{"id":12669,"date":"2020-07-11T15:30:01","date_gmt":"2020-07-11T10:00:01","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=12669"},"modified":"2020-07-13T11:14:16","modified_gmt":"2020-07-13T05:44:16","slug":"regulatory-framework-for-ffmc-license-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/regulatory-framework-for-ffmc-license-in-india\/","title":{"rendered":"Regulatory Framework for FFMC License: A Comprehensive Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Have you ever come across the term Full Fledged Money Changer? Are you aware of the regulations that control the functioning of FFMC in India? Are you willing to know how foreign exchange works in India, or if you wish to set up a business that deals with money changing activities, then you are at the right place? This blogs will brief everything about the FFMC License and Regulatory Framework. <\/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\/regulatory-framework-for-ffmc-license-in-india\/#FFMC_License_overview\" >FFMC License overview<\/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\/regulatory-framework-for-ffmc-license-in-india\/#RBI_has_classified_the_Authorized_Dealers_in_three_categories\" >RBI has classified the Authorized Dealers in three categories:<\/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\/regulatory-framework-for-ffmc-license-in-india\/#Functionality_traits_of_FFMC\" >Functionality traits of 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\/regulatory-framework-for-ffmc-license-in-india\/#Registration_procedure\" >Registration procedure<\/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\/regulatory-framework-for-ffmc-license-in-india\/#Regulatory_Framework_for_FFMC_License\" >Regulatory Framework for FFMC License<\/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\/regulatory-framework-for-ffmc-license-in-india\/#Eligibility_criteria_to_avail_FFMC_license\" >Eligibility criteria to avail FFMC license<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/regulatory-framework-for-ffmc-license-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FFMC_License_overview\"><\/span>FFMC License overview<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before diving into the notion of the Regulatory Framework\nfor FFMC License, let go through some necessary details regarding the FFMC\nlicense.&nbsp; <\/p>\n\n\n\n<p>FFMC is abbreviated as Full Fledged Money Changer, and it\nis regulated by Section 10(1) of the Foreign Exchange Management Act and RBI.\nIf any person or a firm interested in conducting forex exchange activities in\nIndia, an RBI permission is an absolute necessity in that regard. Without it,\nno business or person can be engaged with such business as it would be deemed\nan offense. The entities approved by RBI to conduct forex exchange are referred\nto as FFMC. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RBI_has_classified_the_Authorized_Dealers_in_three_categories\"><\/span>RBI has classified the Authorized Dealers in three categories:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"580\" height=\"350\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-51.png\" alt=\"RBI has classified the Authorized Dealers\" class=\"wp-image-12671\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-51.png 580w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-51-300x181.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Authorized Dealers Category-I<\/h3>\n\n\n\n<p>The banks capable of carrying out current and capital\naccount transactions are treated as Authorized Dealers Category-I. The\nfollowing entities work under this section: <\/p>\n\n\n\n<ul><li>Commercial Banks<\/li><li>State Co-op Banks<\/li><li>Urban Co-op Banks<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Authorized Dealers Category-II<\/h3>\n\n\n\n<p>The FFMC, who are authorized to conduct non-trade related\ncurrent account transactions, is generally treated as Authorized Dealers\nCategory-II. Entities that come under this category are as follow:<\/p>\n\n\n\n<ul><li>Upgraded FFMCs<\/li><li>Coop Banks<\/li><li>Regional Rural Banks\n(RRBs)<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Authorized Dealers Category-III<\/h3>\n\n\n\n<p>Authorized Dealers Category-III covers a wide array of\nfirms under its ambit. Starting from companies approved by the Companies\nRegistration Act 2013 to several financial, and other institutions. These\nentities are authorized to works as Full Fledged Changer, and they are under\nthe obligation to provide services w.r.t specific foreign exchange\ntransactions.<\/p>\n\n\n\n<ul><li>Franchisees working\nunder these categories are authorized to process cheques related to traveling\nor coins in Indian currency<\/li><li>Conduct a forex\nexchange service. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Functionality_traits_of_FFMC\"><\/span>Functionality traits of FFMC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>FFMC based entities&#8217; primary job is to provide hassle-free money changing services to the needy ones, and they are bound to follow the stringent Registration procedure. The list below will shed some light on the work that they usually performed.&nbsp; FFMC involve in the following activities:-<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"524\" height=\"258\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-57.png\" alt=\"Functionality traits of FFMC\" class=\"wp-image-12689\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-57.png 524w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-57-300x148.png 300w\" sizes=\"(max-width: 524px) 100vw, 524px\" \/><\/figure><\/div>\n\n\n\n<ul><li>Foreign exchange is\nhandled by FFMC to address activities like a private visit, Forex Prepaid\ncards, and business visits. <\/li><li>FFMC is a legal\nplatform to purchase foreign currency notes. <\/li><li>FFMC is a one-stop\nprovider of travelers&#8217; cheques as well as coins to residents and non-resident\npersonals. <\/li><li>FFMC also involves\nin providing Indian currency to foreign tourists against the International\ncredit &amp; debit cards. <\/li><li>As a franchisee, if\nyou wish to perform forex exchange activities, then Franchisee Agreement is an\noption for you. The agreement will enable you to perform various activities\nsuch as forex exchange, rendering notes, coins, and travelers&#8217; cheques. <\/li><li>Authorized Money\nChangers are the RBI approved entities under Section 10 of the Foreign Exchange\nManagement Act 1999. