FEMA

PROVISIONS

AUTHORISED PERSONS
 AUTHORISED PERSONS UNDER FEMA 1999:

RBI cannot do all transactions in foreign exchange by itself. Therefore, the powers are delegated to
authorised persons with suitable guidelines, to deal in foreign exchange and foreign securities.

Sec. 3 of FEMA 199 require all Dealing in FE through Authorised Persons only.

Sec 2 (c) of FEMA 1999 define Authorised Persons means an Authorised Dealer, Money Changer , Offshore
Banking Unit or any other person authorised u/s 10 (1) to deal in Foreign Exchange or Foreign Securities.

Under Sec 10 (1) of FEMA 1999 empowers RBI to authorise person to deal in Foreign Exchange or Foreign
Securities.

Authorised Paersons can be broadly categorized in the following categories:

1) AUTHORISED DEALERS:
A) Category I
B) Category II
C) Category III

2) Full Fledged Money Changers (FFMC):

3) Off shore Banking Units (OBU):

Authorised Dealers:

List of AD Banks Category wise is available on RBI website under Notifications ->FEMA ->ADs list

Category-I of the list contains all major Banks in India who are providing all Current Account and Capital account
Transactions.

Category-II of the list contains upgraded FFMCs, State Co-Operative Banks, urban Co-Operative Banks, RRBs and
others who are authorized to deal in non-trade Current Account Transactions.

Category-III of the list contains selected financial and other Institutions, who are authorized to deal with specific
transactions incidental to their Foreign Exchange Activities.

Full Fledged Money Changers (FFMCs):

These are the institutes who facilitate purchase and sale of Foreign Exchange for private or business visit. Detailed
guidelines relating to their activities are given in RBI Master Circular on Money Changing Activities.

Off shore Banking Units (OBU):

These are the Banking units, usually established in a specialized area like SEZ where the transactions are
entertained in foreign currency only.