RBI allows Urban Cooperative Banks (UCBs) to act as agents/sub-agents under Money Transfer Service Schemes
In September, 2002 Urban Cooperative Banks (UCBs) were prohibited to act as agents/sub-agents under Money Transfer Service Schemes.
Reserve bank of India on 17th july 2007 has announced that UCBs holding AD category I or II category licence may act as agents/sub-agents under Money Transfer Service Schemes which are in conformity with the guidelines issued by our Foreign Exchange Department, subject to the following conditions:
(i) Bank’s adherence to AML/KYC standards should be satisfactory.
(ii) The principal should maintain foreign currency deposits (USD) with the designated bank in favour of the agent which, at present, is equivalent to 3 days’ average payout or USD 50, 000 , whichever is higher.
(iii) Where the UCB is acting as a sub-agent, the agent should also maintain with the designated bank, security deposits equivalent to 3 days’ average payout or Rs 20.00 lakh, whichever is higher, in favour of the UCB sub-agents concerned.
(iv) The UCBs should ensure that the payouts not reimbursed do not, at any point of time, exceed the security deposits placed by the overseas principal /agent, as the case may be.
(v) No UCB should appoint any other UCB/entity as its sub-agent.
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