How to avail new FFMC license: Step by step guide

calendar04 Aug, 2020
timeReading Time: 4 Minutes
New FFMC License

There are many individuals out there who want to engage with the forex trading business for plenty of reasons. The authorized money exchanger, aka AMC, is an RBI-driven entity that provides currency conversion services to the individual coming from abroad. These entities worked under the influence of RBI-guidelines and treated as an FFMC license holder. The FFMC is an abbreviation of the term “Full fledge money changers”. A Full Fledged Money Changer is RBI-approved organizations that buy foreign exchange from Indians residents and sell the same for the individual visiting abroad for private or business purposes.

new FFMC license

As Section 10 of the Foreign Exchange Management Act, 1999[1] recommends, AMCs are the only eligible to deal with money-changing actions and renders foreign exchange services. For the reason of overcoming the hassles faced by voyagers & international visitors, specific corporations have been provided the registration dealing in foreign currency notes, coins, and traveler’s cheques under the RBI’s guidelines.

One of the most unpleasant aspects of this business is that it can’t operate in an autonomous framework. It could be a costly affair for someone who tries to run this business without the RBI’s permission. Adequate knowledge of FFMC norms is compulsory for the individual who wants to pursue the forex trading business. This article will brief you on how to avail new FFMC license legitimately.

Read our article:Guidelines For The FFMC License; A complete Overview

Activities performed by Authorized money changers

  • Provide currency conversion at the current rate of exchange to the resident and non-residents.
  • Selling Indian currency to individuals coming from abroad against the international debit/credit cards.
  • Can elaborate the scope of work by entering into a franchise agreement to conduct activities such as the conversion of coins, travelers’ cheque, and forex trading

Eligibility criteria to avail New FFMC License

  • The company that aims to pursue money changing activities must be registered under the Registrar of Companies (RoCs) under Companies Act.
  • The MOA of the company must reflect currency conversion as the main activity.
  • The company should not engage with criminal cases against the Department of Revenue Intelligence & Department of Enforcement.
  • The applicant aiming to avail of a New FFMC License for single or multiple branches must have a net owned fund of Rs 25 and 50 lakh, respectively.
  • The applicant must commence the business activities within six months of the issuance of the FFMC license.

Imperative documentations to obtain new FFMC License

  • Commencement certificate and certificate of incorporation of the company.
  • Past three years audit report regarding the balance sheet and Profit & Loss account.
  • MOA & AOA of the company reflecting money changing activities as the main business.
  • RBI-based Application form (annexure-II) renders briefing on money changing activities.
  • Certificate issued by the Statuary Auditors regarding the authorization of owned funds.
  • The copy of the Board Resolution showing company involvement with the money changing activities.
  • The confidential bank report of the applicant.
  • Declaration in the context of the procurement of customer data and Anti-money Laundering in a policy framework.

The process to avail New FFMC License

The step-by-step processes to avail new FFMC License are as follows:-

Step-1 Filing of an Application

The application for the FFMC license is available on the RBI website. The applicant needs to download this application and attached it with the documents as mentioned above. The application shall be submitted to the regional office of RBI.

Step-2 Fit & Proper Criteria

Then, RBI would conduct a verification of the firm’s Director based on “Fit & Proper Criteria.” Under this, the scrutiny panel of RBI will determine whether the Director of the applicant company is qualified enough to undertake the business or not. The panel also looks into the legal matter of directors and pinpoints any disparity that might conflict with the RBI’s provisions.

Step-3 Candidature valuation by Empowered Committee

The empowered committee would analyze the applicant’s documentation and renders their approval once they are satisfied.

Step-4 RBI approval

After completing the above steps, RBI might grant their approval to the applicant to conduct foreign exchange business.

Step-5 Submitting additional licenses

After raising the license from RBI, the applicant is not permitted to initiate the business activities unless he/she submits the documents such as Lease Agreement, Shop & Establishment License, or property paper to the relevant authority.

Step-6 Initiation of the business

After submitting the post-license documents, the company must initiate its business activities in the timespan of 6 months from the date on which the license was issued. The applicant must inform the authority before undertaking the business activities.

Key points regarding new FFMC license holders

  • New FFMC license holders should commence their operations within six months as soon as they avail permission from RBI.
  • An application for renewal of the FFMC license should be made before one month of the expiry data. The restoration of the license is not possible after the expiration of the license.
  •  The application for a new FFMC license is filed along with mandatory documents to the RBI’s foreign exchange department.


All the FFMC license holders need to run their business as per the provision of the law. If anybody tries to override these guidelines for profit, then it would be treated as a felony. Hopefully, by now, everything has been cleared to you regarding new FFMC license. Feel free to get in touch with the CorpBiz experts for further clarification on this matter. Our experts can offer unparalleled services to help seekers seeking technical advice on finance and tax.

Read our article:An Outlook on Benefits, Types and Procedure of FFMC License

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