Reserve Bank of India rationalises FEMA reporting and removes prior approval for foreign currency note write offs above USD 2000

The Reserve Bank of India has issued a circular revising returns and reporting requirements for authorised persons under the Foreign Exchange Management Act, 1999, to align with the Foreign Exchange Management Authorised Persons Regulations, 2026. The changes revise reporting formats, expand the FLM-8 return to capture write-offs of foreign currency notes, and discontinue the need for prior Reserve Bank approval for write-off of foreign currency notes exceeding USD 2000. Authorised Persons with franchisee arrangements must now submit a list of those arrangements within 15 days of each calendar quarter-end, while Indian Agents under the Money Transfer Service Scheme must file quarterly lists of sub-agents within the same timeframe. The circular also withdraws several existing returns and forms. Prescribed formats of registers FLM-1 to FLM-7 are discontinued, although FFMCs and non-bank AD Category-II entities must still maintain complete and accurate records of foreign exchange transactions and provide them for inspection or supervisory purposes when required. It also ends the quarterly statement on foreign currency accounts opened in India out of export proceeds of foreign currency notes or encashed travellers' cheques, the separate MTSS list of additional locations and related quarterly website confirmation, and the MTSS statement of collateral. Indian Agents must, however, continue to ensure collateral remains adequate under existing instructions. In addition, entities maintaining Nostro accounts and reporting the relevant transactions through FETERS will no longer submit FLM-8 returns. The Master Direction on Money Changing Activities and the Master Direction on Reporting under FEMA are being updated separately to reflect these changes.