Full Fledged Money Changers
Full Fledged Money Changers (FFMC), is an authorized money changer under section 10 (1) of the Foreign Exchange Management Act, engaged in foreign exchange or foreign security. However, under this act, any person or any entity which is willing to start and FFMC business are required to obtain the FFMC registration with RBI. A person or entity failing to register its business will be liable to hefty penalties.
What is the FFMC License?
With FFMC License, the company willing to undertake the business of the money exchange or Forex Currency Exchange gets a permit from RBI to run such business. According to section 10 of the Foreign Exchange Management Act of 1999, entities have to register itself with RBI to be an Authorized Money Changer (AMC). The objective behind allowing FFMCs business is to widen the access to foreign exchange facilities to residents and tourists while ensuring efficient customer service through competition.
Eligibility for License
The eligibility criteria for applying the FFMC License is that the entity has to be registered under Companies act, 1956/Companies act 2013. Besides, the company should have minimum net owned funds of INR 25 lakh to apply for a single branch, and for multiple branches, INR 50 lakh are required to apply for the FFMC License. Other Eligibility criteria areas;
- No criminal record is pending against the Entity with the enforcement of the department of revenue intelligence.
- The object clause of memorandum must clearly state the activity undertaken by the entity as a money exchange.
- The entity must carry out the business within six months after acquiring the license.
Types of FFMC
For a company to operate as FFMC following types of FFMCs are needs to be acquired;
- Authorised Dealer Category-I (AD Category I)
- Authorised Dealer Category – II (AD category II)
- Full Fledged Money Changer (FFMC)
Documents Required for FFMC License
For Obtaining FFMC License following documents are required;
- A copy of Incorporation certificate of Entity
- The memorandum of association and memorandum of an article comprising a provision for carrying money exchange business.
- Copy of the latest audited accounts Copies of the audited Balance Sheet and Profit & Loss Account of the company for the last three years certified by the statutory auditor.
- A sealed, covered confidential report from applicant Banker.
- A declaration is providing information related that no criminal cases are initiated /pending, with the Directorate of Enforcement (DoE) / Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities against the applicant entity and the directors.
- Provide all the detail in relation to the sister or associated entities dealing in the financial sector, for example – NBFC.
- A certified Board Resolution consists of the information of money exchange-related business.
Activities of FFMC
An authorized FFMC can carry out the following activities;
- An authorized FFMC can go into a Franchise agreement for undertaking the restricted money exchanging business which includes the conversion of coins, traveller's cheque, and foreign currency to Indian Currency.
- An FFMC is also allowed to sell Indian Currency to foreign visitors or tourists against their International credit/debit cards.
- An FFMC or their franchises are allowed to buy any coins or ant traveller's cheques or foreign currency.
- An FFMC is allowed to sell foreign exchange for the purpose of;
• Private Visits
• Business Visits
• Forex prepaid cards
Process of Obtaining FFMC License
- Application in prescribed format along with all the required documents should be submitted to the respective regional office of Foreign Exchange Department of RBI
- The director of the applicant Company would be reviewed under ‘fit and Proper’ criteria by RBI. If everything goes well than FFMC license will be issued within 2 to 4 months.
- Clearance by Empowered committee is required to be received
- The decision of RBI in the subject to granting or revoking the license will be considered as final and bidding upon the applicant.