Other than banks and financial institutions some other firms, hotels and organizations are alsopermitted to deal in foreign currency transactions in notes, coins and traveler’s cheques from the Reserve Bank. These organizations and firms are called as “Authorized Money Changers”. An authorized money changer may be a “full-fledged money changer” or a “restricted money changer”.
The Money Changer who undertakes both purchase of foreign exchange and sale transactions with the public for private and business visits abroad is known as full-fledged money changer which is authorized by Reserve Bank of India. Urban co-operative banks, departments of posts and others are recognized as full-fledged moneychangers.
A restricted money changer is authorized only to purchase foreign currency notes, coins and traveler’s cheques. The system of approval of restricted moneychangers by Reserve Bank has been discontinued. Now, an authorized dealers and full-fledged moneychangers can enter into agency or franchise agreements with entities for the purpose of carrying on restricted money changing business.