{"id":12179,"date":"2020-07-05T13:00:52","date_gmt":"2020-07-05T07:30:52","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=12179"},"modified":"2022-09-10T14:28:43","modified_gmt":"2022-09-10T08:58:43","slug":"compliances-for-a-full-fledged-money-changer-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/compliances-for-a-full-fledged-money-changer-in-india\/","title":{"rendered":"Guide: Compliances for a Full Fledged Money Changer in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">As per the provisions under section 10 of the\nForeign Exchange Management Act, 1999, any firms that want to engage in money\nchangers activity must obtain a Full Fledged Money Changer License in India.<\/p>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/ffmc-license\"><strong>FFMC license<\/strong><\/a> comes with additional obligations that need to be catered as per the given provision. If any FFMC struggles to ensure conformity with compliances, then this could lead to hefty penalties. Before we delve deeper into the concept of Compliances for a Full Fledged Money Changer in India, let&#8217;s go through some basics first. <\/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\/compliances-for-a-full-fledged-money-changer-in-india\/#About_Full_Fledged_Money_Changer\" >About Full Fledged Money Changer<\/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\/compliances-for-a-full-fledged-money-changer-in-india\/#Post-approval_requirements_for_Full_Fledged_Money_Changer_in_India\" >Post-approval requirements for Full Fledged Money Changer in India<\/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\/compliances-for-a-full-fledged-money-changer-in-india\/#Conditions_that_support_cancellation_of_FFMC_license\" >Conditions that support cancellation of FFMC license<\/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\/compliances-for-a-full-fledged-money-changer-in-india\/#FFMC_License_Key_points_to_remember\" >FFMC\nLicense: Key points to remember<\/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\/compliances-for-a-full-fledged-money-changer-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"About_Full_Fledged_Money_Changer\"><\/span><strong>About Full Fledged Money Changer<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Full Fledged Money Changer or FFMC is a legal\nentity that engaged in the trading of foreign exchange that benefits NRIs and\nthe residents of the native country.<\/p>\n\n\n\n<p>As per provisions under section 10 of the FEMA Act, 1999, no business can involve in the forex exchange services until and unless it is authorized from the relevant authority. Furthermore, RBI approval is mandatory for the entities that are willing to participate in the FFMC business. This condition is non-negotiable, and its violation could lead to massive penalties as per the FEMA Act.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Pre-requisites for\nobtaining FFMC License<\/strong><\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"603\" height=\"220\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-21.png\" alt=\"requisites for obtaining FFMC License\" class=\"wp-image-12182\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-21.png 603w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-21-300x109.png 300w\" sizes=\"(max-width: 603px) 100vw, 603px\" \/><\/figure><\/div>\n\n\n\n<p><strong>Anybody who willing to obtain an FFMC license in India needs to cater to the requirement mentioned below. <\/strong><\/p>\n\n\n\n<ul><li><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><strong> <\/strong> registration is a mandatory requirement for obtaining this license. <\/li><li>The willing company&#8217;s minimum net-owned funds must be well above Rs. 25 lakhs and 50 lakhs for single and multiple branches FFMC, respectively. <\/li><li>The company should not be accused of violating provisions under the Directorate of Enforcement and Directorate of Revenue Intelligence.<\/li><li>The Memorandum or object clause must reflect the core operation of the firm i.e., money changing activity. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Post-approval_requirements_for_Full_Fledged_Money_Changer_in_India\"><\/span>Post-approval requirements for Full Fledged Money Changer in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>On the receipt of RBI&#8217;s approval, FFMCs need\nto ensure conformity with the following requirements:<\/p>\n\n\n\n<ul><li>Provide a registration copy under Shop Act or other documentation like a copy of lease agreement, rent receipt, etc., to the RBI&#8217;s regional office before business initiation. <\/li><li>The newly-established FFMCs need to conduct its operation as per the RBI&#8217;s instructions. <\/li><li>A copy of the RBI license supporting FFMC should ensure its presence in every working branch. <\/li><li>The Full Fledged Money Changer ensures the periodic audit of their activities on a concurrent basis. <\/li><li>Every FMMC pan India is entitled to provide its audited balance sheet to the RBI&#8217;s regional office.  <\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/apply-for-ffmc-license-in-india\/\">How to Apply For FFMC License in India?