Foreign Exchange Management (Authorised Persons) Regulations, 2026

This regulation (Foreign Exchange Management (Authorised Persons) Regulations, 2026) updates the framework for authorisation, eligibility and ongoing conditions for entities that wish to operate as authorised persons in foreign exchange (ADs, FFMCs, FXCs). It replaces or supplements earlier rules and comes into effect from its publication date in the Gazette.

What this document covers

The Regulations define terms, set the categories of authorised persons, prescribe eligibility and minimum financial requirements, explain the application and scrutiny process, specify permitted activities for each category, and list ongoing conditions, reporting requirements and grounds for refusal, suspension or cancellation.

Key definitions and categories

• AD category I, II, III – three tiers of authorised dealers with different permissions and entry criteria.
• FFMC (Full-Fledged Money Changer) – authorised to buy/sell currency notes/TCs and act as MTSS agents as specified.
• FXC (Foreign Exchange Customer Service Agent) – agents authorised under Reserve Bank schemes.

Main requirements and thresholds

• Applications must be submitted through PRAVAAH (https://pravaah.rbi.org.in) to the relevant RBI regional office.
• Applicant must be a company registered under Companies Act, 2013 and have appropriate object clauses in the memorandum of association.
• Minimum net worth at start of operations (audited or certified by statutory auditors):
  • AD Category II: ₹10 crore
  • AD Category III: ₹2 crore
  • FFMC (single outlet): ₹25 lakh; multiple outlets: ₹50 lakh
• Minimum average annual foreign exchange turnover requirement to qualify for AD Category II as an FFMC/FXC: ₹50 crore over the preceding two financial years for entities operating in at least two locations.
• Fit and proper criteria for promoters, directors and KMPs: experience in financial services, integrity and character. At least 50% of directors and KMPs should have relevant industry experience.

Application scrutiny, conditionality and timelines

• RBI will assess applications based on eligibility, documents and information including inputs from supervisory/regulatory departments.
• RBI may request additional information or documents; applicants must respond within specified time (typically 30 days from enactment deadline where applicable) or application will be rejected.
• If an applicant or its promoter/Persons are under investigation by Department of Enforcement (DoE), an AOC from DoE dated no earlier than 30 days prior to the application must be submitted; if DoE does not respond within 60 days, RBI may proceed based on applicant’s declaration.

Permitted activities by category (practical points for money changers)

• FFMC: purchase and sale of foreign currency notes and traveller's cheques; purchase of currency notes/TCs for bona fide travel purposes; act as MTSS agent under MTSS rules.
• AD II: permitted specified current and capital account transactions as listed; non-commercial current account facilities (excluding gifts/donations) and specified trade-related limits (domestic rules apply).
• AD III: permissions as notified by RBI for that category.

Operational and compliance obligations

• Maintain the minimum annual/ongoing forex turnover requirement (AD II: ₹50 crore; FFMC: ₹10 crore). If net worth falls below prescribed minimums, restore to required level within six months or RBI may cancel licence.
• Begin operations within six months of grant of authorisation and notify RBI regional office; seek prior RBI approval for any change in management/control above 50% stake.
• Report opening/closing of business locations or counters and transfer of registered office to RBI via APConnect within seven calendar days.
• Comply with Section 10(5) of FEMA while dealing in foreign exchange (i.e., restrictions on dealing with unauthorised persons and due compliance with delegation rules).

Enforcement, refusals and transitional provisions

• RBI may refuse, cancel or impose conditions on the authorisation for reasons including non-compliance, misrepresentation, lack of fit and proper status, or public interest concerns.
• Existing authorised persons may apply for re-authorisation under the new regulations before expiry; transitional minimum net worth requirements for existing entities are specified (single FFMC ₹25 lakh; multi-outlet ₹50 lakh; AD II ₹10 crore; AD III ₹2 crore).

Action points for money changers

1. Check your category and ensure MoA allows forex activities; verify minimum net worth and turnover thresholds and obtain statutory auditor certification.
2. Submit or regularise applications via PRAVAAH; keep DoE AOC ready if under any probe.
3. Notify RBI via APConnect for opening/closing counters, and inform RBI of managerial/control changes before implementation.
4. Maintain ongoing compliance: turnover, net worth, fit-and-proper standards, and be ready to submit requested information within RBI timelines.

Keep this Regulation handy and align internal compliance, reporting and capital plans. For application forms and portal guidance, use PRAVAAH and APConnect as stated by RBI.