TMI BlogMaster Circular on Money Transfer Service Scheme (As updated on March 25, 2015)X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanungo) Principal Chief General Manager INDEX PART-A SECTION I Guidelines for permitting(authorising) Indian Agents under Money Transfer Service Scheme (MTSS) SECTION II Guidelines for Overseas Principals SECTION III Guidelines for appointment of Sub-Agents by Indian Agents SECTION IV Guidelines for renewal of permission (authorisation) of existing Indian Agents SECTION V Inspection of Indian Agents SECTION VI KYC/ AML/ CFT Guidelines for Indian Agents SECTION VII General Instructions PART-B Reports / Statements Annex-I: Format for Sub Agents of Indian Agents of MTSS Annex-II: Statement showing details of quantum of remittances received through Money Transfer Scheme during the quarter ended Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey Changer (FFMC), as defined in the A.P. (DIR Series) Circular No. 25 [A.P. (FL Series) Circular No. 02] dated March 6, 2006 , or a Scheduled Commercial Bank or the Department of Posts. (ii) The applicant should have minimum Net Owned Funds of ₹ 50 lakh. Note :- (i) Owned Funds :- (Paid-up Equity Capital + Free reserves + Credit balance in Profit Loss A/c) minus (Accumulated balance of loss, Deferred revenue expenditure and Other intangible assets) (ii) Net Owned Funds :- Owned funds minus the amount of investments in shares of its subsidiaries, companies in the same group, all (other) non-banking financial companies as also the book value of debentures, bonds, outstanding loans and advances made to and deposits with its subsidiaries and companies in the same group in excess of 10 per cent of the Owned funds. 3. Procedure for making Applications to the Reserve Bank Application for necessary permission to act as an Indian Agent may be made to the respective Regional Office of the Foreign Exchange Department of the Reserve Bank of India, under whose jurisdiction the registered office of the applicant falls and should be accompanied by the documents pertainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irement Collateral equivalent to 3 days' average drawings or US $ 50,000, whichever is higher, may be kept by the Overseas Principal in favour of the Indian Agent with a designated bank in India. The minimum amount of US $ 50,000 shall be kept as a foreign currency deposit while the balance amount may be kept in the form of a Bank Guarantee. The adequacy of collateral should be reviewed by Indian Agents at quarterly intervals on the basis of remittances received during the past three months. 5. Other conditions a. Only cross-border personal remittances, such as, remittances towards family maintenance and remittances favouring foreign tourists visiting India shall be allowed under this arrangement. Donations/contributions to charitable institutions/trusts, trade related remittances, remittance towards purchase of property, investments or credit to NRE Accounts shall not be made through this arrangement. b. A cap of US $ 2500 has been placed on individual remittance under the scheme. Amounts up to ₹ 50,000/- may be paid in cash to a beneficiary in India. Any amount exceeding this limit shall be paid by means of account payee cheque/ demand draft/ payment order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Bank / Government or financial regulatory authority of the country concerned for carrying on Money Transfer Activities. The country of registration of the Overseas Principal should be AML compliant. c. The minimum Net Worth of Overseas Principals should be at least US $ 1 million as per the latest audited balance sheet, which should be maintained at all times. However, the Reserve Bank may consider relaxing the minimum Net Worth criterion in case of Overseas Principals incorporated in FATF member countries and are supervised by the concerned Central Bank/ Government or financial regulatory authority. d. The Overseas Principal should be well established in the money transfer business with a track record of operations in well regulated markets. e. The arrangement with Overseas Principal should result in considerably increasing access to formal money transfer facilities at both ends. f. The Overseas Principal should be registered with the overseas trade / Industry bodies. g. The Overseas Principal should have a good rating from one of the international credit rating agencies. h. The Overseas Principal should submit confidential reports from at least two of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable, in respect of them. 4. Due Diligence of Sub Agents The Indian Agents and the Overseas Principals should undertake the following minimum checks while conducting due diligence of the Sub Agents, other than ADs Cat-I, ADs Cat-II, Scheduled Commercial Banks, FFMCs and the Deptt. of Posts. existing business activities of the Sub Agent/ its position in area Shop Establishment/ other applicable municipal certification in favour of the Sub Agent verification of physical existence of location of the Sub Agent conduct certificate of the Sub Agent from the local police authorities. (certified copy of Memorandum and Articles