Frequently Asked Questions

FEMTA — the Foreign Exchange & Money Transfer Association — is a trade body of RBI-authorised Full-Fledged Money Changers (FFMCs) and forex professionals, founded in 2017 to promote compliance, fair practice and growth across the money-changing trade.

No. FEMTA is an industry trade association. Regulation of money changing rests with the Reserve Bank of India under FEMA, 1999. FEMTA represents members and shares knowledge and best practice.

FEMTA's single point of contact for official communication is +91 81423 84788. You can also use the contact form on this site or email support@femta.org.

The knowledge base offers general guidance grounded in RBI directions, but it is not legal or tax advice. For specific matters, rely on the current RBI Master Direction or a qualified professional.

FEMTA shares compliance updates and knowledge, runs events such as FxCon, represents the trade in policy discussions, offers a members' resource library, and supports networking and best practice among money changers.

FEMTA collects only what is needed to run membership, events and placements, stores it securely and does not publish your details without consent. See the Privacy Policy for specifics.

FEMTA operates primarily across Telangana, Andhra Pradesh and beyond. Use the contact details on this site for correspondence.

Business (Prime) membership is for registered money-changing companies licensed by the RBI. Associate membership is for individuals affiliated with a member company; Affiliate membership is for independent forex professionals.

Prime ₹5,000, Associate ₹1,000 and Affiliate ₹2,500 — paid by bank transfer only (no cash). Membership fees are non-refundable, except in exceptional cases considered by the Executive Committee. Fees are annual (calendar year, January–December).

Create a free account, choose your membership type, complete the online application, upload documents and submit. The Executive Committee reviews every application; membership is valid only after the Board's approval.

By bank transfer to FEMTA's account (A.P. Mahesh Co-operative Urban Bank, Secunderabad; A/c 007001200015912; IFSC APMC0000007). No cash. Membership fees are non-refundable, except in exceptional cases considered by the Executive Committee.

Yes — as an Associate member if affiliated with a member company (branch head, franchise owner, employee or authorised representative), or as an Affiliate member if an independent forex professional.

Applications are reviewed by the Executive Committee. Timelines vary with document completeness; you can track your status from your dashboard and will be notified on a decision.

Membership fees are non-refundable, except in exceptional cases considered by the Executive Committee.

Yes — you can request an upgrade (for example Affiliate to Prime) from your dashboard; the committee reviews the change and any fee difference applies.

Only if you choose to be listed. The directory is opt-in and starts empty — members publish their details voluntarily.

A Full-Fledged Money Changer is a company authorised by the RBI to purchase foreign exchange from residents and visiting non-residents and to sell foreign exchange for private and business travel.

AD-I (mostly banks) can do all permitted current and capital account transactions; AD-II can do specified current-account transactions plus all FFMC activities; an FFMC can buy forex and sell it for travel purposes only.

Minimum NOF is ₹25 lakh for a single-branch FFMC and ₹50 lakh for a multiple-branch FFMC, along with company registration and a "fit and proper" standing. Confirm current figures with the RBI.

Apply online through the RBI APConnect portal to the jurisdictional Regional Office, with incorporation, MoA/AoA, audited accounts, banker's report, declarations and a board resolution.

An FFMC should commence operations within six months of the licence being issued and inform the Regional Office, after submitting proof of premises.

Yes, but only with the RBI's prior approval — an FFMC may not operate from any place other than its permanent place of business without approval.

Yes. AD-I banks, AD-II entities and FFMCs may appoint franchisees for restricted money changing (buying foreign currency notes, coins and TCs and converting them to INR). The franchiser is responsible for franchisee KYC/AML, training and audit. Franchisees cannot sell foreign exchange.

An FFMC can sell foreign exchange for private and business travel purposes (within LRS). It buys forex from residents and visiting non-residents. Other sales need higher authorisation (AD-II/AD-I).

FFMCs/AD-IIs distribute prepaid forex (travel) cards through partner banks, which issue the cards. Loads count within the traveller's LRS entitlement.

Apply for renewal through APConnect before the existing licence expires, with up-to-date audited accounts and KYC/AML confirmations. Don't operate on a lapsed licence.

