There is a majority of people that travel abroad for 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 travelling to. For a company to carry out the business in the forex currency exchange, it must have the 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 authorized money changers are the only organizations in the country that could deal with the money changing actions and offer the 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 the tourists and residents access the forex facilities at ease.
The following are the types of licenses that are required by a business entity to operate as an FFMC:-
The following is the eligibility criteria for obtaining the 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 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.
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 receipt, copy of lease agreement, etc. need to be submitted to the Reserve Bank before the commencement of business under the Shops & Establishment Act.
The Procedure for gaining the FFMC license is as follows:
The applicant that is the company or the entity needs to apply to the respective regional office of the RBI along with the documents.
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 the similar criterion.
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 license shall not be entertained.
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