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Introduction: Full-Fledged Money Changer

There is a majority of people travel abroad for a variety of purposes whether it is for studies or business meetings or vacation and what else not.  There is a significant portion of the same that consists of business travelers.  So the question is how their travel is managed when they have domestic currencies.  All you need is a consulting company that can convert your currency into the currency of the country you are traveling to.  For a company to carry out business in the forex currency exchange, it must have the FFMC license.

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What Do We Understand As A Full-Fledged Money Changer (FFMC) License?

FFMC elaborately known as the Full Fledged Money Changer license Is the license that is required by the companies to carry out the business relating to forex currency exchange.  Section 10 (1) of the FEMA, 1999 (Foreign Exchange Management Act) recommends that authorized money changers are the only organizations in the country that could deal with the money-changing actions and offer services relating to forex currency exchange.

If a business entity is undertaking such business without a valid FFMC license is liable to a heavy penalty under the FEMA Act. The main motive behind the FFMC licensing is to help tourists and residents access the forex facilities at ease.

Types Of Full-Fledged Money Changer (FFMC) Licenses

The following are the types of licenses that are required by a business entity to operate as an FFMC:-

  • Authorized Dealers Category-I Banks {AD Category–I Banks}
  • Authorized Dealers Category-II {ADs Category–II}
  • Full Fledged Money Changers {FFMCs}

Eligibility Criteria for Obtaining a Full-Fledged Money Changer (FFMC) License

The following are the eligibility criteria for obtaining the FFMC license:-

  • The company that wants to operate as a forex currency exchanger must be registered under the companies act, 2013.
  • In order to apply for a single branch license, the net funds of the company must be 25 lakhs and in the case of a multiple branch license, it must be 50 lakhs.
  • The objective of the company that it shall undertake the activities relating to money changing must be mentioned clearly in the memorandum of the company.
  • There must be no kind of civil or criminal cases pending in the court against the company with the enforcement of the Department of Revenue Intelligence.
  • After obtaining the FFMC License, the company must carry out its business activity within 6 months from the date of issuance of the Forex License and should, without fail shall communicate the same to the RBI.

Documents Required For a Full-Fledged Money Changer (FFMC) License

The application must be in the prearranged form as mentioned in Part 1 of Annexure 1 of the FED Master Direction No. 18/2015-16 reporting under the Foreign Exchange Management Act, 1999. The following mentioned documents are required to be submitted to the respective regional office of the Forex Department of the RBI under whose jurisdiction the registered office of the company comes.

  • The Incorporation Certificate of the Company/entity.
  • The Memorandum of Association (MOA) and Articles of Association (AOA) of the company shall be required for obtaining the FFMC license. The AOA of the company shall include a proviso for undertaking a money-changing business.
  • A copy of the most recent audited accounts along with a certificate of verifying the Net Owned Funds as of the date of application from the Statutory Auditors.
  • A copy of the Profit & Loss Account of the company and the audited Balance Sheet of the last three years.
  • The Applicant (Company) Banker’s confidential report.
  • An assertion to give an outcome that no proceedings have been initiated by or are pending with any Authority.
  • A certified board motion for undertaking the money-exchanging business.

When Can A Full-Fledged Money Changer (FFMC) Licensed Commence Its Operations?

A licensed FFMC can start its working within a period of six months from the date of issuance of the license. Other documents such as rent receipts, copy of lease agreements, etc. need to be submitted to the Reserve Bank before the commencement of business under the Shops & Establishment Act.

Procedure for Obtaining the Full Fledged Money Changer (FFMC) License

The Procedure for gaining the FFMC license is as follows:

  • “Apply for the FFMC License”

The applicant that is the company or the entity needs to apply to the respective regional office of the RBI along with the documents.

  • “Fit and Proper” Criterion

The applicant that is the company must accomplish the “Fit and Proper” criterion, that no suits are imminent with the Directorate of Enforcement or DRI. Additionally, if any such suit is in pending form, then the application will not be entertained further for the allotment of the FFMC license. Plus to this, the Director of the company shall follow a similar criterion.

  • In case the above-mentioned criterion is content, then the appeal for the license will be given by the Regional Office.
  • After the approval from RBI is obtained, the applicant company will be required to submit the underlying documents to the Regional office relating to the RBI –
  • The Rent Receipt.
  • The Lease Agreement
  • The Copy of the Registration under the Shops and Establishment Act

Powers of Full-Fledged Money Changer (FFMC)

  • The FFMCs have the authority to provide foreign exchange, and they can broaden the admittance of foreign exchange amenities to inhabitants and tourists.
  • They are in the ambit to purchase foreign exchange from the residents and non-residents of India.

Annual Compliance Requirements for Full-Fledged Money Changer (FFMC)

  • The FFMCs are responsible for the maintenance of the balance book of foreign currency coins, register of everyday synopsis, a trace of the purchase of foreign currency, and traveler’s cheque.
  • After the licensing is approved the FFMCs have to endow the purchase of foreign currency notes to the RBI within the 10th of the next month.
  • The FFMCs are responsible for the submission of an annual statement to the relevant Regional Offices of the FED of the Reserve Bank of India.
  • The FFMCs are responsible for the submission of the certificate given from the statutory auditors with an annual audited balance sheet regarding the net owned funds as on the date of the balance sheet to the relevant Regional Office of the Reserve Bank.

Renewal Of The Full Fledged Money Changer (FFMC) License

The applicant has to apply for the renewal of the license one month before the expiry of the license. Any application for renewal that is received after the expiry of a license shall not be entertained.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.


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