The Reserve Bank of India has simplified FEMA reporting requirements for authorised persons, including money changers and money transfer agents. A new circular issued on June 24, 2026, streamlines several return formats and removes outdated compliance steps. As a result, forex dealers will face a lighter reporting burden going forward.
Key Changes to FEMA Reporting Requirements
The RBI has revised the FLM-8 return format to now capture details of foreign currency note write-offs. Additionally, the central bank has discontinued the prior approval requirement for write-offs exceeding USD 2,000. This is a significant relief for entities managing foreign currency notes regularly.
Authorised persons with franchisee arrangements must now submit a list of those arrangements within 15 days of each quarter’s end. Similarly, Indian Agents under the Money Transfer Service Scheme (MTSS) must submit their sub-agent lists on the same quarterly timeline. These submissions replace more cumbersome earlier processes.
Meanwhile, entities maintaining Nostro accounts and reporting through FETERS are exempt from filing FLM-8 returns entirely. This targeted exemption reduces duplication for larger forex operators.
Returns and Forms That Are Now Discontinued
The RBI has scrapped several legacy formats under its Master Direction on Reporting under FEMA. Specifically, prescribed register formats FLM-1 through FLM-7 have been discontinued. However, FFMCs and non-bank AD Category-II entities must still maintain complete and accurate records of all foreign exchange transactions for inspection purposes.
The quarterly statement on foreign currency accounts opened from export proceeds has also been dropped. Furthermore, the separate List of Additional Locations under MTSS and the related quarterly confirmation requirement have been removed. The Statement of Collateral under MTSS is discontinued too, though Indian Agents must still ensure adequate collateral as per existing rules.
What This Means for Authorised Forex Dealers
These changes reflect the RBI’s ongoing effort to rationalise compliance for authorised persons under FEMA. Therefore, money changers and transfer agents can now redirect resources away from redundant paperwork. The Master Directions on Money Changing Activities and FEMA Reporting will be updated separately to capture all revisions.
The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999. For full details, authorised persons should review the official circular and its annex directly.
Source: RBI Notifications
