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The objective of the Scheme is to provide easier conversion facilities for travellers and tourists, including NRIs, by enlarging the network of money changing facilities in the country. It is expected that the new facility, given below, will enable banks and full fledged money changers to provide such facilities at all tourist centres and major cities for extended hours and on holidays.

Present Money Changing facilities

At present, the conversion of currency notes, coins or travellers' cheques designated in foreign currency into Indian rupees is possible through Banks designated as Authorised Dealers (ADs) as also through two other channels viz. (a) full fledged money changers (FFMCs) and (b) Restricted Money changers (RMCs). While FFMCs are allowed to, both, buy and sell foreign exchange against Indian rupees, the RMCs can only buy foreign exchange against Indian rupees. At present all the above entities require authorisation from the Reserve Bank to undertake the money changing business.

Proposed Scheme

Under the proposed Scheme, in addition to the existing facilities, RBI would freely permit Banks i.e. ADs and FFMCs to enter into agency/franchising agreements at their option with entities for the purposes of carrying on Restricted Money Changing business i.e. conversion of foreign currency notes, coins or travellers' cheques into rupees.


A franchisee can be any entity who has a place of business and whose bonafides are acceptable to the AD/FFMC. These franchisees would undertake only restricted money changing business.

Agency/Franchise Agreement

Franchisers are free to decide on the tenor of the arrangement as also the commission or fee through mutual agreement with the franchisee.

The Agency/Franchise agreement to be entered into by an AD/FFMC should, however, include the following salient features :

The display of exchange rates by the franchisee. Exchange Rate of foreign currency into rupees should be the same or close to the daily exchange rate charged by the AD/FFMC at its branches. The surrender of collections by the franchisee to the franchiser or other authorised persons, as may be agreed upon, within 7 days. The maintenance of proper record of transactions by the franchisee. The on-site inspection of premises and records of the franchisee by the franchiser at least once a year.

Procedure for application

The Franchiser i.e. an AD or an FFMC would need to apply to the Reserve Bank in the enclosed format for putting in place arrangements under this Scheme. The application should be accompanied by a declaration that while selecting the franchisees adequate due diligence has been carried out and that such entities have undertaken to comply with all the provisions of the franchising agreement/prevailing RBI regulations regarding money changing. Approvals would be issued by the Reserve Bank on a one time basis. Thereafter, as and when new agency/franchise agreements are entered into, these would have to be reported to the Reserve Bank on a post-facto basis along with similar declaration as indicated above.

Existing RMCs

Existing RMCs who are licensed by the Reserve Bank are free to undertake money changing under this scheme as a franchisee of an AD/FFMC on surrendering the existing RBI licence. Those who do not opt for operation under this Scheme may continue to undertake existing money changing business till the validity of their license.

Selection of Centres

Franchisers are free to select centres for operationalising the Scheme.


Franchisers would be expected to impart training to the agents/franchisees as regards operations and maintenance of records. Reserve Bank would also be willing to provide the required support for organising such training, subject to mutual convenience.

Reporting and Inspection

The franchisers i.e. ADs/FFMCs would be expected to put in place adequate arrangements for reporting of transactions by the franchisees to ADs/FFMCs in a simple format to be prescribed by them on a regular basis, say at monthly intervals.

As mentioned above, a system of inspection of the books of franchisees should be put in place. The purpose of such inspection, which should be done at least once a year, would be to ensure that the money changing business is being carried out by the franchisees in conformity with the terms of agreement/prevailing RBI guidelines and that necessary records are being maintained by the franchisees.


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