{"id":13999,"date":"2020-07-30T18:24:54","date_gmt":"2020-07-30T12:54:54","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=13999"},"modified":"2020-07-30T18:28:16","modified_gmt":"2020-07-30T12:58:16","slug":"benefits-types-and-procedure-of-ffmc-license-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/benefits-types-and-procedure-of-ffmc-license-india\/","title":{"rendered":"An Outlook on Benefits, Types and Procedure of FFMC License"},"content":{"rendered":"\n<p class=\"has-drop-cap\">FFMC License is reserved for those entities that deal with activities of forex trading. The RBI governs the money changing activities in the country and regulates <a href=\"https:\/\/corpbiz.io\/ffmc-license\"><strong>FFMC License<\/strong><\/a>. As per section 10 of the Foreign Exchange Management Act, 1999, the money-changing activities are limited to the authorized entities governed by the regulation of RBI. Here in this article we will discuss types and procedure of FFMC license in detail; <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"591\" height=\"302\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-139.png\" alt=\"FFMC License\" class=\"wp-image-14000\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-139.png 591w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-139-300x153.png 300w\" sizes=\"(max-width: 591px) 100vw, 591px\" \/><\/figure><\/div>\n\n\n\n<p>FFMC License holders procure funds from Indian residents and non-residents and undertake forex trading activities. Such entities typically benefit foreign visitors and travelers seeking financial aid to support their activities. No entity is liable to undertake a money exchange business unless it avails license for the same from the <strong>RBI<\/strong><sup><a href=\"https:\/\/www.rbi.org.in\/\"><strong>[1]<\/strong><\/a><\/sup>. The unauthorized money exchanges are vulnerable to the hefty penalties as per the act.&nbsp; <\/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\/benefits-types-and-procedure-of-ffmc-license-india\/#Eligibility_criteria_to_avail_FFMC_license_in_India\" >Eligibility criteria to avail FFMC license in India<\/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\/benefits-types-and-procedure-of-ffmc-license-india\/#Authorized_Money_Changers_category_in_India\" >Authorized Money Changers category 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\/benefits-types-and-procedure-of-ffmc-license-india\/#Types_of_FFMC_Licence\" >Types of FFMC Licence<\/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\/benefits-types-and-procedure-of-ffmc-license-india\/#Benefits_offered_by_FFMC_in_India\" >Benefits offered by FFMC in India<\/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\/benefits-types-and-procedure-of-ffmc-license-india\/#Procedure_to_avail_FFMC_License_in_India\" >Procedure to avail FFMC License in India<\/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\/benefits-types-and-procedure-of-ffmc-license-india\/#Post-approval_conditions_for_FFMC_license_holders\" >Post-approval conditions for FFMC license holders<\/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\/benefits-types-and-procedure-of-ffmc-license-india\/#Mandatory_Documentation_for_FFMC_License_in_India\" >Mandatory Documentation for FFMC License in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/benefits-types-and-procedure-of-ffmc-license-india\/#Key_Points_to_Remember\" >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-9\" href=\"https:\/\/corpbiz.io\/learning\/benefits-types-and-procedure-of-ffmc-license-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_criteria_to_avail_FFMC_license_in_India\"><\/span>Eligibility criteria to avail FFMC license in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Companies seeking FFMC License in India must be registered\nentities under the Companies Act 1956\/ Companies Act 2013.<\/li><li>A minimum net owned fund of Rs. 25 Lakh is mandatory for the\nindividual seeking FFMC license for a single branch. Meanwhile, in the case of\nmultiple branches, the minimum net owned fund escalates up to Rs. 50 lakh. <\/li><li>Entities with a criminal record are not eligible to avail FFMC\nlicense in India.<\/li><li>After the availment of the FFMC license, the entity must\ncommence its business activity within six months, or else the license will\nlapse. <\/li><li>The company must ensure that money exchange activity is\nmentioned in the object clause of Memorandum.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Authorized_Money_Changers_category_in_India\"><\/span>Authorized Money Changers category in India <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Here is the list of AMCs that exist in India:-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Full Fledged Money Changers (FFMCs)<\/li><li>Authorized Dealer Category- 1 Banks (AD Category 1)<\/li><li>Authorized Dealer Category- 2 Banks (ADs Category-2)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_FFMC_Licence\"><\/span>Types of FFMC Licence<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>FFMC can pull off a franchise agreement with an authorized\nentity to perform money exchanging activities such as forex trading &amp; coin\nconversion. <\/li><li>FFMCs are permitted to trade Indian currency to foreign currency\nfor the non-resident individuals against international cards.<\/li><li>RBI has permitted FFMC to engage with forex trading, purchase\ntraveler&#8217;s cheques or coins.<\/li><li>An FFMC is authorized to sell foreign exchange for Forex prepaid\ncards, Business Visits, and Private visits. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_offered_by_FFMC_in_India\"><\/span>Benefits offered by FFMC in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Full Fledged Money Changer has the <strong><em>capability to furnish sale facilities<\/em><\/strong> for foreign exchange. <\/li><li>FFMC can furnish <strong><em>encasement certificates<\/em><\/strong> in case of purchase of traveler cheques, coins, and foreign currency notes from residents and non-residents.