Which bank received approval and Authorised Dealer Category 1 license from the RBI to provide a wide range of foreign exchange services in October 2024?

The correct answer is Ujjivan Small Finance Bank.

Key Points

• Ujjivan Small Finance Bank received the Authorised Dealer Category 1 license from the Reserve Bank of India (RBI) in October 2024.
• This license allows the bank to offer a wide range of foreign exchange services, enhancing its capabilities in international banking.
• The Authorised Dealer (AD) Category 1 license permits banks to conduct transactions related to foreign exchange, including remittances, imports, and exports.
• Ujjivan Small Finance Bank aims to utilize this license to serve its customers better by providing comprehensive forex solutions.
• The move is a significant step towards expanding the bank’s scope of services and strengthening its position in the banking sector.

Additional Information

• Authorised Dealer (AD) Category 1 License:
  • This license is issued by the RBI to banks, allowing them to undertake full-fledged foreign exchange transactions.
  • It includes activities such as remittances, currency exchange, and trade finance for import-export businesses.
  • AD Category 1 banks play a crucial role in facilitating foreign trade and exchange in India.
• Small Finance Banks (SFBs):
  • SFBs are a type of financial institution in India aimed at providing financial services to underserved and unserved sections of the population.
  • They were conceptualized under the RBI’s guidelines to promote financial inclusion.
  • SFBs primarily focus on small business loans, microfinance, and savings accounts for low-income households.
• Foreign Exchange Market in India:
  • The foreign exchange market is regulated by the RBI under the Foreign Exchange Management Act (FEMA), 1999.
  • It facilitates currency exchange and foreign trade transactions crucial for India’s global economic activities.
• Ujjivan Small Finance Bank:
  • Established in 2017, Ujjivan SFB focuses on providing banking services to the underbanked and unbanked population.
  • It offers a wide range of products, including savings accounts, loans, and now, foreign exchange services.
  • Its headquarters is located in Bengaluru, India.