Yes — well-performing FFMCs meeting the eligibility and Net Owned Funds criteria may apply to the RBI for upgrade to AD Category-II, which permits additional current-account transactions.

The RBI assesses the company and its directors on integrity, track record and absence of pending DoE/DRI/law-enforcement or criminal proceedings, at licensing and on an ongoing basis.

From 1 July 2024, the value of foreign currency notes an FFMC/AD-II sells to the public for permitted purposes must be at least 75% of the value of notes it purchased from other FFMCs/ADs, measured quarterly.

The applicant must be a company registered under the Companies Act (or specified equivalent). Eligibility, NOF and fit-and-proper requirements apply; confirm the current position with the RBI.

The Reserve Bank of India, under Section 10 of FEMA, 1999, through its jurisdictional Regional Office.

The RBI reviews authorisations and may renew them subject to compliance, NOF maintenance and a satisfactory track record. Keep filings, audits and NOF current to avoid issues at renewal.

A standing test applied to the company and its directors — clean track record, no serious regulatory/criminal adverse findings — that the RBI assesses before granting or continuing authorisation.

An FFMC deals in widely-traded convertible foreign currencies. It must follow RBI norms on permissible currencies and cannot deal outside authorised activities.

Activity limited to purchasing foreign currency notes, coins and travellers' cheques and converting them to rupees — the scope allowed to franchisees of ADs/FFMCs. Franchisees cannot sell foreign exchange.

Yes — money changers must prominently display the rates they apply and issue proper receipts/encashment certificates, in line with fair-practice and RBI requirements.

Yes — an FFMC may surrender its authorisation to the RBI, settle outstanding obligations and stop money-changing activity from the effective date.

A receipt an Authorised Person issues when buying foreign exchange from a customer. It evidences the source of rupees and lets the customer reconvert unused INR on departure; customers should insist on one.

Follow the RBI counterfeit-note procedure: impound the suspected note, issue the prescribed acknowledgement, do not return it to the tenderer, and report as required. Train staff to detect fakes.

Daily summary and balance books for notes (FLM 1) and travellers' cheques (FLM 2), plus purchase/sale registers (FLM 3–7), supporting a monthly consolidated statement (FLM 8) to the RBI.

Maintain the FLM registers daily, submit the monthly consolidated statement (FLM 8) to the Regional Office early the following month, plus quarterly and annual statements as prescribed.

Acceptance of soiled/mutilated foreign notes is at the money changer's discretion and depends on the issuing authority's norms; many are accepted at a margin or sent for collection. Disclose any deduction.

Money changers quote rates based on the interbank market plus a margin and applicable charges. Rates must be displayed and the customer told the all-in rate before the deal.

Yes — a board-approved business-continuity and information-security posture is expected, scaled to size: secure systems, backups, access controls and incident handling.

Maintain a grievance-redressal mechanism with a named contact and reasonable turnaround, display it to customers, and escalate unresolved matters as per RBI guidance.

Under the Liberalised Remittance Scheme, a resident individual may remit up to USD 250,000 per financial year (April–March) for permitted purposes. Limits are set by the RBI and may change.

All resident individuals, including minors (the form is countersigned by a guardian). It is not available to corporates, partnership firms, HUFs or trusts.

Private travel, business travel, education, medical treatment, maintenance of relatives abroad, gifts/donations, employment/emigration, and certain capital items (property abroad, ODI/OPI) — all within the USD 250,000 limit.

Lottery/sweepstake purchases, margin trading abroad, forex trading abroad, remittances to FATF non-cooperative jurisdictions or terror-risk entities, and a resident gifting foreign currency to another resident's foreign account.

Only with the RBI's prior approval, or where a genuine documented requirement (e.g. medical/education estimate) supports a higher amount under the rules.

Yes — PAN is mandatory for all LRS remittances.

Family members can each use their own USD 250,000 limit and may club for current-account purposes; clubbing is not permitted for certain capital-account transactions unless they are co-owners/co-partners.

Yes, especially for larger remittances — be ready to evidence the source of funds, along with PAN, Form A2 and the LRS declaration.

