Introduction
The Reserve Bank of India, vide A.P. (DIR Series) Circular No. 17 dated June 24, 2026 (RBI/2026-27/174), has rationalised certain reporting requirements and prescribed / modified reporting formats under the Foreign Exchange Management Act, 1999 (FEMA). This circular has been issued pursuant to the Foreign Exchange Management (Authorised Persons) Regulations, 2026, and is addressed to all Authorised Persons.
The Master Directions on Money Changing Activities and Reporting under FEMA are being updated separately to reflect the changes introduced by this circular.
Key Changes Introduced
1. Revised Format of FLM-8
The format of FLM-8 (Statement of purchases and sales of foreign currency notes) has been revised to additionally capture details relating to write-off of foreign currency notes.
Significantly, the requirement of obtaining prior approval of the Reserve Bank for write-off of foreign currency notes exceeding USD 2,000 has been discontinued.
Entities maintaining Nostro accounts and reporting the relevant transactions through FETERS shall not be required to submit FLM-8 returns.
2. Franchisee List Submission
Authorised Persons having franchisee arrangements shall submit a list of such arrangements within 15 days from the end of each calendar quarter.
3. MTSS Sub-Agent List
Indian Agents under the Money Transfer Service Scheme (MTSS) shall submit the list of Sub-Agents on a quarterly basis, within 15 days from the end of each calendar quarter.
Returns / Instructions Discontinued
The following returns and requirements have been discontinued with immediate effect:
(i) Prescribed formats of registers FLM-1 to FLM-7 under the Master Direction on Reporting under FEMA. However, FFMCs and Non-bank AD Category-II entities shall continue to maintain complete and accurate records of all foreign exchange transactions undertaken by them and shall make such records available to the Reserve Bank for inspection / supervisory purposes, as and when required.
(ii) Return titled "Quarterly Statement showing summation of Foreign Currency Account opened in India out of export proceeds of Foreign Currency Notes / encashed Travellers' Cheques."
(iii) Requirement for submission of a separate List of Additional Locations under MTSS and the requirement of quarterly confirmation regarding the veracity of the list published on the Reserve Bank's website.
(iv) Return relating to Statement of Collateral under MTSS. Indian Agents shall, however, continue to ensure adequacy of collateral in terms of extant instructions.
Revised Return Format
The Annex to the circular prescribes the revised format of FLM-8, which captures the following:
- Opening Balance
- Purchases — from Public, through Franchisees / FxCs, from AD Banks, from other FFMCs / Non-bank ADs, and Imports
- Sales — to Public, through FxCs, to AD Banks, to other FFMCs / Non-bank ADs, and Exports
- Foreign Currency Notes Written-off
- Closing Balance
The format captures currency-wise data across USD, GBP, EUR, JPY, and other currencies, along with purpose-code-wise purchases / sales to the public during the month.
Legal Basis
The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to any other permissions / approvals required under any other law.
Applicability
This circular is applicable to:
- Full Fledged Money Changers (FFMCs)
- Non-bank AD Category-II entities
- Indian Agents under MTSS
- All Authorised Persons under FEMA
Our View
The rationalisation of FEMA reporting requirements is a welcome step towards reducing compliance burden on Authorised Persons. The discontinuation of FLM-1 to FLM-7 formats and the removal of the prior approval requirement for write-off of foreign currency notes exceeding USD 2,000 are particularly significant reliefs. Entities should, however, note that record-keeping obligations continue unaffected and collateral adequacy requirements under MTSS remain in force.
Source: RBI A.P. (DIR Series) Circular No. 17 dated June 24, 2026 | RBI/2026-27/174
Disclaimer: This post is for informational purposes only and does not constitute legal or professional advice. Readers are advised to refer to the original circular and consult a professional for specific guidance.
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