RBI Circulars 17 & 18 (June 2026): FEMA reporting changes for money changers
On 24 June 2026, the RBI issued two A.P. (DIR Series) Circulars that reduce FEMA reporting burden for Authorised Persons and money transfer agents. Circular 17 discontinues prior approval for foreign currency note write-offs and de-formalises prescribed register formats; Circular 18 withdraws obsolete directives. Here's what changed and who it affects.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 — Effective: 24 June 2026. Source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13550&Mode=0 and https://www.rbi-ecb-filings)).org.in/Scripts/NotificationUser.aspx?Id=13551&Mode=0. Last reviewed by CA Harun Raaj: August 2026.
On 24 June 2026, the Reserve Bank of India issued two A.P. (DIR Series) Circulars — No. 17 (RBI/2026-27/174) and No. 18 (RBI/2026-27/175) — that reduce FEMA reporting compliance burden for Authorised Persons and practitioners. Neither is a headline reform, but both matter if you operate as an AD bank, Full-Fledged Money Changer (FFMC), or Money Transfer Service Scheme (MTSS) agent, or if you advise on foreign exchange compliance.
Key point: Circular 17 removes prior RBI approval requirements for foreign currency note write-offs and discontinues prescribed register formats; Circular 18 consolidates by withdrawing obsolete circulars.
Circular 17: What FEMA returns and registers change
RBI/2026-27/174, A.P. (DIR Series) Circular No. 17, dated 24 June 2026, modifies prescribed returns and register requirements for money changers and MTSS agents.
Discontinuations affecting FEMA reporting:
- Prior approval for FC note write-off abolished: The requirement to obtain Reserve Bank approval for write-off of foreign currency notes exceeding USD 2,000 is discontinued. Instead, these write-offs are now captured in the FLM-8 return without pre-approval.
- Register formats de-formalised: The prescribed formats of FLM-1 to FLM-7 are discontinued. Authorised Persons must still maintain the underlying records for RBI inspection — only the fixed-format requirement is withdrawn.
- Specific returns discontinued: the Quarterly Statement showing summation of Foreign Currency Account opened out of export proceeds of FX Notes / encashed Travellers' Cheques is withdrawn. Under the MTSS, the separate List of Additional Locations return and Statement of Collateral return are also discontinued.
- What remains mandatory (quarterly): Lists of franchisee arrangements and Sub-Agents must still be submitted within 15 days of the end of each calendar quarter.
Who this affects: Authorised Dealers (AD banks), Full-Fledged Money Changers, and MTSS agents. This does not change FC-GPR, FC-TRS, FLA, or APR filings for companies receiving FDI or making overseas investment.
Circular 18: Withdrawal of obsolete circulars
RBI/2026-27/175, A.P. (DIR Series) Circular No. 18, dated 24 June 2026, issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999, withdraws directives issued since 1 June 2000 that have become redundant, overlapping, or superseded.
RBI states the withdrawn circulars "have ceased to be operative owing to subsequent regulatory amendments, redundancy, overlap or supersession by newer directives."
This is a consolidation exercise, not a substantive law change. Critical takeaway: withdrawn circulars lose authority in compounding applications, AD-bank queries, and compliance opinions. Practitioners must align their citation library to current Master Directions instead.
Comparison: returns and timelines before and after Circular 17
Practical action steps
For money changers and MTSS agents:
- Remove the following from your compliance calendar: Quarterly FCA statement, List of Additional Locations (MTSS), and Statement of Collateral (MTSS).
- Record foreign currency note write-offs in FLM-8 going forward; cease requesting prior RBI approval for write-offs above USD 2,000.
- Simplify your register maintenance — the prescribed formats FLM-1 to FLM-7 no longer apply, but retain complete underlying records for inspection.
- Submit franchisee arrangements list and Sub-Agents list within 15 days of the end of each calendar quarter (31 March, 30 June, 30 September, 31 December deadline windows).
For tax and compliance practitioners:
- Audit your FEMA advisory library and compliance checklists against the Annex of Circular 18; retire citations to withdrawn circulars.
- Reference the RBI Master Directions instead when advising AD banks, FFMCs, or MTSS operators.
- Confirm your client's reporting obligations do not overlap with the discontinued returns.
For companies with FDI or overseas investment:
- No change to FC-GPR, FC-TRS, FLA, or APR filing timelines or substance.
- FLA return remains due 15 July each year; APR for overseas investment due 31 December.
I'm CA Harun Raaj, Visakhapatnam. If your business operates as a money changer, MTSS agent, or AD bank, or if you advise on FEMA compliance, reach out to discuss how these changes apply to your reporting calendar.
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See Also
Frequently Asked Questions
Do RBI Circulars 17 and 18 affect FC-GPR or FLA filing?+
No. Circulars 17 and 18 do not modify FC-GPR, FC-TRS, the FLA annual return (due 15 July), or APR requirements. They apply only to money-changer and MTSS-agent returns, and to the consolidation of obsolete circulars.
Can a Full-Fledged Money Changer now write off foreign currency notes above USD 2,000 without RBI approval?+
Yes. Circular 17 discontinues the prior RBI approval requirement for write-off of foreign currency notes exceeding USD 2,000. The write-off detail is instead captured in the FLM-8 return.
Are the FLM-1 to FLM-7 registers abolished under Circular 17?+
The prescribed fixed formats of FLM-1 to FLM-7 are discontinued. However, Authorised Persons must still maintain the underlying records for RBI inspection — only the format requirement is removed.
What quarterly returns must MTSS agents still file after 24 June 2026?+
MTSS agents must continue to submit franchisee arrangements lists and Sub-Agents lists within 15 days of the end of each calendar quarter. The List of Additional Locations and Statement of Collateral returns are discontinued.
When must the quarterly franchisee and sub-agent lists be submitted under Circular 17?+
Both the franchisee arrangements list and Sub-Agents list must be submitted **within 15 days of the end of each calendar quarter** — meaning by 15 April, 15 July, 15 October, and 15 January respectively.
What happens to circulars withdrawn by RBI A.P. (DIR Series) Circular No. 18?+
Withdrawn circulars are no longer valid authority for compliance or advice. Practitioners should align citations to current RBI Master Directions and avoid relying on withdrawn circulars in compounding applications or advisory opinions.
Do these June 2026 circulars affect Authorised Dealers (AD banks)?+
Circular 17 affects AD banks that are money changers or operate MTSS schemes; changes apply to their register formats and FC note write-off reporting. Circular 18 is housekeeping and affects all practitioners who cite old A.P. (DIR) circulars.
Is the Quarterly Statement of FCA opened from export proceeds still required?+
No. Circular 17 discontinues the Quarterly Statement showing summation of Foreign Currency Accounts opened out of export proceeds of FX Notes or encashed Travellers' Cheques.
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