Up to USD 250,000 per resident individual per financial year (April–March), across all permitted current- and capital-account purposes combined. Confirm the current limit with the RBI.

Yes — the USD 250,000 ceiling is per financial year (1 April–31 March) and resets each year. Unused limit does not carry forward.

Each resident individual, including a minor, has a separate LRS limit. Family members can each remit up to their own limit for a permitted purpose; a minor's form is countersigned by the guardian.

Remittances for lottery/gambling, margin or margin-trading abroad, purchase of FCCBs in the secondary market, and remittances to FATF non-cooperative jurisdictions or RBI-restricted persons are prohibited.

A PAN, the prescribed Form A2 / LRS declaration, KYC, and purpose-specific proof (admission/fee letter for education, estimate for medical, invoice for goods/services, etc.).

Yes — PAN is mandatory for all LRS remittances by resident individuals.

Yes — a resident individual may open and maintain a foreign-currency account abroad for permitted purposes and remit within the LRS limit; the account must be used per FEMA rules.

Yes — gifts and donations are a permitted LRS purpose, within the overall USD 250,000 per-year limit and subject to documentation.

MTSS is a channel for receiving personal inward remittances from abroad. FFMCs/ADs can act as agents/sub-agents of overseas principals to pay out remittances to beneficiaries in India.

MTSS is for personal remittances only (no trade/donation to charities). A cap per transaction and a maximum number of remittances per beneficiary per year apply — confirm the current MTSS limits with the RBI.

Amounts up to the prescribed cash threshold may be paid in cash; larger amounts are credited to the beneficiary's bank account. KYC of the beneficiary is mandatory.

An arrangement under which AD banks tie up with overseas exchange houses to channel inward personal remittances into India. It is bank-led; FFMCs participate as permitted.

No — inward-remittance channels like MTSS are for personal remittances only. Trade-related receipts go through the banking (AD-I) channel.

Identify and verify the beneficiary, record the purpose, screen against sanctions lists and watch for structuring or unusual frequency — the same AML discipline as other transactions.

Within the LRS entitlement, currency notes up to USD 3,000 per visit for most countries; USD 5,000 for Iraq/Libya; full amount for Iran, Russia and CIS countries; full entitlement for Haj/Umrah. The balance is taken as forex card/TC/draft.

Private visits (except to Nepal and Bhutan) are within the overall LRS limit of USD 250,000 per financial year, with the cash-note cap above.

Different rules apply — foreign exchange in the form of foreign currency for travel to Nepal and Bhutan is restricted; carry Indian Rupees (subject to specific limits). Confirm current rules.

A resident may generally carry up to ₹25,000 in Indian Rupees in/out of India, with different rules for Nepal/Bhutan. Confirm the current ceiling.

Within 180 days of your return; but you may retain up to USD 2,000 in notes/TCs plus foreign coins (no ceiling) for future trips. A money changer should not refuse to buy back even after 180 days.

File a Currency Declaration Form (CDF) at customs if foreign-currency notes exceed USD 5,000, or notes + travellers' cheques together exceed USD 10,000.

Yes — GST applies on the "value of supply" of the forex service (a small slab of the transaction amount), not on the whole forex amount. Ask for a tax invoice.

Tour, hotel and transport costs abroad are within the LRS limit; AD banks can remit these, and money changers facilitate the forex/cash component of travel.

Generally up to USD 3,000 (or equivalent) in foreign-currency notes per visit; the balance of your entitlement goes on a forex card or in travellers' cheques. Higher note limits apply for a few countries.

Yes — travellers to Iraq and Libya may carry up to USD 5,000 in notes, and to Iran, Russia and other CIS countries the full entitlement may be drawn in notes. Confirm current carve-outs with the RBI.

A resident may take out and bring in Indian currency notes up to ₹25,000 (per current RBI rules), except to/from Nepal and Bhutan where INR notes above certain denominations are restricted.

Declare on a Currency Declaration Form (CDF) if foreign-currency notes exceed USD 5,000, or the total of notes plus travellers' cheques exceeds USD 10,000.

No foreign exchange is released for travel to Nepal and Bhutan; expenses there are met in Indian rupees (subject to denomination limits).

