{"id":14145,"date":"2020-07-31T15:59:09","date_gmt":"2020-07-31T10:29:09","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=14145"},"modified":"2020-07-31T16:07:57","modified_gmt":"2020-07-31T10:37:57","slug":"objectives-behind-allowing-ffmcs-business","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/objectives-behind-allowing-ffmcs-business\/","title":{"rendered":"Guide on Objectives behind allowing FFMCs Business"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Overseas individuals, tourists who come to India, often struggle to support their financial activities due to inadequate funds. And the funds they possess are of no use unless it is being converted in the Indian currency. And that&#8217;s where the FFMC comes into the play. They are the only registered entity in India who can provide foreign exchange services to the people in need. In this article, you will come across various aspects of FFMC and learn why they hold unprecedented value for foreigners visiting India. This article shed some light on the objectives behind allowing FFMCs to do business.<\/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\/objectives-behind-allowing-ffmcs-business\/#Overview_on_FFMC\" >Overview on 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\/objectives-behind-allowing-ffmcs-business\/#Objectives_behind_allowing_FFMCs_to_do_business\" >Objectives behind allowing FFMCs to do business<\/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\/objectives-behind-allowing-ffmcs-business\/#Documentations_needed_for_FFMC_License\" >Documentations needed for 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\/objectives-behind-allowing-ffmcs-business\/#Pointers_worth_to_remember\" >Pointers\nworth 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\/objectives-behind-allowing-ffmcs-business\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overview_on_FFMC\"><\/span>Overview on FFMC <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> FFMC stands for Full Fledged Money Changer. These entities work under the RBI&#8217;s guidelines, and their role is to undertake the forex trading activities in India. Without a valid <a href=\"https:\/\/corpbiz.io\/ffmc-license\"><strong>FFMC license<\/strong><\/a>, no entities are liable to engage with such business, or else they have to confront hefty penalties. Hence, to pull off such nature of the business, an applicant to obtain a valid FFMC license from RBI. The authorized money exchanger&#8217;s job is to buy out foreign exchange from the foreigners and the Indian nationals and sell it to individuals visiting India. It is probably the one main objective behind allowing FFMCs to do business in India.\u00a0 <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Type of AMCs in\nIndia <\/strong><\/h3>\n\n\n\n<p>Three types of AMC exist in the country at\npresent. <\/p>\n\n\n\n<ul><li><strong><em>Authorized Dealer Category- 1 Bank (AD Category 1)<\/em><\/strong> &#8211; Presently, there are 102 entities available in India working as an Authorized Dealer Category- 1 including, Canara bank, SBI, and Axis bank<\/li><li><strong><em>Authorized Dealer Category- 2 Banks (ADs Category-2)<\/em><\/strong><\/li><li><strong><em>Full Fledged Money Changers (FFMCs)<\/em><\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Objectives_behind_allowing_FFMCs_to_do_business\"><\/span>Objectives behind allowing FFMCs to do business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Provide\nseamless access to foreign exchange facilities to the individuals visiting\nIndia.&nbsp; <\/li><li>Promotes\nforex exchange activities at a larger scale. <\/li><li>Providing\nvisitors access to home currency against the foreign currency notes, coins, and\ntravelers&#8217; cheques obtained from the residents as well as non- residents. <\/li><li>Gaining\naccess to international credit and debit cards from the residents as well as\nnon- residents. <\/li><li>Facilitates\nStore Value Card\/Charge Card\/Smart Card to the resident visiting abroad. <\/li><li>Providing\nseamless cross-border transactions.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Who can raise an FFMC license in India? <\/h3>\n\n\n\n<p>Entities that are willing to undertake the FFMC business in India need to satisfy following eligibility criteria without exception.<\/p>\n\n\n\n<ul><li>The\ncompany should be a legal entity and operates under the canopy of Company Act\n2013<\/li><li>Entity\navailing FFMC license for a single branch should have a net owned fund of Rs. 25\nLakhs. <\/li><li>For multiple branches, the minimum threshold of a net owned fund* is Rs. 50 Lakhs.  <\/li><\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> Net owned fund* = (Paid-up Equity Capital + Credit balance in Profit &amp; Loss A\/c + Free reserves) &#8211; (Aggregated value of loss + intangible assets + Deferred revenue expenditure). <\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documentations_needed_for_FFMC_License\"><\/span>Documentations needed for FFMC License <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Application regarding the FFMC license is\navailable on the RBI official website. An applicant seeking an FFMC license\nneeds to fill up this application and submit it along with the following\ndocuments to the respective regional office of the foreign exchange department\nof RBI. <\/p>\n\n\n\n<ul><li>Copy of\nthe company&#8217;s incorporation certificate. <\/li><li>Copy of\nCommencement certificate of the business. <\/li><li>Copy of\nMOA along with a letter displaying clause related to the course of action that\nthe company will undertake in this business. <\/li><li>The\nconfidential report furnished by the applicant&#8217;s bank, specifically in a CIR\nformat. <\/li><li>Audited\nBalance Sheet copy.<\/li><li>Certificate\nfrom CA validating the company&#8217;s net owned funds. <\/li><li>The\ndeclaration confirms that the company and its founding members are not engaged\nwith felony and have no pending cases against the ED\/DRI. <\/li><li>A write\nup by the owner briefing company&#8217;s operation.<\/li><li>Proof\nregarding the previous involvement with the FFMC business, if any.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Post-approval\nprerequisites <\/strong><\/h3>\n\n\n\n<ul><li>Once the\napplicant&#8217;s FFMC license is availed, the next step is to provide the following\ndocuments before the commencement of the business. <\/li><li>Lease\nagreement copy. <\/li><li>A copy of\nthe Shops Act. <\/li><li>Rent\nreceipt. <\/li><li>The FFMC\nlicense holder must display a copy of the license at the business premises. <\/li><li>The\nfinancial affairs of the company must be scrutinized through a proper auditing\nprotocol to ensure transparency. <\/li><li>FFMCs must submit a copy of the audited balance sheet to the RBI in the recommended timespan to verify their net owned funds.  <\/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\/benefits-types-and-procedure-of-ffmc-license-india\/\">\nAn Outlook on Benefits, Types and Procedure of FFMC License\n<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pointers_worth_to_remember\"><\/span><strong>Pointers\nworth to remember<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Indian nationals can visit the respective AMC office and avail International debit or credit cards to cater to their financial needs in the overseas location. <\/li><li>Only RBI driven entities are entitled to pursue money changing activities in India. Hence, it\u2019s an offense to conduct such a business without the approval of <strong>RBI<\/strong><sup><a href=\"https:\/\/www.rbi.org.in\/\"><strong>[1]<\/strong><\/a><\/sup>. <\/li><li>While going through the initial phase of the registration process, applicants need to attach a copy of the audited balance sheet validated by the company secretary. <\/li><li>After availing the FFMC license, the applicants need to furnish documents such as a copy of the shop act and rent receipt before they initiate the business activity. It&#8217;s worth noting that it is mandatory, and any violation in this context could incurs hefty penalties. <\/li><li>Anyone who intends to avail FFMC license. First, needs to avail an application that is available on the RBI&#8217;s website. <\/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>Authorized money changes play a vital role in the upliftment of the economy. AMC has simplified the process of currency conversion for the visitors coming from abroad. AMC not only helps the foreign nationals but also enables local residents to reap the benefit of their services. Hence, we can conclude that the sole purpose of FFMC in India is to provide hassle-free forex trading services to the residents and non-residents. FFMC Registration can be done through the simple online process. If you seek some technical advice on this topic, i.e., Objectives behind allowing FFMCs to do business, feel free to contact <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a>&#8216;s expert anytime. <\/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\/regulatory-framework-for-ffmc-license-in-india\/\">Regulatory Framework for FFMC License: A Comprehensive Overview<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overseas individuals, tourists who come to India, often struggle to support their financial activities due to inadequate funds. And the funds they possess are of no use unless it is being converted in the Indian currency. And that&#8217;s where the FFMC comes into the play. They are the only registered entity in India who can [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":14154,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[217],"tags":[828],"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":4241,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/14145"}],"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=14145"}],"version-history":[{"count":17,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/14145\/revisions"}],"predecessor-version":[{"id":14163,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/14145\/revisions\/14163"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/14154"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=14145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=14145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=14145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}