{"id":1558,"date":"2019-12-07T13:38:55","date_gmt":"2019-12-07T13:38:55","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=1558"},"modified":"2021-04-05T15:21:28","modified_gmt":"2021-04-05T09:51:28","slug":"overview-of-ffmc-license-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/overview-of-ffmc-license-in-india\/","title":{"rendered":"Guidelines For The FFMC License; A complete Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A majority of\npeople travel abroad for a variety of purposes. Be it a purpose of a business\nmeeting, vacation, studies, onshore opportunities and many more. A significant\nproportion of this consists of business travelers. So how do they manage\ndespite having their domestic currency? All you need is to consult a company\nwhich will convert your currency into the currency of the country which you are\nvisiting. But what are the things which you can not overlook at any cost? The\ncompany which carries out the business of forex currency exchange in India must\nhave the&nbsp;<a href=\"https:\/\/corpbiz.io\/ffmc-license\"><strong>FFMC\nLicense<\/strong><\/a>. Here, we\nwill see in detail the Procedure for obtaining the FFMC License.<\/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\/overview-of-ffmc-license-in-india\/#What_is_the_FFMC_License\" >What is the FFMC License?<\/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\/overview-of-ffmc-license-in-india\/#What_is_AMC\" >What is AMC?<\/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\/overview-of-ffmc-license-in-india\/#Who_can_apply_for_the_FFMC_license\" >Who can apply for the 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\/overview-of-ffmc-license-in-india\/#What_are_the_Documents_required_for_FFMC_License\" >What are the Documents required for 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\/overview-of-ffmc-license-in-india\/#When_can_a_licensed_FFMC_commence_its_operations\" >When can a licensed FFMC commence its operations?<\/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\/overview-of-ffmc-license-in-india\/#What_is_the_Procedure_for_obtaining_the_FFMC_license\" >What is the Procedure for obtaining the 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\/overview-of-ffmc-license-in-india\/#What_powers_are_given_to_the_FFMC_by_the_RBI\" >What powers are given to the FFMC by the RBI?<\/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\/overview-of-ffmc-license-in-india\/#What_are_the_Annual_Compliance_Requirements_for_FFMC\" >What are the Annual Compliance Requirements for FFMC?<\/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\/overview-of-ffmc-license-in-india\/#How_to_Renew_the_FFMC_License_in_India\" >How to Renew the 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-10\" href=\"https:\/\/corpbiz.io\/learning\/overview-of-ffmc-license-in-india\/#Final_Thoughts\" >Final Thoughts<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_FFMC_License\"><\/span>What is the FFMC License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The RBI must authorise the entities or the companies which perform the business of money exchange under Section 10 of the\u00a0<strong><em>Foreign Exchange Management Act<\/em><\/strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Foreign_Exchange_Management_Act\"><sup><em>[1]<\/em><\/sup><\/a><strong><em>\u00a0<\/em>(FEMA), 1999<\/strong>. After the licensing approval, these companies will be considered as AMC (Authorized Money Changer). Any business entity undertaking the money-changing business without the valid FFMC License is liable to a hefty penalty under the FEMA Act. The objective behind the business entity to get the FFMC license is that it helps the residents and tourists to access the foreign exchange facilities at ease.<\/p>\n\n\n\n<p><strong>Full Fledged\nMoney Changer<\/strong>&nbsp;commonly\nknown as FFMC License, is the license required by the companies which intend to\ncarry out the business of Forex currency exchange.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_AMC\"><\/span>What is AMC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>AMC is a Full Fledged Money Changer which are of following types: <\/em><\/strong><\/p>\n\n\n\n<ul><li>Authorised Dealer Category -I Banks,<\/li><li>Authorised Dealers Category \u2013 II<\/li><li>Full Fledged Money Changers<strong>\u00a0(FFMCs)<\/strong>.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_can_apply_for_the_FFMC_license\"><\/span>Who can apply for the FFMC license?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>To apply for the FFMC license, the company or the entity must be\nregistered under the following acts:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Companies Act 2013<\/li><li>Registration of Companies (Sikkim) Act, 1961<\/li><\/ul>\n\n\n\n<p><strong><em>The Net Owned Fund Requirement (NOF) for the companies is as follow:<\/em><\/strong><\/p>\n\n\n\n<ul><li>For a single-branch FFMC license \u2013 INR 25 Lakh<\/li><li>For a multiple-branch FFMC \u2013 INR 50 Lakh<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Documents_required_for_FFMC_License\"><\/span>What are the Documents required for FFMC License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\napplication must be in the prescribed form as given in Part 1: Annex 1 of the\nFED Master Direction No. 18\/2015-16 on Reporting under FEMA 1999. The following\ndocuments must be submitted to the respective regional office of the Foreign\nexchange Department of the RBI under whose jurisdiction the registered office\nof the company\/entity falls.<\/p>\n\n\n\n<ul><li>Incorporation Certificate of the Company\/entity.<\/li><li>Memorandum of Association (MOA) and Articles of Association (AOA) of the company. The AOA of the company must contain a provision for undertaking money changing business.<\/li><li>A copy of the latest audited accounts along with a certificate of certifying the NOF (Net Owned Funds) as on the date of application from the Statutory Auditors.<\/li><li>A copy of the Profit &amp; Loss Account of the company and the audited      Balance Sheet of the last three years.<\/li><li>Applicant (Company\/entity) Banker\u2019s confidential report.<\/li><li>A declaration to give an effect that no proceedings have been initiated by \/ are pending with the any Authority.<\/li><li>A certified board resolution for undertaking the money exchanging business.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_can_a_licensed_FFMC_commence_its_operations\"><\/span>When can a licensed FFMC commence its operations?