Sell unused foreign exchange to an Authorised Person/FFMC within 180 days of your return, unless you keep it within the USD 2,000 retention limit.

You may retain foreign currency notes and travellers' cheques up to USD 2,000 (or equivalent) indefinitely for future use; surrender the rest within 180 days.

Yes — you can buy travel forex up to 60 days before departure; if the trip is cancelled or postponed beyond that, surrender or hold within the retention limit.

Yes — FFMCs buy foreign currency from visiting non-residents and must issue an encashment certificate; the tourist can reconvert unused rupees on departure within the permitted limit.

Passport, visa, admission/offer letter (I-20/CAS/LOA/CoE), the institution's fee estimate, PAN and the LRS declaration. Tuition is wired under LRS against the estimate.

Up to USD 250,000 per financial year on self-declaration; more is allowed against the institution's estimate for actual fees and living costs.

From 1 April 2025, no TCS up to ₹10 lakh per year; above that, education TCS is 2%. There is no TCS at all on education remittances funded by a loan from a recognised institution.

Yes — a forex card for living expenses plus foreign currency cash up to the USD 3,000 note limit for arrival; tuition is best sent by wire transfer.

A student going abroad for studies is generally treated as a non-resident under FEMA and becomes eligible for NRI facilities (such as NRE/NRO accounts).

Tuition and living costs are met within the LRS limit of USD 250,000 per financial year; amounts above that for genuine education needs require the AD bank's consideration with documentation.

Yes — close relatives can remit education fees within their own LRS limits as maintenance/education, with the institution's fee documentation.

Admission/offer letter, fee demand/estimate, the student's and remitter's KYC, PAN and the LRS declaration; the AD/FFMC may ask for more.

Education remittances funded by a loan from a recognised financial institution attract no TCS, which can make a loan-funded remittance more tax-efficient than self-funding above the threshold.

A Non-Resident External rupee account for parking foreign earnings in India — freely repatriable, and the interest is generally tax-free in India. Held by NRIs/PIOs.

A Non-Resident Ordinary account for managing income earned in India (rent, dividends). Repatriation is subject to limits and tax; interest is taxable in India.

A Foreign Currency Non-Resident (Bank) term deposit held in foreign currency, protecting the depositor from rupee exchange-rate risk; principal and interest are repatriable.

Broadly, someone in India for more than 182 days in the preceding financial year, subject to intent/purpose tests. Residential status drives which facilities and accounts apply.

A Resident Foreign Currency account that returning Indians can use to hold foreign currency brought back, without converting to rupees.

Yes — within the declaration rules (CDF above USD 5,000 in notes or USD 10,000 total) and applicable retention norms.

Customer identification and due diligence for each transaction type/threshold, risk categorisation, record-keeping, a Principal Officer, staff training, and CTR/STR reporting to FIU-IND — under a Board-approved KYC/AML/CFT policy.

A CTR (Cash Transaction Report) is filed for cash transactions above the prescribed threshold; an STR (Suspicious Transaction Report) is filed whenever you suspect proceeds of crime, regardless of amount. Both go to FIU-IND.

Extra checks for higher-risk customers — PEPs, high cash intensity or high-risk geographies — including senior-management sign-off and closer monitoring.

A Politically Exposed Person — someone entrusted with prominent public functions. PEPs require enhanced due diligence and senior-management approval to onboard.

Transaction and identification records, FLM registers and supporting documents, retained for the period prescribed under the KYC Direction/PMLA, available for audit and RBI inspection.

Structuring below thresholds, large cash exchanges out of line with the customer profile, reluctance to give ID/purpose, third-party funding, and dealings with high-risk/sanctioned jurisdictions.

Yes — screen customers/counterparties against the UNSC consolidated list and other applicable lists; freeze and report any match per the prescribed procedure without proceeding.

The designated official responsible for monitoring transactions, ensuring KYC/AML compliance and filing reports to FIU-IND. Every Authorised Person should appoint one.

Identification applies per the prescribed thresholds and transaction types; even below thresholds, watch for structuring. When in doubt, identify the customer and record the purpose.

Alerting a customer that a suspicious-transaction report has been or may be filed. It is prohibited — never disclose STR/CTR filing to the customer.