of Association and Certificate of Incorporation in respect of incorporated entities). Note: Although obtaining of conduct certificate of the Sub Agent from the local police authorities is non-mandatory for the Indian Agents, the Indian Agents must take due care to avoid appointing individuals/ entities as Sub Agents who have cases / proceedings initiated / pending against them by any law enforcing agencies. declaration regarding past criminal cases, cases initiated/ pending against the Sub Agent and/or its directors/ partners by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to conduct due diligence before appointing a Sub Agent and any irregularity observed could render the Indian Agent s permission liable for cancellation. SECTION IV Guidelines for renewal of permission(authorization) of existing Indian Agents : 1. Necessary permission to Indian Agents will be issued initially for a period of one year, which may be renewed for one to three years at a time on the basis of fulfilment of all conditions and other directions/ instructions issued by the Reserve Bank from time to time by Indian Agents. 2. The applicant should be an Authorised Dealer Category-I bank or an Authorised Dealer Category-II or a Full Fledged Money Changer (FFMC), as defined in the A.P. (DIR Series) Circular No. 25 [A.P. (FL Series) Circular No. 02] dated March 6, 2006, or a Scheduled Commercial Bank or the Department of Posts. 3. The Indian Agent should have minimum Net Owned Funds of ₹ 50 lakh. 4. Application for renewal of permission should be submitted to the Regional Office concerned of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the Indian Agent falls along-with the documents pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002 and other instructions in this regard so far and from time to time in future, shall, mutatis mutandis, be applicable to all Authorised Persons (APs), who are Indian agents under MTSS and to their Sub-agents. SECTION VII General Instructions All Overseas Principals are required to submit their annual audited balance sheet along with a certificate on Net Worth from their Statutory Auditors to the concerned Regional Office of the Foreign Exchange Department and the Department of Payment and Settlement Systems of the Reserve Bank. Similarly, all Indian Agents are required to submit their annual audited balance sheet along with a certificate from their Statutory Auditors on Net Owned Funds to the Regional offices concerned of the Foreign Exchange Department of the Reserve Bank. As the Overseas Principals and the Indian Agents are expected to maintain minimum Net Worth and Net Owned Funds respectively on an ongoing basis, they are required to bring it to the notice of the Reserve Bank immediately along with a detailed plan of restorin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agents of Indian Agents of MTSS 1. Name of the Sub Agent 2. Sub Agent Category (AD Cat-I bank/ AD Cat-II/ Other Scheduled Commercial Bank/ Full Fledged Money Changer/ Department of Posts/ Registered NBFC/ Others) 3. Address of the registered/corporate/administrative office with telephone number/s, Fax number/s and e-mail id/s. 4. Registered with 5. Registration Number 6. Details of Registration (papers to be attached as at Annex-Ia) 7. PAN Number (copy as at Annex-Ia) 8. Name/s of Banker/s and Bank Account Number/s (enclosures as at Annex-Ia) 9. Details (Name, Nationality, Residential address, Controlling interest in any other company, PAN Number) of each promoter with more than 10% equity holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived through Money Transfer Service Scheme during the quarter ended ________________ Name of the Indian Agent ______________________________________ Name of the Overseas Principal Total quantum of remittances received in US $ INR equivalent Note: This statement is required to be submitted to the Regional Office concerned of the Foreign Exchange Department of the Reserve Bank within 15 days from the close of the quarter to which it relates. Annex-III Statement of Collateral kept by Indian Agents Name of the Indian Agent __________________________ Name of the Overseas Principal Total quantum of remittances received during the past 6 months in US $ Amount of collateral held in US $ Collateral kept in various forms (Foreign Currency Deposit/ Bank Guarantee) Last review of adequacy of collateral along with observations Note: This statement as at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29, 2012 17. A.P.(DIR Series) Circular No. 108 April 17, 2012 18. A.P.(DIR Series) Circular No. 132 June 8, 2012 19. A.P.(DIR Series) Circular No. 49 November 7, 2012 20. A.P.(DIR Series) Circular No. 67 January 2, 2013 21. A.P.(DIR Series) Circular No. 71 January 10, 2013 22. A.P.(DIR Series) Circular No. 73 January 10, 2013 23. A.P.(DIR Series) Circular No. 89 March 12, 2013 24 A.P.(DIR Series) Circular No.102 May 3, 2013 25 A.P.(DIR Series) Circular No.35 September 4, 2013 26 A.P.(DIR Series) Circular No.110 March 4, 2014 27 A.P. (DIR Series) Circular No.125 April 25, 2014 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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