Non-deposit taking NBFCs offering Foreign Exchange Transactions on individuals will be eligible for obtaining Authorized Dealer (AD) Category II Licence from Reserve Bank of India. An RBI notification adds
- Large set of population is increasingly getting connected with forex transactions on individual accounts.
- It is necessary to increase the accessibility and improve the efficiency of services, extended to public for their day to day non-trade current account transactions.
- Thus, systematically non deposit taking investment and credit companies should be made eligible for a Category II Licence.
- NBFCs having a minimum grade rating are eligible for the licence
- Also, NBFCs offering Forex Services should have a board approved policy on managing risks including currency risks and handling customer grievances arising out of such activities.
- At least at monthly intervals, a monitoring mechanism will be put in place for such services.
- The eligible NBFCs desirous of undertaking AD CAT II activities should approach RBI for obtaining such licence.
AD category II means entities authorized by RBI to deal in foreign exchange for specified purposes which includes upgraded full fledged money changers (FFMCs), Select Regional Rural Banks (RRBs), Select Urban Co-operative banks and certain other entities.