RBI issued Foreign Exchange Management (Authorised Persons) Regulations, 2026 on April 30, 2026, effective immediately. New framework halts fresh licenses for Full-Fledged Money Changers (FFMCs) while rationalizing authorization for forex entities. Three categories established: AD Category I (banks), AD Category II (NBFCs, existing money changers with Rs 50 crore turnover), AD Category III (innovative forex services). Entities must be Companies Act 2013 incorporated with specified minimum net worth requirements.

This regulatory overhaul represents RBI's strategic move to consolidate and modernize India's forex ecosystem. The halt on new FFMC licenses signals a shift toward formal banking channels and established players, reducing fragmentation in the forex market. The three-tier authorization structure creates clear pathways: banks retain primacy (AD-I), while NBFCs and substantial money changers get formal recognition (AD-II). The innovative AD-III category acknowledges fintech disruption in forex services. By mandating Rs 50 crore average annual turnover for AD-II eligibility, RBI ensures only serious players participate. The principal-agent model extension allows broader service delivery while maintaining regulatory oversight. This consolidation aims to improve compliance monitoring, reduce operational risks, and enhance customer protection. For RBI Grade B candidates, this exemplifies modern financial regulation balancing innovation with stability - a key theme in contemporary banking supervision.