Streamlining Reporting Procedures: RBI Circular Enhances Transparency for Money Transfer Service Scheme

RBI/2023-24/130 A.P. (DIR Series) Circular No. 15

The Reserve Bank of India issued a circular dated 05.03.2024 bearing number RBI/2023-24/130 A.P. (DIR Series) Circular No. 15 amending the procedure for submission of statements by the authorized persons offering services under Money Transfer Service Scheme.

Money Transfer Service Scheme is a quick and easy method 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. The remitters and the beneficiaries under this scheme are individuals only.

Money Transfer Service Scheme was introduced to ensure that foreign currency transfer happens swiftly and smoothly in India. Under the scheme, the inward remittance of the funds is done by money transfer companies abroad known as the Overseas Principal. These funds will be disbursed to the beneficiaries in India at the contemporary exchange rates through the agents known as Indian Agents authorized under Section 10 of the Foreign Exchange Management Act, 1999. However, the Indian Agent is not allowed to remit any amount to the Principal Overseas.

The Reserve Bank of India in order to secure compliance with the provisions of the Foreign Exchange Management Act, 1999, mandated the Authorized Persons who are Indian Agents under the Money Transfer Service Scheme to submit a quarterly statement, within 15 days from the close of the quarter to which it relates, on the quantum of remittances received through Money Transfer Service Scheme using the eXtensible Business Reporting Language (XBRL) platform vide A.P. (DIR Series) Circular No. 70 dated 19.05.2023. This mechanism of reporting was implemented by the Reserve Bank of India using its powers conferred under Section 10(4), Section 11(1) and Section 11(2) of the Foreign Exchange Management Act, 1999.

The procedure regarding the aforesaid submission of statements was modified vide RBI/2023-24/130 A.P. (DIR Series) Circular No. 15 dated 05.03.2024 and it was decided that the reporting of the statements shall be done on the newly launched data warehouse Centralized Information Management System (“CIMS”) portal (URL: https://sankalan.rbi.org.in/) with effect from quarter ending March 2024. A new feature of submitting a “nil” report has been included in case no remittance was received during any quarter.