Assign low/medium/high risk from the customer profile, transaction pattern and geography; apply proportionate due diligence and review on trigger events.

For non-individual customers, identify the natural persons who ultimately own or control the entity. It prevents misuse of companies/trusts to hide identity.

Yes — Authorised Persons should have a board-approved KYC/AML/CFT policy covering CDD, risk, monitoring, reporting, record-keeping, training and the Principal Officer's role.

Provide AML/CFT training to relevant staff regularly (typically at least annually) and on induction, with refreshers when rules change.

A prepaid travel card loaded with foreign currency at a locked-in rate, usable at merchants and ATMs abroad — safer than cash and reloadable. Loads count within the LRS limit.

Yes — reload remotely subject to a fresh KYC declaration and within your remaining LRS entitlement.

Encash it on return (within the 180-day surrender rule) or retain within the USD 2,000 limit for future travel. Disclosure of fees applies.

Report it to the issuing bank with the transaction reference; a chargeback can be raised within the scheme's timelines for unauthorised or failed transactions. Block a lost card immediately.

Many forex cards are multi-currency, letting you load several currencies on one card at locked-in rates and switch as you travel. Features vary by issuer.

Block it immediately via the issuer's 24x7 helpline or app; most programmes offer emergency assistance or a replacement/cash so you are not stranded.

Typical charges include issuance, reload, ATM withdrawal, cross-currency and inactivity fees. These must be disclosed up front — ask for the schedule of charges.

Yes — loads and reloads count within your LRS entitlement for the financial year, and a KYC declaration applies.

The Foreign Exchange Management Act (FEMA), 1999, with RBI Master Directions and A.P. (DIR Series) circulars. Money changing needs a valid RBI licence.

Current-account transactions (travel, education, medical, trade) are generally permitted; capital-account transactions (overseas investment, property) are permitted only as specifically allowed by RBI.

Up to three times the amount involved (or ₹2 lakh if not quantifiable), plus up to ₹5,000 per day for a continuing contravention; confiscation may also be ordered. Many breaches can be compounded.

A way to voluntarily admit and settle a contravention by paying a compounding amount to the RBI (or ED for certain matters), avoiding prolonged proceedings.

Only with Authorised Persons — AD-I banks, AD-II entities, FFMCs and their franchisees. Dealing in forex outside this channel can be a FEMA contravention.

Yes — FFMCs/AD-IIs must put in place a system of concurrent audit of money-changing transactions, as prescribed by the RBI, and be ready for RBI inspection.

Periodic FLM and turnover statements, and AML reports (CTR/STR) to FIU-IND, per the RBI's Reporting under FEMA direction — filed accurately and on time, typically via APConnect.

On the RBI Master Directions page (rbi.org.in) and the RBI Notifications page for A.P. (DIR Series) circulars. The latest RBI document always prevails over any summary.

Many contraventions can be regularised by compounding — voluntarily admitting and paying a compounding amount to the RBI. Seek professional advice and approach the RBI promptly.

The RBI's online portal through which Authorised Persons (including FFMCs) apply for and manage authorisations and file certain returns. Keep your credentials and filings current.

Purchasing virtual digital assets is not a recognised LRS purpose and carries regulatory uncertainty; do not release forex for prohibited purposes. Seek guidance before acting.

Retain identity and transaction records for the period prescribed under the PMLA/KYC Direction (commonly several years after the transaction or relationship ends), available for inspection.

Tax Collected at Source on LRS/overseas-tour remittances under Section 206C(1G). From 1 April 2025: no TCS up to ₹10 lakh/year; 2% on education/medical above the threshold; nil on loan-funded education remittances.

Yes — GST applies to the service. The taxable value is computed on a slab basis on the gross amount of currency exchanged, and GST is charged on that value. Confirm the current slabs/rates with your tax adviser.

Broadly, 1% of the gross for small amounts, with reducing percentages and a banded formula for larger amounts, subject to a minimum and a maximum taxable value. GST applies on the computed value — confirm current figures.

Yes — TCS collected on LRS remittances is reflected in your Form 26AS and can be claimed as a credit/adjusted against your income-tax liability when you file your return.