MONEY TRANSFER SERVICE SCHEME - ALL YOU NEED TO KNOW
Essential for All Upcoming Bank Exams
Introduction:
Money Transfer Service Scheme (MTSS) is a fast and easy way of
transferring personal consignment from abroad to beneficiaries in India. Under
MTSS only inward personal remittances into India are permissible. Outward
remittance from India are not permissible. MTSS envisages a tie-up between
reputed money transfer companies abroad known as Overseas Principals and agents
in India known
as Indian Agents who would disburse funds to beneficiaries in
India at ongoing exchange rates. RBI revised the guidelines on 12th
March, 2013 on MTSS.
Statutory Basis:
Only persons authorized by RBI can act as an Indian Agent under MTSS.
Eligibility for agents:
An AD category- I or category –II bank or a Full Fledged Money
Changer, or a Commercial Bank or Department of Posts.
Minimum Net Owned Funds should be Rs. 50lakh.
Collateral Requirement:
Collateral equivalent to 3 days’ average drawing or 50, 000 US dollar
whichever is higher, may be kept by the Overseas Principal in favour of the
Indian Agent with a designation bank in India. (Minimum 50, 000 US dollar be
kept as foreign currency deposit).
Other Conditions:
Only Cross-border personal remittances (remittances towards family
maintenance and remittances favouring foreign tourist visiting India) shall be
allowed. Donations to charitable institutions/ trusts, purchase of property, remittance
for trade, investments or credit to NRE A/c, shall not be made.
30 remittances can be received during calendar year.
A Cap of 2500 US dollar has been placed on individual remittance.
Amounts up to Rs. 50, 000 may be paid in cash to a beneficiaries in India.
Guidelines for Overseas Principals:
The minimum Net Worth of overseas Principals should be at least 1
million US dollar as per the latest audited balance sheet.
Appointment of Sub-Agents by Indian Agents:
The Indian Agent can appointed Sub agents –
Indian Agents should submit information pertaining to sub agents on a
quarterly basis within 15 days, to RBI for onward submission to the Ministry of
Home Affairs (MHA), Govt. of India. In case of, any objection by the MHA the
sub Agency arrangement anxious should be concluded immediately.
The audit and on-site visit of premises and records of Sub Agents to
be directed at least once in a month and in a year respectively.
Renewal of authorization of existing Agents:
The application should fulfil norms for entry as above. An application
for the renewal shall be made not later than one month, before the expiry of
the permission.
Permission will be issued initially for a period of one year. It can
be renewed for 1 to 3 years at a time.
Inspection of Indian Agents:
Inspections may be conducted by RBI under Section 12(1) of FEMA, 1999.
KYC/AML/CFT Guidelines for the Indian Agents:
Indian agents are to allow KYC norms/ Anti-Money Laundering (AML)
standards/ Combating the Financing of Terrorism (CFT).
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