Money changer fraud: check RBI authorisation first

In India only an RBI Authorised Person may buy or sell foreign currency. That means an Authorised Dealer Category-I bank, an Authorised Dealer Category-II, or a Full Fledged Money Changer licensed under Section 10 of the Foreign Exchange Management Act 1999. Anyone else who offers to change your money is trading illegally, and you will have almost no regulatory remedy if they cheat you. Three checks at the counter prevent most of it.

Short on time? Go to the escalation ladder below. It forks depending on whether you dealt with a bank or a standalone money changer, and most advice online gets that fork wrong.

1. The licence on the wall. The RBI Master Direction requires an FFMC or non-bank AD Category-II to display “at a prominent place in or near the public counter, a copy of the money changing licence issued by Reserve Bank of India”. If you cannot see it, ask. A counter that will not show its licence is the loudest warning sign there is.
2. The rate chart at the counter. Authorised Persons must display a chart of purchase and sale rates “for all the major currencies” near the public counter, updated “latest by 10:30 a.m.” No chart means no fixed public reference, which is the gap a cheat works in.
3. The name on the RBI list. RBI publishes a live list of Full Fledged Money Changers and a separate list of cancelled FFMC licences. Check both. A firm appearing only on the cancelled list is trading on a dead licence.

Do all three at airports too, where travellers are most rushed.

• No printed bill, or a slip with no firm name and no licence number.
• No exchange rate chart displayed at or near the public counter.
• A “service charge” or “airport convenience fee” mentioned only after you agreed the rate.
• Refusal to issue an encashment certificate when you sell foreign currency notes.
• “Cash only, no bill” when you are buying foreign exchange worth Rs 50,000 or more. Cash is not permitted at that level.
• Staff suggesting the transaction be split into smaller bills. That is structuring, and RBI requires the counter's own auditors to hunt for it.
• A kiosk offering to sell you currency while displaying a franchisee board. Franchisees may only buy.

One honest caution, because most pages get this wrong. A bad rate is not by itself illegal. The Master Direction lets Authorised Persons transact “at market determined exchange rates”, so there is no RBI-fixed retail rate you can demand. The enforceable wrongs are the missing chart, the missing bill, the charge added after the fact, and the missing licence. Build your complaint on those, not on “the rate was unfair”.

The Master Direction states flatly that “money changing business can only be undertaken by entities authorised by the Reserve Bank under Section 10 of the Foreign Exchange Management Act, 1999 and any person found undertaking money changing business without a valid licence is liable to be penalised under the Act”.

A franchisee must “display the names of their franchisers, exchange rates and that they are authorised only to purchase foreign currency”, so a franchisee board over a counter selling you dollars is a contradiction. The model is also being wound up: no Authorised Person may enter fresh franchisee arrangements, and existing ones must end “in any case within two years from May 6, 2026”.

An FFMC needs Net Owned Funds of at least Rs 25,00,000 for a single branch or Rs 50,00,000 for multiple branches, a franchisee Rs 10,00,000. These are entry thresholds, not a compensation pool.

1. Note the exact legal name on the licence copy or the bill, not the shop signage. The two often differ.
2. Open the RBI list of Full Fledged Money Changers, pick the region, open the PDF and search the name.
3. Cross-check the list of cancelled FFMC licences.
4. If the counter claims to be a franchisee, check the RBI franchisee list.
5. If the lists do not settle it, ask the RBI Foreign Exchange Department regional office for that city and keep the reply.

• A cash memo. Authorised Persons “shall issue a cash memo, if asked for, on official letterhead” to travellers they sell currency to. Those three words matter. Ask, every time, before you pay.
• An encashment certificate. When you sell currency, Authorised Persons “may issue certificate of encashment when asked for”, on letterhead with an authorised signature. At counters between the Immigration and Customs desks at Indian international airports the rule is stronger: they may only buy foreign currency and sell rupees, and encashment certificates “shall invariably be issued”.
• Limits on cash paid to you. Selling notes, a resident may be paid cash only up to USD 1,000 or equivalent per transaction, a foreign visitor or NRI up to USD 3,000. Above that it must come through the banking channel, which creates a paper trail in your favour.
• Limits on cash you pay. Cash is allowed only below Rs 50,000 when buying foreign exchange for travel. At Rs 50,000 and above, payment must be by crossed cheque, demand draft or electronic transfer.
• An audited counter. FFMCs must run concurrent audit, and the scope expressly includes “cases of structuring of transactions into a series of cash transactions below INR 50000”.

One rule often misquoted as a consumer protection is not one. Since 1 July 2024, notes sold to the public by FFMCs and non-bank ADs Category-II must be at least 75 per cent of the value of notes they bought from other FFMCs and ADs each quarter. That is an anti-hoarding ratio between wholesale buying and retail selling, and it gives you no individual right.

On arrival, foreign exchange may be brought in without limit if declared on the Currency Declaration Form to Customs. Declaration is not required where notes plus travellers cheques do not exceed USD 10,000, or notes alone do not exceed USD 5,000. If you did file a CDF, you must produce it when you tender that currency for exchange.

