by Authorized Person
An “Authorized Person” under FEMA, is a person who is authorized by Reserve Bank to deal in Foreign Exchange.
For being registered as an “Authorized Person”, necessary application along with relevant documents has to be furnished to Reserve Bank.
An “Authorized Person” is also, not given a free hand to deal in foreign Exchange. He has to furnish details and information, to Reserve Bank from time to time as may be required by it.
Categories of Authorised Persons under FEMA:
Categories of ‘Authorised Persons’ are as follows:
| Category | Entities | Permitted Activities |
| Authorised Dealer –
Category I |
Commercial Banks, State Co-op Banks, Urban Co-op Banks | All current and capital account transactions as per RBI directions issued from time to time |
| Authorised Dealer-
Category II |
Upgraded FFMCs, Coop Banks, Regional Rural Banks (RRBs), others | Specified non-trade related current account transactions and all activities permitted to FFMC |
| Authorised Dealer –
Category III |
Select Financial and other institutions | Transactions incidental to the foreign exchange |
| Full Fledged Money Changers (FFMC) | Department of Post, Urban Co-op Banks, Other FFMC | Purchase of foreign exchange and sale for private and business visits abroad. |
Currency
“Currency” includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travelers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by the Reserve Bank;
“Currency notes” means and includes cash in the form of coins and bank notes
“Current account transaction” means a transaction other than a capital account transaction and without prejudice to the generality of the foregoing such transaction includes,-
- Payments due in connection with foreign trade, other current business, services, and short-term banking and credit facilities in the ordinary course of business
- Payments due as interest on loans and as net income from investments
- Remittances for living expenses of parents, spouse and children residing abroad
- Expenses in connection with foreign travel, education and medical care of parents, spouse and children
Foreign currency
“Foreign currency” means any currency other than Indian currency;
“Foreign exchange” means foreign currency and includes:
- Deposits, credits and balances payable in any foreign currency
- Drafts, travelers Cheques, letters of credit or bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency,
- Drafts, travelers Cheques, letters of credit or bills of exchange drawn by banks, institutions or persons outside India, but payable in Indian currency
“Foreign security” means any security, in the form of shares, stocks, bonds, debentures or any other instrument denominated or expressed in foreign currency and includes securities expressed in foreign currency, but where redemption or any form of re urn such as interest or dividends is payable in Indian currency;
