Module: General Practice
Q57: [Updated May 2024] Consider the following statements regarding the RBI's May 2024 instructions on foreign currency note transactions by FFMCs and non-bank AD Category-II entities:
I. Entities must ensure that the value of foreign currency notes sold to the public is not less than 75% of the value of foreign currency notes purchased from other FFMCs/ADs.
II. This calculation is to be done on a quarterly basis.
III. The objective is to prevent entities from merely trading inter-bank without serving the general public.
Which of the statements above are correct?
II. This calculation is to be done on a quarterly basis.
III. The objective is to prevent entities from merely trading inter-bank without serving the general public.
Which of the statements above are correct?
✅ Correct Answer: D
1. The New Rule: To curb the practice of FFMCs acting merely as aggregators or wholesale traders without serving retail customers, the RBI mandated that 75% of the currency notes purchased from other ADs/FFMCs must be sold to the public (permitted purposes). 2. Frequency: This compliance is monitored on a Quarterly basis starting July 1, 2024.
3. Objective: The license is granted to "widen access to foreign exchange for residents/tourists" (Public Service), not for speculative inter-bank trading or hoarding.
3. Objective: The license is granted to "widen access to foreign exchange for residents/tourists" (Public Service), not for speculative inter-bank trading or hoarding.