The Hindu Business Line : Money changers may get licence for more forex transactions

AN internal group of Reserve Bank of India has recommended the granting of licences to certain entities called Restricted Authorised Dealers (RAD category-II) to undertake more transactions in foreign exchange, which are not trade-related.

This is being done with a view to providing enhanced access to the general public and offer better customer service.

Currently, there are 87 authorised dealers (who undertake all permissible forex transactions whether relating to trade or capital transactions), of whom 84 are commercial banks. There are 879 full-fledged moneychangers, who sell or purchase foreign exchange for private or business visits abroad. Representations have been received from moneychangers asking for expanding the scope of their activities.

The group has recommended that RBI permit some of these entities that fulfil certain criteria to release foreign exchange for transactions such as private visits abroad, remittance to travel agents, hotels, tour operators, business travel, participation in competitions, events, for medical treatment, for education, film shooting and other purposes.

The group has recommended that urban co-operative banks that have sound financials and good governance standards may be licensed to act as restricted authorised dealers on a case-by-case basis. The group has suggested upgrading of existing moneychangers as authorisd dealers provided they have sound financials and provide "regulatory comfort" that they are a fit and proper entity.

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