The Reserve Bank of India has relaxed prior approval requirements for non-bank remittance platforms partnering with Authorised Dealer banks. This shift places the onus of compliance on the AD banks, enhancing customer protection.
RBI Relaxes Approval Norms for Non-Bank Entities
The Reserve Bank of India (RBI) has announced a significant relaxation in the approval norms for non-bank entities that facilitate outward remittances through Authorised Dealer (AD) banks. This development means that non-bank remittance platforms will no longer require prior approval from the RBI for tie-ups with AD banks, thus streamlining the existing framework.
This new regulation transfers the responsibility of full compliance to the AD banks, which are required to ensure adherence to the Foreign Exchange Management Act (FEMA) provisions. The change is expected to boost the efficiency of remittance services while simultaneously strengthening transparency and customer protection measures. The RBI aims to create a more robust ecosystem for remittances, benefiting both consumers and service providers.
Practitioners in the financial and banking sectors should note this shift, as it could lead to more agile partnerships between banking and non-banking financial entities, potentially increasing competition in the remittance business.
Citations
- RBI Circular (2026) RBI News
