To help them carry out forex transaction on individual accounts
MUMBAI: The Reserve Bank of India (RBI) has decided to extend the Authorised Dealer Category 2 licence to systemically important non-deposit taking investment and credit companies (NBFCs), subject to certain conditions.
The move is in the wake of a large segment of population increasingly getting connected with forex transactions on individual accounts.
The RBI believes the new step will help increase the accessibility and efficiency of services extended to the members of the public who are increasingly seeking day-to-day non-trade current account transactions, especially the forex transactions on individual accounts.
However, RBI made it a condition that these NBFCs offering such services should have a minimum investment grade rating. Moreover, these NBFCs to be able to offer the said services should put in place a board approved policy on (a) managing the risks, including currency risk, if any, and (b) handling customer grievances arising out of such activities.
“A monitoring mechanism, at least at monthly intervals, shall be put in place for such services by these companies as an additional condition,” the RBI statement said.
The RBI has asked the eligible NBFCs desirous of undertaking AD-Cat II activities to approach the Reserve Bank of India, Foreign Exchange Department, Central Office, Mumbai for the AD-Cat II licence.
