If a company wants to carry out the activities of forex currency after getting approval of RBI (Reserve Bank of India) is known as Full Fledged Money Changer or FFMC. As per the Section 10 of the Foreign Exchange Management Act, 1999, the RBI certified the entities to deal in foreign exchange for particular purposes, and these entities are known as Authorized Money Changers (AMCs). You can also check the three different types of Authorized Money Changers below:
- Authorized dealer category – I Banks.
- Authorized Dealer Category – II.
- Full Fledged Money Changers (FFMCs).
What are the activities carried out by FFMCs?
Following are some activities which are carried out by FFMCs in India:
- Full Fledged Money Changer can go into Franchise agreement meant for undertaking the restricted money exchange business which includes the coin conversion, traveller's cheque, and conversion of foreign currency into Indian currency.
- FFMC is also allowed to vend Indian currency to foreign visitors against their International cards.
- FFMC and their franchises are allowed to buy any coins or any traveller'scheques or foreign currency.
- A Full Fledged Money Changer is allowed to sell foreign exchange for:
- Business Visits.
- For ex-prepaid cards.
- Private Visits.
What is the eligibility criteria for obtaining Full Fledged Money Changer License?
According to RBI guidelines, the applicant must meet the following requirements:
- The applicant should have company registered under the Companies Act, 2013.
- The minimum Net-owned Fund is necessary for a single branch it should be Rs. Twenty-five lakhs while it should be Rs. Fifty lakhs with multiple offices.
- There should not be any criminal or civil cases pending against the company.
- The object clause of Memorandum of association must reveal the money-changing activity is to be pursued by the company.
- The entity carries out the business within six months after acquiring the license.
What are the requirements for FFMC License?
Following are some basic requirements for Full Fledged Money Changer License in India:
- This license needs to be renewed every year.
- It is compulsory to start the company's operations within six months from the date of issue of the FFMC License.
- Using a Franchise Agreement, all the three categories of AMCs as we mentioned above appoint their franchises to widen the network for providing money changing facilities such as notes, traveller's cheque, and foreign currency into Indian currency to tourists, travellers, NRIs, etc.
- It is compulsory to check or inspect the franchisee's books yearly to ensure that all its activities comply with laid terms and conditions of Reserve Bank of India.
What are the essential documents required for Full Fledged Money Changer License?
Following is the list of all the essential documents required at the time of obtaining FFMC license in India:
- A copy of Incorporation certificate of the entity and Certificate of Commencement of Business.
- Submit the copy of MOA(Memorandum of Association) and Memorandum of an article comprising a provision for carrying money exchange business.
- Copy of the latest audited accounts, Balance Sheet, and Profit & Loss Account of the company for the last three years.
- Sealed and covered confidential report from applicant Banker.
- A declaration, providing information related that no criminal cases are initiated or pending against the applicant entity and the directors.
- Provide all the detail concerning the sister or associated entities dealing in the financial sector, for example – NBFC.
- A certified Board Resolution consists of the information of money exchange-related business.
- Details of the nature of the business.
- Submit a confidential report from the bank.
- A declaration to the effect of company's director or company which are not being investigated by DRI or DOE.
- Provide details of a previous application for FFMC or RMC license by the applicant.
- Submit a Board Resolution for applying for Full Fledged Money Changer License and undertaking money changing.
Procedure for acquiring FFMC License from RBI
To obtain the FFMC License, then you have to follow the steps mentioned below, and before the registration process, you have to make sure that you have all the documents as we mentioned above.
Step-1: Apply for FFMC license:
Submit your detailed application for the FFMC to the concerned regional office of the RBI along with the required documents.
Step-2: Fit and Proper criteria:
Applicant should fulfill fit and proper criteria which means there should not be any pending proceedings.
Step-3: Review of Application by RBI:
The RBI will review the application for fit and proper criteria for the applicant company director. If the RBI, find the form acceptable, then the application will be considered.
Step-4: Certification for Registration:
If RBI is satisfied with the application and everything is fine, the RBI will grant the license within two or three months.
Step-5: Clearance by Empowered Committee:
The applicant requires approval from the empowered committee, set up for the purpose.
Annual Compliance Requirements for FFMCFollowing are some annual compliances requirements for Full Fledged Money Changer License in India:
- FFMC is to maintain a foreign currency balance book, register for daily summary along with proof of the foreign currency purchase, etc.
- FFMC is to furnish the purchase of foreign currency notes to the Reserve Bank of India within the 10th of the next month.
- Full Fledged Money Changer is to submit a yearly statement to the respective Regional Offices of the RBI.
- Full Fledged Money Changer is to submit the certificate issued from the statutory auditors as well as an annual audited balance sheet concerning the NOF to the respective Regional Office of RBI.
It is necessary to obtain aFull Fledged Money Changer license if anyone wishes to carry money exchange business in India.The FFMC registered by the Reserve Bank of India deals with foreign exchange for the explicit purpose like the purchase of foreign exchange from the residents and non-residents visiting India. And you need to follow the requirements and compliances after obtaining the Full Fledged Money Changer license online in India.
