{"id":11775,"date":"2020-06-30T14:27:59","date_gmt":"2020-06-30T08:57:59","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=11775"},"modified":"2022-09-09T15:04:14","modified_gmt":"2022-09-09T09:34:14","slug":"apply-for-ffmc-license-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/","title":{"rendered":"How to Apply For FFMC License in India?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">FFMC license serves those corporates who are willing to take part in the money-changing activity in India. The cross-border monetary exchange comes under the strict provision of law, and it can only be conducted when a company acquired an FFMC license. Full Fledged Money Changers (FFMC) based entities do their business as per the RBIs guidelines and Foreign Exchange Management Act, 1990 section 10. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/#Full_Fledge_Money_Changer_License_In_India_FFMC\" >Full Fledge Money Changer\nLicense In India (FFMC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/#What_are_the_Eligibilities\" >What are the Eligibilities?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/#Franchise_License_from_existing_FFMC\" >Franchise License from existing FFMC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/#How_to_apply_for_FFMC_License\" >How to apply\nfor FFMC License?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/#Application_process_of_FFMC\" >Application process of FFMC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Full_Fledge_Money_Changer_License_In_India_FFMC\"><\/span>Full Fledge Money Changer\nLicense In India (FFMC)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"665\" height=\"398\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-187.png\" alt=\"FFMC License \" class=\"wp-image-11777\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-187.png 665w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-187-300x180.png 300w\" sizes=\"(max-width: 665px) 100vw, 665px\" \/><\/figure><\/div>\n\n\n\n<p>Every year RBI rolled out a circular on a memorandum of instruction\non money changing activities to make companies aware of compliance and provision\nregarding forex exchange. The company\u2019s personals are supposed to go through\nthis circular in detail if they want to obtain an FFMC license in a hassle-free\nmanner. This circular is also accompanied by the provision of the Foreign\nExchange Management Act, 1999. <\/p>\n\n\n\n<p>Entities other than an organized bank can also obtain an <a href=\"https:\/\/corpbiz.io\/ffmc-license\"><strong>FFMC license<\/strong><\/a> and conduct forex exchange activities with ease. Such firms, in the legal term, are tagged as Authorized Dealer Category II.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Eligibilities\"><\/span>What are the Eligibilities?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> Eligibility criteria to obtain the FFMC license are pretty straightforward. The companies that are willing to be a part of the forex exchange business must be registered under the <strong>Companies Act 2013<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup>.  <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Required Conditions to apply for FFMC License<\/h3>\n\n\n\n<ul><li>In order to\nobtain FFMC License, a company should possess a registration of Registrar of\nCompanies under Companies Act 2013.<\/li><li>The company whose\nintent is to raise the license for a single branch must hold a net owned fund\nof Rs. 25 lakhs. Meanwhile, in the case of multiple branches, this limit goes\nto Rs. 50 lakhs. <\/li><li>The company\u2019s\nprimary activity mentioned in the object clause should not be other than money\nchanging business.<\/li><li>The company should have a spotless track record, and it should have no pending cases w.r.t Department of Enforcement or Department of Revenue Intelligence. The concerned company must conduct a spot audit regularly to rectify the chances of such a violation.  <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Franchise_License_from_existing_FFMC\"><\/span>Franchise License from existing FFMC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> Companies who are looking to engage in a forex exchange business need to procure at least Rs. 10 Lakh net owned fund. Also, their business motive should be reflected in the company\u2019s memorandum as well. These requirements are essential from the license point of view. Under no conditions, the franchise can execute money-changing business by violating provision under master circular of RBI. To ensure seamless functioning of operation and maintenance, franchisers have to act as a guiding light to franchisees.  <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Reporting<\/h3>\n\n\n\n<p>Franchises that represent authorized dealer category I or\napproved dealer class II or FFMCs expect the franchise to render regular\nreporting regarding the transaction to the franchisor. <\/p>\n\n\n\n<p>Regular spot audit every six months must be conducted by\nauthorized dealer category I \/ authorized dealer category II \/ FFMCs to ensure\ntransparency. To verify the franchise compliance\u2019s prowess, a concept of\n\u2018mystery customer\u2019 should be used. <\/p>\n\n\n\n<p>A system that supports the periodic inspection of a franchise\u2019s book\/record should be placed. The investigation will help the company rectifies the pain points. It will also keep them in the vicinity of the compliance and agreement as per RBI guideline.  Franchisees must follow the KYC guidelines as it is a mandatory requirement for authorized dealer category I \/ authorized dealer class II \/ FFMCs. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Compliance<\/h3>\n\n\n\n<p>A concurrent auditor should conduct a thorough inspection of\ntransactions to check their conformity with anti-money laundering guidelines.\nIf one of the guidelines found to be compromised, the auditor must notify the\nboard about the mishap at the earliest. A certificate from the statutory\nauditor should be obtained when preparing the Annual Report on compliance with\nAML guidelines.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Penalty Provisions<\/h3>\n\n\n\n<p>Reserve Bank of India (RBI) is the legal house in the country\nwhich authorizes FFMCs to engage in foreign exchange. The provision is duly\nmentioned in section 10(1) of the Foreign Exchange Management Act 1999.<\/p>\n\n\n\n<p>Under no circumstances, the private firm or person engaged in\nmoney changing activity unless they have a required license to do so.\nOtherwise, they will be charged for a felony under this act, which is subjected\nto a penalty. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_apply_for_FFMC_License\"><\/span>How to apply\nfor FFMC License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An applicant must submit an application accompanied by relevant documents to the foreign exchange department of RBI\u2019s regional office where the company\u2019s registered office is located.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Documents Required for FFMC License <\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"576\" height=\"360\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-188.png\" alt=\"Documents Required for FFMC License\" class=\"wp-image-11778\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-188.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-188-300x188.png 300w\" sizes=\"(max-width: 576px) 100vw, 576px\" \/><\/figure><\/div>\n\n\n\n<p>The licensing process of FFMC starts with the submission of the\napplication that the applicant must render as per Annexure-II of RBIs Master\nCircular on Memorandum of Instruction on Money Changing Activities.<\/p>\n\n\n\n<p>As per Reserve Bank of India guidelines, a declaration that a robust policy framework will be established to keep control of the activities like Anti Money Laundering, KYC, and CFT before the initiation of service and procurement of FFMC license from RBI. The renewal of the FMCC license must be done every year. To do so, the applicant needs to provide relevant documents to the RBI. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Application_process_of_FFMC\"><\/span>Application process of FFMC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"696\" height=\"202\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-189.png\" alt=\"Application process of FFMC\" class=\"wp-image-11779\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-189.png 696w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-189-300x87.png 300w\" sizes=\"(max-width: 696px) 100vw, 696px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>FFMC license plays a vital role in authenticating the company&#8217;s role in running money changing activities in India. Also, FFMC license isn&#8217;t hard to avail of if the required procedure is followed by the company in a prudent manner. However, exceptions are everywhere, and if some of you encounter legal issues in this process, inform us without any delay. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/overview-of-ffmc-license-in-india\/\">Guidelines For The FFMC License; A complete Overview\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FFMC license serves those corporates who are willing to take part in the money-changing activity in India. The cross-border monetary exchange comes under the strict provision of law, and it can only be conducted when a company acquired an FFMC license. Full Fledged Money Changers (FFMC) based entities do their business as per the RBIs [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":11781,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[217],"tags":[713],"acf":{"service_id":"55"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":5237,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/11775"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=11775"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/11775\/revisions"}],"predecessor-version":[{"id":48544,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/11775\/revisions\/48544"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/11781"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=11775"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=11775"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=11775"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}