TITLE: India's Reserve Bank Modifies Foreign Exchange Reporting Requirements for Authorised Persons
BODY:
On June 24, 2026, the Reserve Bank of India (RBI) issued a circular modifying reporting requirements under the Foreign Exchange Management Act, 1999 (FEMA) for authorised persons. The circular, issued under the Foreign Exchange Management (Authorised Persons) Regulations, 2026, rationalises certain reporting obligations and prescribes updated reporting formats applicable to authorised dealers, money changers, and money transfer service scheme (MTSS) operators.
Key modifications include discontinuation of prior approval requirements for write-offs of foreign currency notes not exceeding USD 2,000, with the revised FLM-8 return format now capturing such write-off details. Entities maintaining Nostro accounts and reporting transactions through FETERS are exempted from submitting FLM-8 returns. Authorised persons with franchisee arrangements must submit lists of such arrangements within 15 days from the end of each calendar quarter. Indian agents under MTSS must submit sub-agent lists quarterly within 15 days of quarter-end.
The RBI discontinued several reporting obligations, including prescribed formats FLM-1 to FLM-7 under the Master Direction on Reporting under FEMA, though foreign exchange money changers (FFMCs) and non-bank authorised dealer Category-II entities must continue maintaining complete records for inspection purposes. The RBI also discontinued the quarterly statement on foreign currency accounts opened from export proceeds, separate lists of additional MTSS locations, and quarterly confirmations regarding published location lists. The statement of collateral return under MTSS is discontinued, though Indian agents must continue ensuring collateral adequacy.
The RBI will update the Master Direction on Money Changing Activities and Master Direction on Reporting under FEMA separately to reflect these changes. These directions are issued under sections 10(4) and 11(1) of FEMA and take effect immediately.