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Registration_procedure\"><\/span>Registration procedure<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The registration process of FFMC is a reasonably straightforward task. Firms who project themselves as authorized money exchangers in the country need to get registered in the following manner. Keep in mind that the FFMC license is not attainable via an online process. <\/p>\n\n\n\n<p>The first thing that the applicant needs to do is to fill\nup the application form. After completing this requirement, the applicant must\nsubmit the form to the respective Regional Office of the Foreign Exchange\nDepartment along with necessary documents such as: <\/p>\n\n\n\n<ul><li>Certificate of Incorporation <\/li><li>MOA which briefs the company&#8217;s provision toward this business. <\/li><li>A bank assessment report in a sealed envelope. <\/li><li>Certificate from Statutory Auditors.<\/li><li>Copy of latest audited Accounts which must contain audited copies of Balance Sheet, <\/li><li>The newest copy of Profit and Loss Account (if applicable)<\/li><li>Board Resolution copy approved by core members stating money changing business.<\/li><li>The relevant documents that describe the company. <\/li><li>Investigation report of DOE\/DOI.<\/li><li>Detail of other branches that are dealing with financial services. <\/li><li>Disclosure w.r.t FFMC\/RMC License held previously. <\/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\/compliances-for-a-full-fledged-money-changer-in-india\/\">Guide: Compliances for a Full Fledged Money Changer in India<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Regulatory_Framework_for_FFMC_License\"><\/span>Regulatory Framework for FFMC License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The business owner needs to look into the Regulatory Framework&#8217;s attributes for the <a href=\"https:\/\/corpbiz.io\/ffmc-license\"><strong>FFMC License<\/strong><\/a>. The concerned entities need to jot down important points that might affect their interest w.r.t this business. The following section will cover this very aspect and let you understand the notion related to the Regulatory Framework for FFMC License. <\/p>\n\n\n\n<p>The procedure for attaining a new FFMC license is a vital\naspect included in the Regulatory Framework for FFMC License as it helps in\nsecuring an FFMC license. Moreover, it provides details regarding FFMC license\nrenewal, the appointment of agents\/Franchisees, Know Your Customer (KYC) \/ Anti\nMoney Laundering (AML), and Branch Licensing, etc. <\/p>\n\n\n\n<p>Regulatory Framework for FFMC License discourages the\nterrorist funding and consider it as an offense. A detailed guideline has been\nlaid down by RBI in this context, which applies to all FFMC based entities. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_criteria_to_avail_FFMC_license\"><\/span>Eligibility criteria to avail FFMC license<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you are projecting yourselves as an approved FFMC\nentity, specific eligibility criteria need to be met. The following section has\ncovered this aspect in details, have a look on that. <\/p>\n\n\n\n<ul><li>The company must be working as a ROC registered entity that follows the provision of <strong><em>Companies Act, 2013<\/em><\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>. <\/li><li>If the company is working as a single entity with no branches, its net owner funds should not be less than INR 25 lacs. Meanwhile, in the case of multiple branches, the figure raised to INR 50 lacs.<\/li><li>The company must not have any pending cases related to fraud or any other offense against the department of Revenue Intelligence or Department of Enforcement.<\/li><li>The object clause of the company must state detail and obligation regarding money changing activity.<\/li><\/ul>\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 is an effective platform that streamlines the forex exchange activities and renders services to those entities that need the most. It should be kept in mind that these activities cannot be pursued until and unless the firm avails the license from the RBI. The violation of this provision could lead to dire consequences and substantial penalties.<\/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\/apply-for-ffmc-license-in-india\/\">How to Apply For FFMC License in India?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Have you ever come across the term Full Fledged Money Changer? Are you aware of the regulations that control the functioning of FFMC in India? Are you willing to know how foreign exchange works in India, or if you wish to set up a business that deals with money changing activities, then you are at [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":12673,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[217],"tags":[754],"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":4635,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12669"}],"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=12669"}],"version-history":[{"count":15,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12669\/revisions"}],"predecessor-version":[{"id":12723,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12669\/revisions\/12723"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/12673"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=12669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=12669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=12669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}