TaxTMI 
TaxTMI 
Authorised Persons- Categorisation
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....to authorised dealers (banks authorised to deal in foreign exchange) and Full Fledged Money Changers. Licences are also granted to financial and other institutions to carry out specific foreign exchange transactions related to their business / activities. 3. With the progressive liberalisation in foreign exchange related transactions, a large segment of the population can now undertake a variety of current account transactions on their individual accounts, without approaching the Reserve Bank. With a view to providing adequate foreign exchange facilities to common persons, to widen the scope of activities which the Authorised Persons are eligible to undertake, to increase the number of entities that are eligible to sell foreign exchange t....
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....uents concerned. 7. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Vinay Baijal) Chief General Manager Annex I [Annexure to A. P. (DIR Series) Circular No. 25 dated March 6, 2006] Authorised Person- - Authorisation as Authorised Dealer (AD) - Category II Scheme With a view to providing adequate foreign exchange facilities to common persons for efficient customer service through competition there was a need to widen the scope of activities which the Authorised Persons are currently eligible to undertake and also to inc....
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.... (FFMCs) * Dept. of Posts * Urban Co-op. Banks * Other FFMCs FFMCs Purchase of foreign exchange and sale for private and business visits abroad. (No Change) 3. Enhanced Activities permitted to ADs - Category IIADs-Category II will be permitted to release / remit foreign exchange for the following transactions: a. Private Visits, b. Remittance by tour operators / travel agents to overseas agents / principals / hotels, c. Business Travel, d. Fee for participation in global conferences and specialized training,e. Remittance for participation in international events / competitions (towards training, sponsorship and prize money). f. Film shooting, g. Medical Treatment abroad, h. Disbursement of crew wages, i. Overseas Education,....
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....e while providing regulatory / prudential comfort. The criteria for upgradation of existing FFMCs to AD-Category II include minimum net owned funds of Rs. 10 crores; satisfactory functioning as FFMC for at least two years and satisfactory credit report from their bankers. B. Urban Co-operative Banks (UCBs) With the adoption of the road map as outlined in the "vision document" for Cooperative sector many of the supervisory concerns of the sector are being addressed. AD Category- II are not permitted to undertake any open position risk and the activities permitted under these licences only allow conversion from one currency to another currency. Therefore, Urban Co-operative Banks with strong financials, good governance and providing regula....
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....ircular. 7. Inspection / Audit For ADs-Category II, an auditor's certificate confirming compliance with the Rules / Regulations / Directions will be adequate. However, the Reserve Bank reserves the right to inspect them when considered necessary. Reserve Bank may also require a special audit of the ADs-Category II, depending on the nature of the transactions, by an auditor from the approved list of the Reserve Bank/ Institute of Chartered Accountants of India. 8. Anti-Money Laundering / Know Your Customer (KYC) Norms KYC and Anti-Money Laundering norms prescribed for FFMCs will be applicable to ADs-Category II also. Annex II [Annexure to A. P. (DIR Series) Circular No. 25 dated March 6, 2006] Monthly Report to be submitted by the AD....