The Foreign Exchange Management (Authorised Persons) Regulations, 2026 issued by the Reserve Bank of India introduce a comprehensive framework governing authorisation, eligibility, operations, and compliance requirements for Authorised Persons dealing in foreign exchange under FEMA, 1999. The regulations classify Authorised Persons into AD Category-I, AD Category-II, AD Category-III and Full Fledged Money Changers (FFMCs), prescribe revised eligibility criteria including minimum net worth, turnover thresholds and ‘fit and proper’ requirements for promoters, directors and KMPs, and mandate applications through the PRAVAAH portal. The framework also rationalises the foreign exchange ecosystem by discontinuing fresh FFMC authorisations and prohibiting new franchisee arrangements, while transitioning existing franchisees to the Forex Correspondent (FxC) model within two years. Further, the regulations establish detailed governance norms for Forex Correspondents under a principal-agent structure, introduce ongoing compliance and reporting obligations, provide for
revocation and appeal mechanisms, and strengthen oversight over management changes, outsourcing risks, and operational continuity of authorised entities engaged in foreign exchange activities.