<\/li><li>FFMC can <strong><em>perform foreign exchange activities<\/em><\/strong> for the overseas residents visiting India<\/li><li>FFMC is able to <strong><em>address transactions<\/em><\/strong> regarding coins, foreign currency notes, &amp; traveler cheques at the <strong><em>current exchange rate<\/em><\/strong>. <\/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<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_to_avail_FFMC_License_in_India\"><\/span>Procedure to avail FFMC License in India <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Only those firms are eligible to avail FFMC license that ensures conformity with licensing prerequisites. The procedure of FFMC license is defined below as per the RBI&#8217;s guidelines:<\/p>\n\n\n\n<ul><li>Fill up the FFMC license application by furnishing the required information.<\/li><li>Next, submit the application along with the mandatory documents to the respective regional office of RBI&#8217;s Foreign Exchange Department. <\/li><li>RBI would scrutinize the application under &#8220;Fit &amp; Proper&#8221; criteria. As soon as the RBI completed the verification process and got satisfied, the license will be awarded to the applicant within the timespan of 2 to 4 months.<\/li><li>The applicant will then need approval from the empowered committee of RBI.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Post-approval_conditions_for_FFMC_license_holders\"><\/span>Post-approval conditions for FFMC license holders<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The applicants must cater to the given requirements as soon as they receive the FFMC license<\/em><\/strong><\/p>\n\n\n\n<ul><li>A copy Registration under Shops and Establishment Act, or rent receipt should be submitted to RBI&#8217;s regional office. <\/li><li>After complying with the complete procedure of FFMC License, holders must initiate their business activity within six months from the day RBI furnishes the license. <\/li><li>One copy of the FFMC license should be presented at every branch of business. <\/li><li>FFMC must conduct comprehensive auditing for their transaction from time to time to ensure transparency. <\/li><li>FFMCs must furnish audited Balance Sheet every year to RBI&#8217;s regional office.  <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Mandatory_Documentation_for_FFMC_License_in_India\"><\/span>Mandatory Documentation for FFMC License in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The given list exhibits the range of documents that an applicant needs to submit to obtain an FFMC License<\/em><\/strong><\/p>\n\n\n\n<ul><li>A confidential report generated by the applicant\u2019s bank in a\nsealed envelope. <\/li><li>A duplicate copy of the COI of a company. <\/li><li>Copy of AOA and MOM encompasses the provision for money changing\nactivities. <\/li><li>Copy of balance sheet, audited account, and Profit &amp; Loss\nAccount.<\/li><li>Detail of the associated entities operating in an identical\nregime or dealing with similar affairs.&nbsp;&nbsp;\n<\/li><li>Declaration ensuring that the company has no pending case\nagainst the Board of Revenue Intelligence (DRI)\/ Board of Enforcement (DoE). <\/li><li>A duplicate copy of the board resolution illustrating detail regarding the money exchange business.  <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Points_to_Remember\"><\/span>Key Points to Remember <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The FFMCs are the RBI-driven entities that deal with foreign\nexchange and provide the services to the residents and tourists.<\/li><li>Anyone who intends to enter such a business must be working\nunder the canopy of corporate law and have a minimum-owned fund of Rs 25 lakhs.<\/li><li>Every registered FFMC is under the obligation to maintain the balance books. Logbook that records activities and records of transactions and traveler&#8217;s cheque. <\/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>It is mandatory to obtain an FFMC license  who wishes to carry the money exchange business in India. The FFMC entity registered with the Reserve Bank of India can deal with foreign exchange for a distinct purpose like the purchase of foreign exchange from the residents as well as non-residents visiting India. The business entity should ensure conformity with RBI&#8217;s provisions after the availment of the FFMC license to avoid legal conflict. Contact <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> in case if you like to grab more information on the same.<\/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\/compliances-for-a-full-fledged-money-changer-in-india\/\">Guide: Compliances for a Full Fledged Money Changer in India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FFMC License is reserved for those entities that deal with activities of forex trading. The RBI governs the money changing activities in the country and regulates FFMC License. As per section 10 of the Foreign Exchange Management Act, 1999, the money-changing activities are limited to the authorized entities governed by the regulation of RBI. Here [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":14066,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[217],"tags":[824],"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":5696,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/13999"}],"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=13999"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/13999\/revisions"}],"predecessor-version":[{"id":14081,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/13999\/revisions\/14081"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/14066"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=13999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=13999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=13999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}