1. Complain in writing to the entity itself, same day if you can, to the branch and the head office. Give the date, time, counter, amount, rate quoted and rate applied, and demand the cash memo or encashment certificate that was refused. Keep proof of sending.
2. If your counterparty was a bank or an AD Category-I branch, use the RBI Ombudsman. File at cms.rbi.org.in after 30 days from your complaint to the bank, and within 90 days of that deadline expiring or of the bank's last reply. The Ombudsman can award up to Rs 30,00,000 for consequential loss, plus up to Rs 3,00,000 for time, expenses and harassment. The RBI helpline is 14448.
3. If it was a standalone FFMC, an AD Category-II or a franchisee, the Ombudsman route is closed. The Reserve Bank Integrated Ombudsman Scheme 2026, which replaced the 2021 scheme from 1 July 2026, covers only banks, certain NBFCs, non-bank prepaid payment instrument issuers and credit information companies. Money changers are not on that list, and RBI treats such complaints as not maintainable. Write instead to the RBI Foreign Exchange Department regional office for that city and to RBI's Consumer Education and Protection Cell, citing the Master Direction paragraph breached.
4. File a consumer complaint. Refusing a bill, hiding a charge or misapplying an agreed rate is deficiency in service under the Consumer Protection Act 2019. A District Consumer Disputes Redressal Commission handles claims up to Rs 50,00,000, which covers any counter transaction. Start with the National Consumer Helpline on 1915 or consumerhelpline.gov.in.
5. Go to the police for outright fraud. If the entity was never authorised, or took your money and gave nothing, that is cheating, not a service dispute. File an FIR, and report online deals at cybercrime.gov.in. Unlicensed money changing is itself penalised under FEMA.

Do not skip rung one. Steps two and four need proof you approached the business first.

RBI is a public authority under the RTI Act 2005, so you can ask what it actually did about your complaint. Send a Section 6 application to the Central Public Information Officer of the RBI regional office you wrote to, with the Rs 10 fee. Ask narrow, record-based questions:

• The authorisation status of the named entity as a money changer under Section 10 of FEMA, and the date of its last licence renewal.
• Whether it appears in the list of cancelled FFMC licences, with the date and reason recorded.
• The action taken on your complaint reference, with dates of correspondence and the file noting recording the decision.
• The number of complaints received against that entity in the last three financial years.

Keep the questions to the action taken on your own complaint and to public licensing status. RBI resists questions straying into an entity's confidential commercial information by invoking Section 8 exemptions, so do not frame it that way. If the 30 day deadline passes or the reply is evasive, file a first appeal. The RTI drafting tool structures the application, the first appeal builder handles escalation, and the PIO directory helps you address it. The RTI Playbook shows how to phrase questions so they cannot be dismissed as opinion, and the RTI Act guide covers exemptions.

• The cash memo or bill, showing entity name, rate applied and total.
• The encashment certificate, if you sold currency.
• A photograph of the rate chart and licence copy, time visible.
• Your bank or card statement showing what left your account.
• Your Currency Declaration Form, if you filed one.
• The written complaint you sent, and proof of delivery.

Photograph the rate chart before you transact. Once a dispute starts, the chart tends to change.

Largely yes. RBI does not fix retail rates, and the Master Direction permits transactions “at market determined exchange rates”. What the counter may not do is hide the rate, skip the displayed chart, or add a charge you were not told about. Compare counters and confirm the all-in rupee total before paying.

Ask for the cash memo immediately, which forces the charge onto paper. An undisclosed charge added after agreement is deficiency in service under the Consumer Protection Act 2019. Complain in writing to the entity first, then to the RBI regional office and the consumer commission.

Only if your counterparty was a bank or an AD Category-I branch. The Reserve Bank Integrated Ombudsman Scheme 2026 covers banks, certain NBFCs, non-bank prepaid payment instrument issuers and credit information companies. A standalone FFMC or AD Category-II is not covered, and RBI treats such complaints as not maintainable. For those, use the RBI Foreign Exchange Department regional office and the consumer commission.

You may bring in foreign exchange without limit if you declare it on the Currency Declaration Form to Customs on arrival. Declaration is not required where notes plus travellers cheques do not exceed USD 10,000 or equivalent, or notes alone do not exceed USD 5,000. If you did declare, you must produce the CDF when you exchange that currency.

At counters between the Immigration and Customs desks at Indian international airports, no. Those counters may only buy foreign currency and sell rupees, and encashment certificates “shall invariably be issued”. At an ordinary counter the certificate comes “when asked for”, so ask before you complete the transaction.

A resident may be paid cash up to USD 1,000 or equivalent per transaction. A foreign visitor or NRI, up to USD 3,000. Anything above must go through the banking channel. A counter offering to pay a large amount entirely in cash is breaking the rule, and you lose your paper trail.

• Photograph your bill, the rate chart and the licence copy if you are still near the counter.
• Search the entity name on the RBI FFMC list and the cancelled list.
• Write a dated complaint to the branch and head office, naming the amount and both rates.
• Pick your fork: a bank means the RBI complaint portal, a money changer means the RBI regional office plus the consumer commission.
• If nothing was authorised at all, draft the FIR complaint tonight.

• RBI Master Direction on Money Changing Activities, updated 24 June 2026
• RBI FAQs on the Integrated Ombudsman Scheme 2026
• NCDRC on consumer commission pecuniary jurisdiction

• Forex trading scams in India, a different problem from the counter transaction here.
• Is forex trading legal in India.
• When a bank refuses your outward remittance.
• Practical guides index.