On November 13, 2026, the Reserve Bank of India (RBI) issued an Authorised Dealer Category-II (AD-II) licence to Mufin Green Finance Limited. This New Delhi-based company, which operates as a non-banking financial company (NBFC) and is publicly listed on both the National Stock Exchange and Bombay Stock Exchange, can now provide certain foreign exchange services under RBI regulation.
Understanding the AD-II Licence and Its Significance
The AD-II licence permits Mufin Green Finance to conduct a range of foreign exchange activities, primarily focused on remittance services. These include sending money abroad for purposes such as medical treatment, education, and family maintenance. Unlike full-fledged banks with broader foreign exchange powers, AD-II licence holders have a more limited scope, tailored to specific transaction types as defined by RBI guidelines. The licence remains valid indefinitely unless the company chooses to surrender it or the RBI revokes it.
Key Details About the Licence and Regulatory Framework
- Company Profile: Mufin Green Finance Limited is an RBI-regulated NBFC headquartered in New Delhi and listed on NSE and BSE.
- Permitted Transactions: The AD-II licence authorizes the company to handle remittances related to medical expenses, education fees, and family support overseas.
- Regulatory Changes: This licence issuance follows amendments made in May 2026 to the Foreign Exchange Management Act (FEMA), which expanded the eligibility for non-banking entities to obtain AD-II licences for specific foreign exchange transactions.
- Revenue Impact: The new licence is expected to help Mufin Green Finance diversify its income sources by increasing fee-based revenue and reducing dependence on interest income.
- FEMA Provisions: FEMA allows current-account transactions generally, but capital-account transactions require explicit permission. The Liberalised Remittance Scheme under FEMA facilitates easier outward remittances for individuals, including minors and students.
- Authorisation Powers: Section 10(1) of FEMA empowers the RBI to designate entities as authorised dealers or money changers, defining their scope of foreign exchange dealings.
- Difference Between AD-I and AD-II: AD-I banks can handle all current and capital account transactions, while AD-II entities like Mufin Green Finance have a narrower, specified remit.
What This Licence Means for Mufin Green Finance and the Market
Securing the AD-II licence marks a strategic expansion for Mufin Green Finance, enabling it to enter the foreign exchange remittance market under RBI supervision. This move aligns with the RBI’s broader goal of increasing participation of non-banking financial companies in foreign exchange services, thereby fostering competition and innovation. For Mufin, the licence opens new revenue streams through fee-based services, which can stabilize earnings amid fluctuating interest margins. It also positions the company to better serve customers who need to send money abroad for essential needs like education and healthcare.
More broadly, the RBI’s updated framework reflects a regulatory shift to accommodate evolving financial services and to support non-bank entities in contributing to the foreign exchange ecosystem. This could lead to more diversified service offerings and improved access for consumers seeking remittance solutions.
Frequently Asked Questions
Q: What is an Authorised Dealer Category-II licence?
A: It is a licence granted by the RBI that allows non-banking financial companies and other entities to conduct specific foreign exchange transactions, mainly related to remittances for medical, educational, and family maintenance purposes.
Q: How does the AD-II licence differ from AD-I?
A: AD-I licence holders, typically banks, can handle all types of foreign exchange transactions including capital account dealings, while AD-II licence holders have a limited scope focused on certain current account transactions as specified by the RBI.
Q: Why did RBI allow non-banking companies to get AD-II licences?
A: Changes to the Foreign Exchange Management Act in May 2026 enabled this to encourage more players in the foreign exchange market, increase competition, and diversify revenue sources for NBFCs like Mufin Green Finance.
