Money
The central bank has updated guidelines for Authorised Dealers handling Form A2, allowing delegated management committees to approve internal operational frameworks.
Key points
- RBI issued A.P. (DIR Series) Circular No. 23 on October 1, 2026.
- Authorised Dealers can now use a Board Committee or Management Committee for internal guidelines.
- Updates apply to the online submission of Form A2 for outward foreign exchange remittances.
- All instructions from the July 2024 circular remain otherwise unchanged.
The Reserve Bank of India (RBI) has issued a fresh circular easing the governance framework for banks and financial institutions handling international money transfers. Under the new directive, Authorised Dealers (ADs) can now establish internal operational guidelines for processing outward forex remittances through delegated management committees rather than strictly requiring full board approvals. The updated norms apply directly to the handling of Form A2 submissions by category I banks and category II entities.
According to the notification signed by Chief General Manager N. Senthil Kumar, the central bank reviewed earlier instructions from July 2024. While banks previously needed direct board-level authorization to frame internal rules for Form A2 processing, the latest directive permits boards to delegate these powers to a designated Board Committee or Management Committee. The move is designed to operationalise cross-border capital flows more efficiently while maintaining necessary compliance standards under the Foreign Exchange Management Act (FEMA) of 1999.
What this means for investors
For individuals and institutional investors executing international transactions, this regulatory update streamlines the administrative bottleneck at commercial banks. While the underlying limits and compliance checks for foreign transfers remain governed by existing statutes, the internal agility of banks to clear paperwork can reduce processing delays for outward investments.
Changes in foreign exchange handling processes can occasionally influence transaction speeds for global capital movements, which ultimately feed into broader metrics like the USD to INR rate dynamics and overall liquidity flows. Investors engaged in overseas portfolio diversification or foreign asset allocation should verify specific documentary requirements with their respective AD banks as internal compliance policies are updated.
Frequently asked questions
What is Form A2 used for? Form A2 is a mandatory declaration form required by Authorised Dealers in India when a resident undertakes outward foreign exchange remittances for various permitted current or capital account transactions.
Does this circular change remittance limits? No. The circular modifies who within an Authorised Dealer bank can approve internal operating guidelines, rather than altering statutory limits on individual or corporate foreign remittances.
This article is for information only and is not investment advice. Do your own research or consult a licensed adviser before investing.
Based on information published by Reserve Bank of India (RBI) — notifications. Source: Reserve Bank of India (RBI) — notifications. Spotted an error? corrections@moneypuran.com
