MTSS (Money Transfer Service Scheme)

Package Inclusion :

  • Rupee Drawing Arrangement (RDA)
  • Money Transfer Service Scheme (MTSS)

MTSS (Money Transfer Service Scheme)

Indian Agent Registration under Money Transfer Service Scheme

The easiest way of money remittance to India is through Money Transfer Service Scheme. If you're confused about how to send money from foreign country to India through Money Transfer Service Scheme then you're at the right place.

What is MTSS (Money Transfer Service Scheme)?

MTSS (Money Transfer Service Scheme) is the most convenient options for the purpose of inward remittance of money from abroad to India. The facility provided under this scheme can be availed by the tourists traveling to India. By using MTSS facility, money can be transferred to India. However, under MTSS, no outward remittance is permitted. Only Inward remittance in India is allowed. Under this, remittance can be done in a speedy & hassle-free manner.

Why the concept of MTSS (Money Transfer Service Scheme) has been introduced?

The concept of MTSS (Money Transfer Service Scheme) has been introduced as inward remittances contribute to the national income of India as well as it is the biggest source of external financing. With the help of MTSS, cross-border inward remittances can be received by the people through banking and postal channels. However, the most common postal channel which has been used for this purpose is the International Financial System (IFS) platform of Universal Post Union (UPU). Usually, banks are permitted to enter into agreements with other banks for the remittance business.

Besides this, for the purpose of receiving inward remittance, there are two modes

What is the difference between the Rupee Drawing Arrangement (RDA) & Money Transfer Service Scheme (MTSS)?

Rupee Drawing Arrangement (RDA) is a type of method through which money can be received from overseas in the form of remittance. RDA is only limited to individuals however for trade purpose money can be transferred up to a certain limit through RDA. Through this way, only certain AD-I (Authorized Dealer-I) category bank is permitted to transact. For the purpose of money exchange under RDA, authorized exchange houses as their representative in a foreign are used by the authorized banks which are RBI approved. Remitted money is transferred to the bank account of the receiver while no remittance in cash is permitted. Under RDA, there is no limit on the transfer of money to an account of the individual. For the trade purpose, there is an upper limit on money exchange of Rs. 500000. There is no provision of cash remittance under RDA.

These two are slightly different from the perspective of RBI.

Inward remittance through MTSS is done through the fund transfer services outside India, who work by coordinating authorized agents in India. Funds cannot be transferred through this way for trade or charity donations.

There are limits for inward remittance through MTSS which are capped at USD 2,500 per transfer along with this, maximum 30 transfers can be received by a single recipient in one calendar year.

Under MTSS; there is an allowance for cash remittance. Currently, for cash remittance, there is a limit of Rs. 50000 and in case of amount more than this; it will be paid via cheque, demand draft, etc. Whereas in case of foreign tourist more than Rs. 50000 is allowed in cash via MTSS.

Who can carry the business of money transfer to India?

Under the MMTS (Money Transfer Service Scheme), Reserve Bank of India may grant permission to any person to act as an Indian Agent as per Section 10(1) of the Foreign Exchange Management Act (FEMA), 1999. Unless the Reserve Bank of India has granted permission, no person can handle the business of cross-border money transfer to India.

In order to become an Indian agent, an applicant must be Authorized Dealer Category-I bank or an Authorized Dealer Category-II or a Full Fledged Money Changer (FFMC), or a Scheduled Commercial Bank or the Department of Posts.

What is the basic requirement for Indian Agent Registration?

For the applicant, there is a requirement of minimum Net Owned Funds of 50 lakhs.

What is the procedure to file with an application to act as an Indian agent with the Reserve Bank of India?

To act as an Indian agent, an application is required to be filed with the Reserve Bank of India (Foreign Exchange Department) under whose jurisdiction the registered office of the applicant is situated.

For filing application, the following documents are required to be filed

What are the Guidelines for Overseas Principal?

Following documents are required to be submitted by the applicant Indian agent, in respect of their Overseas Principals:

Overseas Principals have to maintain proper records of remitters as also beneficiaries pertaining to all pay-outs in India. On demand to the Reserve Bank or other agencies of the Government of India, Ministry of Finance, Ministry of Home Affairs, FIU-IND, etc, records and full details of the parties should be accessible.

What is the process of sending money to India through MTSS (Money Transfer Service Scheme)?

The process of sending money to India through MTSS is quite simple, which includes the following:

After verification, money is delivered to the payee in Indian currency. In one transaction, remittance of up to 2500 USD is permitted as per the RBI guidelines which cannot be overruled. Only up to the amount 50,000 INR can be paid in cash above this, the amount can be directly deposited in the account or a cheque in the name of the beneficiary.

The process of money remittance to India hardly takes time. In spite of the fact that there is a limit of maximum 30 transactions annually, lots of people are taking benefit of this.

We highly recommend people should apply for this opportunity to become an Indian agent and take the permission of the concerned authority and disburse funds to beneficiaries in India at ongoing exchange rates.




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