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FFMC License | RBI Full Fledged Money Changer Licence Online

Anyone who wishes to transact in foreign currencies must first get an FFMC licence from the Apex Bank or RBI. The holders of such a licence are permitted to buy foreign currency from NRIs (Non-Resident Indians) and sell it to Indian tourists travelling overseas for business.

It should be mentioned that only an AMC (Authorised Money Changer) is qualified to deal in the activities related to money changing and foreign exchange in accordance with the provisions and requirements of Section 10 of the FEMA 1999.

The RBI has also granted some businesses and hotels a Full Fledged Money Changer Licence to conduct business with foreign currency, traveller's checks, and coins. The same is done to minimise the challenges encountered by visitors and tourists from other countries.

Role of Authorised Money Changers in Forex Transactions

An important part of transactions involving foreign exchange is played by authorised money changers. The Reserve Bank of India(RBI) authorises banks to engage in foreign exchange trading by issuing licences to those institutions. Only banks that are prepared to conduct foreign exchange transactions in India are given the aforementioned licence.

Also to be highlighted is the fact that, in addition to banks, a few other financial entities have been permitted by the central bank to conduct specific kinds of foreign exchange operations that are unrelated to their primary activity.

Benefits of FFMC License

The key benefits of the Full Fledged Money Changer License are as follows:

  • The holder of an AMC licence can offer sale facilities and services for foreign exchange
  • The holder of an FFMC licence can provide encashment certificates for travellers' checks and foreign currency notes from both residents and non-residents;
  • A holder of an FFMC licence may engage in foreign exchange transactions for foreign visitors to India;
  • AMC Licence Holders may handle transactions involving coins, travellers' checks, and foreign currencies at the current exchange rate;

Different Kinds of Full Fledged Money Changer License

The different kinds of Full Fledged Money Changer Licenses are as follows:

  • Authorised Dealer Category I – Banks;
  • Authorised Dealer Category II;
  • FFMCs;

Conditions for Applying for Money Changer License in India

The following requirements must be met to apply for a money changer licence in India:

  • The business entity requesting an FFMC Licence must have been properly incorporated in accordance with the Companies Act 2013's regulations.
  • When operating only one branch, the required minimum NOF (Net Owned Funds) is Rs 25,00,000.
  • When operating numerous branches, the required minimum NOF (Net Owned Funds) is Rs 50,00,000.
  • The Memorandum of Association's (MOA) object clause must take money-changing operations into account;
  • The company must begin operating within six months of receiving an AMC Licence from RBI.
  • The company must not have any open cases with the Department of Revenue Intelligence or Department of Enforcement;

Regulatory Framework for Authorised Money Changer License

Authorised Money Changer Licences may only be issued by the Reserve Bank of India. Additionally, the Apex Bank may establish the following norms and directions for subjects related to AMC Licence:

  • New AMC licence issuance
  • AMC licence renewal  
  • Branch licensing.
  • AML (Anti-Money Laundering) issues 
  • Franchisee or agent appointment approval 
  • KYC (Know Your Customer) issues
  • Guidelines for Authorised Persons; 
  • CFT (Combating of Financing Terrorism) Norms;

What are the RBI Permitted FFMC Activities?

Following are the FFMC Activities that the RBI has approved:

  • To carry out the prohibited money-changing activities, such as the conversion of foreign currency notes and coins, traveller's checks into Indian currency, etc., an AMC or FFMC is qualified to enter into franchise agreements;
  • A person who holds an FFMC Licence may easily buy traveller's checks, foreign currency notes, and coins from both residents and non-residents;
  • AMC licence holders are permitted to exchange Indian currency for international debit and credit cards used by tourists and travellers from other countries. Additionally, the same can take the necessary actions to receive reimbursement through the regular banking channel;

The following uses permit the sale of foreign currency by an FFMC:

  • Private Visits;
  • Business Visits; and
  • Prepaid Cards for Foreign Exchange

Necessary Papers Required for Applying for FFMC License

The following are the necessary papers needed to apply for an FFMC licence:

  • The COI (certificate of incorporation) copy;
  • A copy of the MOA (Memorandum of Association), which contains the pertinent clauses pertaining to the operations of the money-changing business;
  • A copy of the AOA (Articles of Association), which contains the pertinent clauses pertaining to the operations of the money-changing business;
  • A copy of the most recent audited financial statements and the statutory auditors' certifications attesting to the NOF on the application date;
  • A copy of the most recent audited balance sheet;
  • A copy of the Profit and Loss Account for the previous three years;
  • A bank report that is confidentially sealed from the applicant;
  • Information on all related or sibling companies active in the financial market, such as NBFCs;
  • A copy of the Board Resolution adopted for conducting the operations of the money-changing firm that has been officially certified;

Procedure for Obtaining Full Fledged Money Changer License from RBI

The following steps are required to complete the RBI application process for a full-fledged money changer licence:

  • Submit the application to the Reserve Bank of India- The applicant company must submit an application in the required format to the regional office of Apex Bank along with the necessary supporting paper works as the first step of the process. 
  • Fulfil the "fit and proper" requirements -A business must meet Fit and Proper Criteria in order to obtain an Authorised Money Changer Licence from the Reserve Bank of India. As a result, the Board of Directors must go through the Due Diligence process to ensure that the required Fit and Proper criteria are properly met.

