TMI BlogMaster Direction – Money Transfer Service Scheme (MTSS) (Updated as on February 29, 2024)X X X X Extracts X X X X X X X X Extracts X X X X ..... es) Circulars in regard to any change in the rules, regulations, notifications, directions or orders or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewith shall be simultaneously amended suitably. Yours faithfully, (Puneet Pancholy) Chief General Manager Master Direction on Money Transfer Service Scheme 1. Introduction 1.1 Money Transfer Service Scheme (MTSS) is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible. No outward remittance from India is permissible under MTSS. The system envisages a tie-up between reputed money transfer companies abroad known as Overseas Principals and agents in India known as Indian Agents who would disburse funds to beneficiaries in India at ongoing exchange rates. The Indian Agents can in turn also appoint sub-agents to expand their network. The Indian Agent is not allowed to remit any amount to the Over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Reserve Bank Application for necessary permission to act as an Indian Agent may be made 1 (through the APConnect application (https://apconnect.rbi.org.in/entity) by non-bank AD Category -II and FFMCs) 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 pertaining to its proposed Overseas Principal, as detailed below: A declaration to the effect that no proceedings have been initiated by / are pending with the Directorate of Enforcement (DoE) / Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities, against the applicant or its directors and that no criminal cases are initiated / pending against the applicant or its directors. A declaration to the effect that proper policy framework on Know Your Customer (KYC) norms/ Anti-Money Laundering (AML) standards/ Combating the Financing of Terrorism (CFT), in accordance with the guidelines issued by Reserve Bank of India, Department of Banking Regulation, Central Office as referred to in their latest Master Direction Know Your Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty, investments or credit to NRE Accounts shall not be made through this arrangement. b. A cap of USD 2500 has been placed on individual remittance under the scheme. Amounts up to Rs.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, etc., or credited directly to the beneficiary's bank account only. However, in exceptional circumstances, where the beneficiary is a foreign tourist, higher amounts may be disbursed in cash. Full details of such transactions should be kept on record for scrutiny by the auditors/ inspectors. c. Only 30 remittances can be received by a single individual beneficiary under the scheme during a calendar year. 3.5 Criteria for RBI decisions (i) The Indian Agents need to have strength and efficiency to function profitably in a highly competitive environment. As a number of Indian Agents are already functioning, permission (authorization) will be issued on a very selective basis to those who meet the above requirements, have necessary outreach and who are likely to conform to the best international and domestic standards of custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney transfer facilities at both ends. The Overseas Principal should be registered with the overseas trade / Industry bodies. The Overseas Principal should have a good rating from one of the international credit rating agencies. The Overseas Principal should submit confidential reports from at least two of its bankers. The Overseas Principal should submit a report certified by independent Chartered Accountants, regarding steps taken to comply with anti-money laundering norms in the home/ host country. The Overseas Principals will be fully responsible for the activities of their Agents and Sub Agents in India. Proper records of remitters as also beneficiaries pertaining to all pay-outs in India are to be maintained by the Overseas Principals. All records must be made accessible on demand to the Reserve Bank or other agencies of the Government of India, viz., Ministry of Finance, Ministry of Home Affairs, FIU-IND, etc. Full details of the remitters and the beneficiaries should be provided by the Overseas Principals, if called for. 5. Guidelines for appointment of Sub Agents by Indian Agents 5.1 The Scheme Under the Scheme, Indian Agents can enter into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 any law enforcing agency, if any PAN Card of the Sub Agents and its directors/ partners Photographs of the directors/ partners and the key persons of the Sub Agent The above checks should be done on a regular basis, at least once in a year. The Indian Agents should obtain from the Sub Agents proper documentary evidence confirming the location of the Sub Agents in addition to personal visits to the site. The Indian Agents should discontinue agreements with Sub Agents who do not meet the criteria laid down above within three months from the date of this circular. 5.5 Selection of Centers The Indian Agents are free to select centers for operationalizing the Scheme. However, this may be advised to the Reserve Bank. 5.6 Training The Indian Agents would be expected to impart training to the Sub Agents as regards operations and maintenance of records. 5.7 Reporting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 to the Overseas Principal as detailed above and the following documents: A declaration to the effect that no proceedings have been initiated by/ are pending with the Directorate of Enforcement (DoE)/ Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities, against the Indian Agent or its directors and that no criminal cases are initiated/ pending against the Indian Agent or its directors. A write up on the KYC/ AML/ CFT, risk management and internal control policy framework, put in place by the Indian Agent. Audited Balance Sheet and Profit and Loss Account for the last two financial years of the Indian Agent, if available or a copy of the latest audited accounts, with a certificate from statutory auditors regarding the position of the Net Owned Funds as on the date of application. Confidential Reports from at least two of the bankers of the Indian Agent in sealed cover. Details of sister/ associated concerns of the Indian Agent functioning in the financial s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Due Diligence (CDD) of the recipient before the remittance to such account is credited or allowed to be withdrawn. The Partner Bank shall appropriately mark the direct-to-account remittances to indicate to the Recipient Bank that it is a foreign inward remittance. The Partner Bank shall ensure that accurate originator information and necessary beneficiary information is included in the electronic message while transferring the fund to the Recipient Bank. This information should be available in the remittance message throughout the payment chain i.e. the overseas principal, the Partner Bank and the Recipient Bank. The Partner Bank should add an appropriate alert in the electronic message indicating that this is a foreign inward remittance and should not be credited to KYC non-compliant account or NRE/ NRO accounts. The identification and other documents of the recipient shall be maintained by the Recipient Bank as per the provisions of Prevention of Money Laundering (Maintenance of Records) Rules, 2005. All other requirements under KYC/ AML/ CFT guidelines issued by the Reserve Bank of India for MTSS from time to time shall be adhered to by the Partner Bank. The Recipie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the place only after it has been recorded in the books of accounts of the AP. Similarly, if the destination point of movement of the currency is the office/branch of the AP, it should be recorded in the books of accounts of the AP, on the same day or on the date of receipt. Transfer of foreign currency between branches of the same AP should be accounted as stock transfer and not as sale so that double counting is avoided. B. In the case of doorstep forex service by FFMCs / Authorised Dealers Category II to their regular customers, inter-alia, the processing and accounting of the transaction should take place in the office of the AP and the transaction should be supported by necessary documents for value received. The delivery of the forex should be done by authorised officials of the AP only. C . As far as possible movement of Indian Currency should be made through banking channels (viz. cheque, demand draft, NEFT, RTGS, IMPS etc.) only. The transactions between authorized dealers and FFMCs should be settled by way of account payee crossed cheques / demand drafts/ and in no circumstances the settlement of Indian Currency should be made in cash. The cash (INR) coll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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