Rahul Bansal (Finalist) (35929 Points)
07 January 2010Scheme
for
Authorized Dealers Category I (AD) banks,
Authorized Dealers Category-II
and
Full Fledged Money Changers
Appointing Agents/Franchisees
for
Undertaking Restricted Money Changing
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
Objective
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 facility, given below, will enable Authorized Dealers Category-I (AD Cat-I) banks, Authorized Dealers Category-II (AD Cat-II) and full fledged money changers (FFMC) to provide such facilities at all tourist centers and major cities for extended hours and on holidays.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
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 AD Cat-I banks, AD Cat-II as also through (a) Full Fledged Money Changers (FFMCs) and (b) Restricted Money Changers (RMCs). Reserve Bank has stopped issue/renewal of RMC licenses except in certain specific cases. While FFMCs are allowed to, both, buy and sell foreign exchange against Indian rupees, the RMCs can only buy foreign exchange against Indian rupees.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
The Scheme
Under the Scheme, RBI permits AD Cat-I banks, AD Cat-II and FFMCs to enter into agency/franchisee agreements at their option with entities for the purpose of carrying on Restricted Money Changing business i.e. conversion of foreign currency notes, coins or travellers' cheques into rupees.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
Franchisee
A franchisee can be any entity who has a place of business and whose bonafides are acceptable to the AD Cat-I/ AD Cat-II/ FFMC. These franchisees would undertake only restricted money changing business.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
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 Cat-I/ AD Cat-II/ FFMC should, however, include the following salient features :
(A) The display of exchange rates by the franchisee. Exchange Rate for conversion of foreign currency into rupees should be the same or close to the daily exchange rate charged by the AD Cat-I/ AD Cat-II / FFMC at its branches.
(B) The surrender of collections by the franchisee to the franchiser or other authorised persons, as may be agreed upon, within 7 days.
(C) The maintenance of proper record of transactions by the franchisee.
(D) The on-site inspection of premises and records of the franchisee by the franchiser at least once a year.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
The Franchiser i.e. an AD Cat-I, AD Cat-II or an FFMC would need to apply to the respective Regional Office of Reserve Bank under whose jurisdiction their H.O. is situated.
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. Approval would be issued by the Reserve Bank for the first franchisee arrangement. Thereafter, as and when new agency/franchisee 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.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
Form RMC - F
1. Name of the AD/FFMC 2. Name and address of the franchisees Details of locations
i)
ii)
iii)
etc.
3. Arrangements in place to surrender the foreign exchange
4. Reporting and Inspection arrangements.
Authorised Signatory
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
Selection of Centers
Franchisers are free to select centers for operationalising the Scheme.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
Training
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 organizing such training, subject to mutual convenience.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 07 January 2010
Reporting and Inspection
The franchisers i.e. ADs Cat-I / ADs Cat-II / FFMCs would be expected to put in place adequate arrangements for reporting of transactions by the franchisees to the franchisers (on a regular basis) in a simple format to be prescribed by them, 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.
Rahul Bansal
(Finalist)
(35929 Points)
Replied 08 January 2010
DISCLAIMER:
PLEASE NOTE that users of these forum are responsible for checking the accuracy, completeness and/or suitability of all information. I makes no representations, guarantees, or warranties as to the accuracy, completeness, or suitability of the information provided via this forum. The entire risk as to the use of information on this forum is assumed by you. I shall have no liability to a user, or any other person or entity for any indirect, incidental, special, or consequential damages whatsoever, even if I has been advised of the possibility of such damages, or they are foreseeable.
CAclubindia
