RBI Proposes Full Disclosure of Forex Transaction Costs for Retail Customers

The Reserve Bank of India has proposed a fresh set of transparency norms aimed at giving retail users clearer visibility into the true cost of foreign exchange transactions.  

The draft circular, released late Tuesday, builds on earlier measures designed to improve pricing clarity in India’s forex market and calls for comprehensive disclosure of all charges associated with forex cash, tom, and spot contracts. 

RBI Proposes Detailed Cost Disclosure 

Under the draft framework, authorised dealers would be obligated to present customers with a complete breakdown of transaction costs before executing any foreign exchange cash, tom, or spot deal.  

This disclosure must outline remittance fees, foreign exchange rates, currency conversion charges, and any sending or receiving fees, including charges levied by intermediaries. The breakdown must also be included in the final deal confirmation. 

The draft specifies that the rule will apply to transactions settled immediately (cash), on the next business day (tom), and in the standard settlement window for spot trades. Feedback on the proposal has been invited until January 9, 2026. 

Builds on Earlier Pricing Transparency Measures 

The proposal follows the RBI’s January 2024 directive requiring authorised dealers to share the mid-market rate or the bid–ask quote with retail users prior to executing any forex or foreign currency interest rate derivative transaction. That earlier move sought to equip consumers with a benchmark reference point before confirming deals. 

The latest draft expands the scope by mandating clear disclosure of every cost component tied to specific forex trades, giving retail users greater clarity over the total amount they pay for currency conversions. 

Read More: RBI Governor Urges Banks to Pass on Rate Cuts to Customers! 

Conclusion 

The draft circular marks a further step in the RBI’s efforts to strengthen transparency in the retail forex market. Once finalised, the rules are expected to provide users with clearer cost visibility and improve decision-making across foreign exchange transactions. 

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