RBI Keeps Top-Tier Forex Dealing in Banks’ Hands, Not NBFCs
RBI’s new forex rules lock AD Category-I licences to banks, while opening lower tiers to non-banks under tighter caps, turnover rules and supervision.
The Reserve Bank of India has chosen control over liberalisation in the foreign-exchange market. In its new Foreign Exchange Management (Authorised Persons) Regulations, 2026, the central bank explicitly rejected industry demands to let non-banks hold Authorised Dealer Category-I licences — the top tier that carries full current- and capital-account powers — and kept that lane for banks only, according to 
Mint and 
PTI via NewsDrum.
RBI is widening access, but only at the edges
The signal here is not that RBI is closing the market. It is widening participation, but on terms it can police. Under the new framework, banks remain the only entities eligible for AD Category-I, while NBFCs, established money changers and forex correspondents can apply for lower categories, subject to turnover and net-worth thresholds, PTI via NewsDrum reported. 
Business Standard said the regulations took effect on April 30.
That architecture matters. AD Category-I is not just another licence; it is the gateway to the most sensitive FX business. By keeping that with banks, RBI preserves a cleaner prudential chain of command over settlement risk, compliance, and capital-account exposure. Non-banks can still deepen their role, but they do so in a narrower box.
Who wins, who loses
The immediate winners are banks, especially the large ones that already dominate corporate FX flows and correspondent relationships. They keep the highest-value business and the regulatory moat that comes with it. The losers are NBFCs, fintech-linked forex firms and other non-bank players that had hoped the central bank might open a route into top-tier dealing. Mint said the industry’s proposal for non-bank AD Category-I access was expressly declined.
There is a second-order beneficiary: the RBI itself. The new rules also tighten entry standards, with fresh authorisation tied to incorporation under the Companies Act, defined forex objectives in the memorandum, and minimum net-worth thresholds for lower categories, 
CNBC TV18 reported. CNBC TV18 added that the RBI will not entertain fresh Full-Fledged Money Changer licences, will phase out the franchisee model in favour of Forex Correspondents, and has capped AD Category-II trade transactions at ₹25 lakh per deal.
That combination tells you the policy priority: reduce fragmentation, not expand risk. For 
India, where foreign-exchange access sits at the intersection of trade, remittances and capital controls, the RBI is trying to modernise distribution without giving up the core gatekeeping function.
What to watch next
Watch for two things. First, whether non-bank players push back through industry associations or via narrower licences under AD Category-II and Category-III. Second, whether the RBI uses the new Forex Correspondent model to channel more retail FX activity through bank-led networks rather than standalone money changers. The real test is implementation: who gets approved, how fast existing franchisees are wound down, and whether the lower-tier authorisation rules become a genuine on-ramp or just a compliance filter.
For policymakers, the message is clear: RBI is willing to broaden access to forex services, but not to dilute bank primacy in the most powerful licence class.