\n<\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Annual Compliances for Full Fledged Money Changer in India<\/h3>\n\n\n\n<ul><li>On the\nreceipt of the FFMC license and post-commencement of the company&#8217;s operation,\nyou must ensure conformity with the following compliances. <\/li><li>Ensure\nthe proper maintenance of purchase register w.r.t foreign currency, logbooks,\nand travelers&#8217; cheque. <\/li><li>Ensure\nmonthly submission of statements w.r.t trading of foreign currency to RBI.<\/li><li>Ensure\nmonthly submission of receipt statements accompanied by the purchase of US\n$10,000 or above transaction to the RBI&#8217;s regional office and Foreign Exchange\nDepartment. <\/li><li>Ensure\nthe submission of the quarterly statement w.r.t foreign currency account\nmaintained in India. <\/li><li>FFMCs\nmust submit an annual audited balance sheet along with the certificate issued\nby statutory auditor\u2019s w.r.t NOFs (Net-Owned Funds). Submission should be done\nwithin the due date.<\/li><li>FFMC must\nimplement a robust, auditing framework to ensure transparency. <\/li><li>The\nannual statement must found their way to the relevant authority such as the\nRegional Office of the FED (Foreign Exchange Department), RBI without any\ndelay.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_that_support_cancellation_of_FFMC_license\"><\/span><strong>Conditions that support cancellation of FFMC license <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"703\" height=\"477\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-22.png\" alt=\"cancellation of FFMC license \" class=\"wp-image-12183\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-22.png 703w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-22-300x204.png 300w\" sizes=\"(max-width: 703px) 100vw, 703px\" \/><\/figure><\/div>\n\n\n\n<p>The RBI may cancel an authorization conferred\nunder Section 10(1) of FEMA 1999 at any time if:-<\/p>\n\n\n\n<ul><li><em>The money changing activities found to be unreasonable. <\/em><\/li><li><em>The authorized person is not complying with the given provision, regulation, notification. <\/em><\/li><\/ul>\n\n\n\n<p>Reserve Bank has the full authority to cancel the authorization of any of the branches in case of provision violations and infringement of statutory compliance. The RBI has a right to amend the existing provisions whenever they want without informing the licensee. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FFMC_License_Key_points_to_remember\"><\/span><strong>FFMC\nLicense: Key points to remember<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Entities\nother than the bank can apply for the Full Fledged Money Changer license. <\/li><li>FFMC\nlicense needs to be renewed every year. Thus, an application, along with\nmandatory documents, must be provided to RBI. <\/li><li>A net\nowned fund for an applicant to obtain FFMC is Rs. 25Lakh for a single branch\nand 50 lakh for multiple offices.<\/li><li>FFMCs\nneeds to maintain all the documents w.r.t to forex trading for future due\ndiligence. <\/li><li>A\nperiodic audit of FFMC is mandatory as per RBI&#8217;s guideline. Thus its violation\ncould lead to cancellation of license. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>FFMC license helps to comply with the legality of the business. It also helps in availing certificate of encashment during the purchase of coins, foreign currency notes, and Travellers\u2019 cheques. FFMC is a must-have requirement for anyone looking to grow its footprint in the foreign exchange business. Frankly, the compliances concerning FFMC are not as stringent as it seems, and it would not act as a barrier unless one decided to deviate from the norm. If the concept w.r.t Compliances for a Full Fledged Money Changer in India isn&#8217;t clear to you, feel free to get in touch with us. <\/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>As per the provisions under section 10 of the Foreign Exchange Management Act, 1999, any firms that want to engage in money changers activity must obtain a Full Fledged Money Changer License in India. FFMC license comes with additional obligations that need to be catered as per the given provision. If any FFMC struggles to [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":12197,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[217],"tags":[731],"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":6071,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12179"}],"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=12179"}],"version-history":[{"count":14,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12179\/revisions"}],"predecessor-version":[{"id":48590,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12179\/revisions\/48590"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/12197"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=12179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=12179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=12179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}