within two years and maintained thereafter.

• Authorised persons must maintain minimum net worth, turnover, and fit and proper status on an ongoing basis.

• Net worth falling below the prescribed minimum must be restored within six months, failing which authorisation may be revoked.

• Authorised persons, other than banks, must obtain prior RBI approval for change in management, control, or ownership exceeding 50%.

• Authorised persons may conduct permitted activities from any place of business, subject to reporting requirements through APConnect.

• AD Category I and AD Category II entities may appoint Forex Correspondents for money changing business under a principal agent model.

• Forex Correspondents may purchase and sell foreign currency notes, coins, and travellers’ cheques for permitted purposes and function as MTSS sub agents.

• Authorised persons shall not enter into fresh franchisee arrangements.

• Existing franchisee arrangements valid as on commencement of these regulations shall be discontinued within two years.

• Penalty/Consequence: RBI may revoke authorisation if it is in public interest or if the authorised person fails to comply with conditions, FEMA provisions, rules, regulations, notifications, directions, or orders.

Actions if Any –
• Applicants seeking authorisation must apply through the PRAVAAH portal to the concerned RBI Regional Office.

• Applicants must submit additional information or documents sought by RBI within the specified time.

• Fresh FFMC applications already under process must submit additional information or documents within thirty days from commencement of these regulations, where sought by RBI.

• Existing authorised persons must apply for renewal at least two months before expiry of existing authorisation.

• Authorised persons, other than banks, must commence operations within six months from issuance of authorisation and intimate the concerned RBI Regional Office.

• Authorised persons, other than banks, must seek prior RBI approval before change in management, control, or ownership exceeding 50%.

• Authorised persons, other than banks, must report change of director or KMP and events affecting fit and proper status within thirty days from the end of the financial year.

• Authorised persons, other than banks, must report DoE investigation details within thirty days of becoming aware of the investigation.

• Authorised persons, other than banks, must report opening of new place of business, closure of place of business, and shifting of registered office through APConnect within seven calendar days.

• Principals appointing Forex Correspondents must formulate a Board approved internal policy for engaging Forex Correspondents.

• Principals must submit details of Forex Correspondents and their places of business through APConnect within fifteen days from the end of each calendar quarter.

• Authorised persons must discontinue existing franchisee arrangements within the prescribed timeline.

Compliance Deadline –
Fresh FFMC applications under process must submit additional information within thirty days from commencement where sought by RBI; renewal applications must be filed at least two months before expiry; operations must commence within six months from authorisation; net worth shortfall must be restored within six months; annual forex turnover must be achieved within two years; business place changes must be reported within seven calendar days; director, KMP, fit and proper, and DoE investigation related reporting must be completed within thirty days; Forex Correspondent details must be submitted within fifteen days from the end of each calendar quarter; appeals must be filed within forty five calendar days; existing franchisee arrangements must be discontinued within two years from commencement.