In addition, one of the key purposes of the Fit and Proper Criteria is to provide assistance in assessing the knowledge, moral character, credentials, and prior record of the candidate for the position of Director.

Key Requirements of the Fit and Proper Criteria

The Fit and Proper Criteria's main requirements can be summed up as follows:

  • The proposed person must be not older than 70 years old;
  • He or she cannot be a Legislative Assembly member;
  • Must not have a history of fraudulent behaviour;
  • He or she shouldn't hold the office of MP;
  • Should be free of any prior criminal history;
  • Not possess any sanction or authorization from regulatory bodies;

Obtain Authorised Committee Authorization

The directors of the applicant company must get approval from the EC (Empowered Committee) in order to move on to the next phase of the process to obtain an AMC Licence. It should be mentioned, however, that the same will only be dependent on sufficient verification.

Verification by the Reserve Bank of India - Now, the application and supporting materials will be examined by the Reserve Bank of India. If the RBI is satisfied that the application and supporting paper works successfully meet the fit and suitable standards, it will grant the applicant an Authorised Money Changer or FFMC Licence within two to three months.

Starting up business operations - Following the receipt of a Full Fledged Money Changer licence, the business entity is required to launch its commercial operations within six months of the license's issue.

Before beginning business activities, the aforementioned firm must also submit a duplicate copy of the Possession Certificate, Shop and Establishment Licence, and Lease Agreement to the Reserve Bank of India.

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What are the FFMC Licence Post Approval Requirements?

The following are the post-approval registration requirements for a full-fledged money changer licence:

  • Before beginning business activities, the directors of the application company must submit a duplicate copy of the Possession Certificate, Shop and Establishment Licence, and Lease Agreement to the RBI;
  • The licence holder company is required to post a copy of the obtained Money Changer Licence at each location where its registered office is located, and the application company is required to abide by all directions, guidelines and circulars issued by the Apex Bank.
  • The registered licence holder company is required to submit its annual audited balance sheet and the last three years' worth of profit and loss accounts at the regional office of the RBI in order to carry out the activities and operations of forex exchange smoothly and hassle-free.

Franchise Owners' Concept

Multiple intermediaries who have been granted permission by the RBI to immerse in foreign exchange activities are referred to as agents or franchisees.

Additionally, Authorised Dealer Category-I Banks, Authorised Dealer Category-II Banks, and FFMCs may designate their Agents and Franchisees to carry out the activities related to money changing.

The following are some important points to keep in mind in this regard:

  • Any company with a location in India that qualifies as a franchise or agent;
  • A minimum NOF (Net Owned Funds) requirement for such a business company is Rs. 10 lakhs;
  • Franchisees are only permitted to engage in certain restricted money-changing activities;
  • There will be a franchise agreement signed between the parties;
  • Franchisees must prominently display the names of their Franchisers, current exchange rates, and the fact that they are only permitted to buy foreign money in their offices;
  • The foreign currency acquired by a Franchise must be returned to its Franchiser only within a window of seven business days beginning on the day of acquisition;
  • Every franchisee is required to keep accurate transaction records;

Revocation of Authorised Money Changer License

The Reserve Bank of India has the ultimate authority in India to revoke, suspend, or cancel an authorised money changer licence that has been issued. The following circumstances have the same possibility:

  • It should be noted that the Apex Bank reserves the right to modify, change, or revoke any of the current terms, conditions, or regulations regarding AMC Licence in India if an Authorised Money Changer is unable to successfully adhere to the legal requirements of the FEMA Act 1999 and the circulars, guidelines, & directions issued by the RBI.
  • For the interest and benefit of the General Public.

It should also be mentioned that Apex Bank retains the authority to modify, alter, or repeal any of the currently in effect terms, conditions, or rules pertaining to AMC Licence in India.

The procedure for renewing an Indian FFMC licence

The applicant must be a business with a registered office in the territory under the control of the relevant regional office of the Foreign Exchange Department and be registered under the Companies Act, 1956/2013, or the Registration of Companies (Sikkim) Act, 1961.

Renewal applications must be submitted with the below-mentioned necessary papers:

  • A copy of the most recent audited accounts along with a certificate from the statutory auditors attesting to the Net Owned Funds position as of the current date.
  • A confidential report in a sealed cover from the applicant’s banker.
  • A statement to the effect that no legal action has been taken or is pending against the applicant company or its directors by the Directorate of Revenue Intelligence or any other law enforcement agency, as well as no criminal proceedings have been brought against the applicant company or its directors.
  • An FFMC/non-bank AD Category-II must submit a renewal application two months before the license’s expiration date or within any other time frame the Reserve Bank may specify.
  • When a request for a license renewal is made, the current license remains in effect until it is renewed or the request is denied, whichever comes first. After the license has expired, an FFMC/non-bank AD Category-II may not submit a renewal application.

