Rupee Drawing Arrangement (RDA) is a type of method through which money can be received from Overseas in the form of remittance. For Trade purposes trade can be done up to a certain limit. And only authorized dealer and certain banks who got permission from RBI can only transact money.However, there is no limit to transfer money in the account of an individual in RDA. Cash remittance is not allowed in RDA.

From the perspective of RBI, these two are slightly different-

Inward Remittance through MTSS is done through a Fund transfer services outside India, who work by coordinating authorized agents in India. Funds cannot be transferred for Trade purposes or for charity donations this way.

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

Under MTSS cash remittance is allowed but only is limited to Rs. 50,000/-, where transaction is more than this amount then it should be paid in the form of cheque, Demand Draft etc. whereas in case of Foreign tourist more than Rs. 50,000/- is allowed in cash via MTSS.

Under MTSS RBI grants permission to any person to act as an Indian Agent as per section 10(1) of the Foreign Exchange Management Act (FEMA), 1999. Unless RBI has granted the person, no person can handle the business of cross-border money transfer to India.

In order to become an Indian Agent, one should be Full Fledged money changer, Authorized dealer category-1 Bank, Authorized Dealer Category-II Bank or a scheduled commercial banks or Department of Posts.

For an Applicant, there is requirement of minimum net owned funds of Rs. 50 Lakhs.

An application is required to be filled by an Applicant and it is to be filed with reserve Bank of India (Foreign Exchange Department) under whose jurisdiction the registered office of the Applicant is situated.

1)The declaration is required to be submitted regarding no proceedings have been initiated or pending against the applicant and its Director, before the Directorate of Enforcement/ Directorate of Revenue intelligence or any other law enforcing authorities.

2)A declaration regarding the proper policy framework has been framed in respect of KYC/ AML/ CFT in accordance with the guidelines issued by the Reserve Bank of India.

3)Details as such name and address of the registered entity (Overseas Principal) with whom an Indian Agent will enter into an agreement under MTSS.

4)By the Overseas principal, complete details of the operation of the scheme.

5)Details of Branches in India where MTSS will be conducted by the applicant.

6)Under the scheme estimated volume of business per month/year.

7)Audited Financial statement of the applicant of the last to years, if available otherwise copy of the latest audited accounts along with a certified copy of Net Owned Funds from the statutory auditor as on the date of Application.

8)Copy of MOA and AOA of the applicant where there is provision regarding the money transfer business or make appropriate amendment in the Object of the Company.

9)Confidential report in a sealed cover from at least two of the applicant’s banker.

10)Details of sister concern or associated cancer of the applicant regarding the money transfer business.

11)A letter from the proposed overseas Principal who agrees to enter into an agreement with an applicant and also to provide necessary collateral.

Following are the Documents which are required to be submitted in case of Overseas Principal-

1)It is required to obtain prior permission of the department of payment and settlement systems, Reserve bank of india under the provisions of the Payment and settlement system act (PSS) Act, 2007 to operate a payment system by the overseas principle.

2)The overseas entity should be a registered entity with the Central Bank/ Government or financial regulatory authority concerned for carrying on Money Transfer Activities.

3)There should be minimum net worth of at least US $ 1 million of the registered entity.

4)They should be registered with overseas Trade/ Industry Bodies.

5)He should have obtained a good rating from one of the international credit rating agencies.

6)A confidential report has to be submitted from at least two of its bakers.

7)A certified report should be submitted by independent chartered accountant on the subject of initiation to comply with anti money laundering norms in the home/host country.

8)It will be full responsibility of the overseas principal regarding the activities of their agents and sub agents in india.

1) For the remittance of money, remitter has to visit Moneygram Location or Western Union Money transfer outlet in such country hre the country is operational. Then the form is required to be filled with the fees as required along with the additional charges applicable.

2)The remnitter has to inform payee regarding the deposit. After payee has to visit the Post office to fill the necessary form and to display identification documents for verification.

3)Thereafter MTCN is required to be given to an officer who verifies from the transaction record.

After the verification of payee, money is transferred in payee’s bank in Indian Currency.

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Under MTSS, there is a Cap of 2500 USD in case of individual remittances. Besides this maximum 30 transactions are allowed in MTSS.

Yes, cash remittance is allowed but only upto Rs. 50,000/-.

To become an agent, one should be Full Fledged money changer, Authorized dealer category-1 Bank, Authorized Dealer Category-II Bank or a scheduled commercial banks or Department of Posts.