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A newly\nlicensed FFMC should start its operations within a period of&nbsp;<strong>six months<\/strong>&nbsp;from\nthe date of issuance of the license. Under the Shops &amp; Establishment Act,\nother documents such as rent receipt, copy of lease agreement, etc. needs to be\nsubmitted to the Reserve Bank before the commencement of business.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_for_obtaining_the_FFMC_license\"><\/span>What is the Procedure for obtaining the FFMC license?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Procedure for obtaining the FFMC license is mentioned below:<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Apply for the FFMC License<\/h3>\n\n\n\n<p>The applicant\nthat is the company or the entity needs to apply to the respective regional\noffice of the RBI along with the documents.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">\u201cFit and Proper\u201d Criteria<\/h3>\n\n\n\n<p>The\napplication that is the entity must fulfil the \u201cFit and Proper\u201d criteria, which\nstates that no proceedings are pending with the DOE (Directorate of\nEnforcement) or DRI. Further, if any such proceeding is in pending condition,\nthen the application won\u2019t be escalated further for the issuance of the FFMC\nlicense. In addition to this, the Director of the company must fulfil the same\ncriteria.<\/p>\n\n\n\n<ul><li>If the \u201cFit and Proper\u201d criterion is satisfied, then the request for the FFMC license will be granted by the Regional Office.<\/li><li>After obtaining the approval from the RBI, the applicant company is required to submit the following documents to the Regional office concerned of the RBI      \u2013<\/li><li>Rent Receipt.<\/li><li>Lease Agreement<\/li><li>Copy of the Registration under Shops and Establishment Act<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_powers_are_given_to_the_FFMC_by_the_RBI\"><\/span>What powers are given to the FFMC by the RBI?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The FFMCs has the authority to deal in foreign exchange, and they can widen the access of foreign exchange facilities to residents and tourists.<\/li><li>They have the power to purchase foreign exchange from the residents and non-residents of India.<\/li><li>FMCs should keep a register containing purchase of foreign currency like balance book of traveller\u2019s cheque or daily summary and coins.<\/li><li>The Full Fledged Money Changers shall submit the consolidated statements of purchase or sale of the foreign currency notes to Reserve Bank every month.<\/li><li>There must be a suitable system of Concurrent Audit of the FFMCs transactions.<\/li><li>The proposed Company should have the Net Owned Funds (NOF) of at least INR 25 Lakh for a single-branch License while extending to INR 50 Lakh for a multiple-branch License.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Annual_Compliance_Requirements_for_FFMC\"><\/span>What are the Annual Compliance Requirements for FFMC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The FFMC has to maintain the balance book of foreign currency coins, register of daily summary, a record of the purchase of foreign currency etc.<\/li><li>The FFMC has to furnish the purchase of foreign currency notes to the RBI within the 10<sup>th<\/sup>\u00a0of the next month after the licensing is      approved.<\/li><li>The FFMC has to submit an annual statement to the respective Regional Offices of the FED of the Reserve Bank of India.<\/li><li>The FFMC has to submit the certificate issued from the statutory auditors along with an annual audited balance sheet regarding the NOFs as on the date of the balance sheet to the respective Regional Office of the Reserve Bank.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Renew_the_FFMC_License_in_India\"><\/span>How to Renew the FFMC License in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>&nbsp;A month\nbefore the expiry of the FFMC License, the applicant has to apply for the\nrenewal of the license. Any application for renewal after the expiry of license\nwill not be entertained.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Final_Thoughts\"><\/span>Final Thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>\n\nThe final thoughts suggest that it is necessary to obtain the FFMC\nLicense if you wish to carry out the foreign currency Exchange activity in\nIndia. And from the perspective of an individual, you must cross-check whether\nthe company is FFMC licensed or not. The FFMCs authorized by the Reserve Bank\nof India deals in foreign exchange for the specified purpose like the purchase\nof foreign exchange form the residents and non-residents visiting our country.\nAlso, you need to follow the post requirements and compliances after obtaining\nthe FFMC license.\n\n\n\n<\/p>\n\n\n\n<p><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-get-iec-code-in-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">How to Obtain IEC Code in India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A majority of people travel abroad for a variety of purposes. Be it a purpose of a business meeting, vacation, studies, onshore opportunities and many more. A significant proportion of this consists of business travelers. So how do they manage despite having their domestic currency? All you need is to consult a company which will [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":1559,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[217],"tags":[218],"acf":{"service_id":"55"},"authorName":"Shalini Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2019\/09\/MEE.jpeg","authorDescription":"Shalini is a B.tech graduate but her keen interest in writing impelled her to continue as a content writer. Further, She has a rich experience in Companies Act and Ammendment related topics.","postViews":8755,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/1558"}],"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\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=1558"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/1558\/revisions"}],"predecessor-version":[{"id":28601,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/1558\/revisions\/28601"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/1559"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=1558"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=1558"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=1558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}