Different Records and Registers are to be maintained by the FFMC licence Holder

An authorised money changer is required to keep the following Registers and Records concerning their money-changing transactions:

Daily Summary and Balance Sheet

The following should be included in the daily summary and balance book:

  • Traveller's checks should be in Form FLM 2 and 
  • Foreign currency notes or coins in Form FLM 1.

Data Register

The following must be made in the data register:

  • Purchase of foreign currency using Form FLM from the general public.
  • Buying foreign currency coins or notes from licenced money changers and submitting Form FLM 4. 
  • The public sale of foreign currency coins or notes on Form FLM 5.
  • The sale of foreign currency traveller's checks on Form FLM 5.
  • Sale of foreign currency notes or coins in Form FLM 6 to approved Full Fledged Money Changers or international banks.
  • Information about the Travellers' Cheques that have been turned in to authorised money dealers, full-service money changers, or exporters in Form FLM 7.

Submission of Balance Sheet and Maintenance of NOF

All FFMCs/non-bank ADs Category-II are demanded to submit their annual audited balance sheet to the relevant Regional office of the Reserve Bank in order to verify their Net Owned Funds. They must also include a certificate from the statutory auditors regarding the NOF as of the balance sheet's date. As FFMCs/non-bank ADs Category-II are expected to maintain the minimum NOF on an ongoing basis, they must notify the Reserve Bank right away of any erosion in their NOF below the minimum level and provide a detailed, time-bound plan for bringing their Net Owned Funds back up to the minimum required level.

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Corpbiz will help you obtain the Full-Fledged Money Changer License. With the assistance of our highly qualified staff, we are dedicated to helping in obtaining the license and advancing your business. You may utilise our knowledge and experience to ensure a smooth and effective payment processing system.

  • Necessary Paperation - To promote transparency, we provide clear and realistic estimates of the expenses, necessary papers, and requirements for the entire procedure before we begin.
  • Share Your Necessary Papers - Our staff guarantees simple paper works. To ensure a timely filing and delivery, we gather the required paperwork and distribute the pertinent draughts.
  • Analysis and Update- We don't spend any time preparing and filing your application after gathering the required paperwork. It is brought to your knowledge that your application is developing.

Frequently Asked Questions

Approved entities that comply with section 10 of the Foreign Exchange Management Act, 1999, and have received permission from the Reserve Bank of India to engage in foreign exchange business.

The main goal of FFMC's business strategy is to guarantee that, despite the competitive environment, consumers will receive the most efficient and superior services available. Additionally, the FFMC works to extend the availability of foreign exchange services to visitors to India, including NRIs.

The company requesting an FFMC Licence must first and foremost register with the Companies Registrar in accordance with the 2013 Companies Act. The entity's primary operation should be Forex currency trading, according to the object clause. In addition, the business should make sure that there are no current legal matters or Revenue Intelligence or the Department of Enforcement proceedings involving the corporation.

Yes, the RBI must receive the application materials each year in order to renew the FFMC Licence.

No, there is absolutely no chance that you might function as a money changer without obtaining an FFMC Licence.

Application in the prescribed form and the necessary paper works must be submitted to the relevant Regional Office of the Foreign Exchange Department of the RBI, in accordance with Section 10(1) of the FEMA, 1999.

The three FFMC Licence types are:
Authorised Dealer Category 1 Banks
Authorised Dealer Category 2
FFMC, or Full Fledged Money Changer

No, according to the RBI's master circular, franchisees are only permitted to engage in a limited number of money-changing operations.

Before starting the business, deliver all of these copies to the regional office of RBI.
A copy of the lease Agreement.
A copy of the shop registration
Establishment Act or Rental Receipt

Business Visits
Personal Visits
Prepaid Cards for Forex

The acronym FFMC stands for a full-fledged money changer. A company will be classified as Full Fledged Money Changers (FFMC) if it plans to engage in foreign exchange business after receiving the Reserve Bank of India's prior approval.

25 lakhs for a single branch licence application and Rs. 50 lakhs for a multiple-branch licence application. The action of money changing that will be conducted through the corporation must be reflected in the object clause of the Memorandum.

The licence for a Full-Fledged Money Changer (FFMC) is only valid for a year. As a result, the licence holder must start the FFMC Licence Renewal Process two months before the licence expires. No new FFMC Licence Renewal Process applications may be submitted once the licence has expired or after a year.

The amount of foreign currency that one is supposed to bring to India is unrestricted that is not limited. However, if the sum mentioned exceeds a specific threshold, you must specify or make a note of it.

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