MONEY TRANSFER SERVICE SCHEME - ALL YOU NEED TO KNOW
Essential for All Upcoming Bank Exams
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 knownas Indian Agents who would disburse funds to beneficiaries in India at ongoing exchange rates. RBI revised the guidelines on 12th March, 2013 on MTSS.
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 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).
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).