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Exploring FFMC License in India: A Comprehensive Guide


Last Updated on July 8, 2024 by Kanakkupillai

FFMC denotes a fully licensed money changer. Full-fledged Money Changers (FFMC) are companies that intend to carry out forex currency exchanges after obtaining approval from the Reserve Bank of India.

The Reserve Bank of India, by Section 10 of the Foreign Exchange Management Act (1998), grants certain entities authority to convert foreign currencies under specific circumstances. Authorized Money Changers are these entities.

Which licensed money exchangers are there?

The types of money exchangers licensed are listed below.

  • Authorized dealer category – Banks I (AD Category-I Banks)
  • Category II Authorized Dealers
  • Fully licensed Money Changers

Increased competition is required to improve service quality.

Licenses for money changers in India

Reserve Bank of India issues a full-fledged license to money changers. A person who does not have a licence is subject to penalties under the law.

A company registered under India’s Companies Act 2013 must obtain the license to apply for it.

RBI circulates a “Memorandum of Instructions” circular for money changers annually. All organizations that want to do money exchange or have already done so must follow the Foreign Exchange Management Act.

Indian Money Changer License: Eligibility Criteria

A full-fledged license for money changers is issued based on the following criteria:

  • The Companies Act of 2013 is the key law that regulates companies in India. The act consolidates and modifies legislation concerning companies in India. It is a provision that applies to all companies incorporated under the Act or any previous company law.
  • FFMC license is a license issued by the Reserve Bank of India (RBI) to entities that are authorised to buy foreign exchange from non-residents and residents of India and sell it for private and business purposes only to people visiting abroad.
  • The CA 2013 and the FFMC license are related in the following ways:
  • Companies that have been licensed as FFMC are required under the Companies Act 2013 to follow particular provisions of the Act, such as the preservation of books and records, submission of annual returns, and appointment of auditors.
  • The Companies Act 2013 grants the RBI powers to oversee the activities of FFMC licensees.
  • The FFMC license is an essential requirement for companies that are interested in money-changing business.
  • Here are some of the critical provisions of the Companies Act 2013 that are relevant to FFMC licensees:
  • Loans, investments or guarantees from a company to another company altogether exceeding a certain ceiling are not permissible per Section 186. This limit is computed as the larger of 60% of the company’s paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account.
  • Section 226 demands that companies keep the books and records of their transactions. These books and records must be maintained at the registered office of the company and should be kept for inspection by an officer of either the RBI or any other authorized.
  • A return has to be filed by the companies every year with the Registrar of Companies as per section 233. Annual returns shall contain details regarding the company’s financial statements, directors and shareholders.
  • Auditors are required to be appointed by companies to audit their financial statements by section 295. The auditors must be qualified chartered accountants.
  • The RBI has also issued several regulations that govern FFMC licensees’ activities. These regulations include:
  • Foreign Exchange Management (FEMA) Notification No. 36/2000: This notification sets out the requirements for obtaining an FFMC license.
  • Foreign Exchange Management (FFMC) Directions, 2000: These directions provide detailed guidance on the operations of FFMC licensees.
  • Companies considering applying for an FFMC license should carefully review the CA 2013 and the RBI regulations. They should also seek the advice of a qualified legal or financial advisor.
  • The exchange of currency is another significant activity in the business.
  • The Department of Revenue Intelligence and the Department of Enforcement should not be investigating this company.

Fully Fledged Money License: Basic requirements

  • Renewal of the Fully Fledged Money License is required annually.
  • The licensee can start working six months after the date of the license.
  • AMCs are classified into three different categories. AD Category – I am the top AMC-rated bank. AD Category – I, which ranks second in AMC ranking, and FFMCs are AMCs that use franchises to expand their customer base.
  • Each franchise should check their books yearly to verify that they follow RBI regulations.

Main Regulatory Authority issuing Full-Fledged Money Changer License

Reserve Bank of India oversees money lenders that are fully licensed in India. As per Section 10 of the Foreign Exchange Management Act of 1999, all licence holders must comply with RBI guidelines. Licensees must refrain from engaging in activities contrary to the authorisation they have received. RBI may revoke FFMC licences if they feel it’s in the public interest.

  • Inspection of Documents

FEMA (1999) states that the Reserve Bank of India is authorized to inspect all documents and account statements of money changers licensed by the government. For the investigation to be successful, all the investigative authorities must work together.

What is the process to get a full-fledged money changer license?

This complete form can be downloaded from the RBI Website. Completed applications must be delivered to the Reserve Bank of India’s Foreign Exchange Department in your Regional Centre

  •  with all required documents.
  • The Companies Act of 2013 requires a newly formed business to register.
  • RBI guidelines provide the required documentation to file a fully-fledged money changer license.
  • You must send the FFMC, other documents, and your application to RBI.
  • Reply in the event of a new submission.
  • The RBI will keep in touch with you up until your license is obtained.
  • An RBI inspection can lead to a complete money lending license.

The documents required to be a fully-fledged money changer

To obtain full money changer licensing, you will need to provide the following documentation:

  • A certified copy of the Certificate of Incorporation or the Commencement of Business.
  • The Association Memorandum is accompanied by a formal letter that notes the clause about currency exchange.
  • The reports about banks can be found.
  • A recent balance sheet and the certificate of net-owned funds from the Statutory Auditors. We have audited financial accounts from the three previous years.
  • A declaration that DOE/DRI did not investigate the company.
  • Details on the company’s size, nature and location.
  • Please provide the details if you have previously applied for an FFMC/RMC Licence.
  • Board Resolution for Full-Fledged Money Changers to Apply and Engage in Money Exchange Activities.

How much can an authorised money changer exchange?

To be able to apply for an Indian license as a fully-fledged money changer, you will need to meet specific criteria.

  • DoE/DRI has opened an investigation against a company’s promoter/director/directors or their directors.
  • Reserve Bank of India decisions are binding for a FFMC License approval.
  • When submitting your application, attach a photocopy of the Shop and Establishment registry, any rental invoices and documentation.
  • The new business must be operational within six months after the Reserve Bank of India has issued the license. This information must be sent to the RBI Regional Office in the relevant area.

How do you renew the license for a full-fledged money changer?

The FFMC is valid for the duration of the application or until it expires. An expired license cannot be renewed.

What is the correct procedure to create a proper book of accounting?

India requires these entities to keep records of money-changing activities.

Forms Description
FLM 1 Summary of the day and balance book for foreign currency (Notes/coins)
FLM 2 Daily summary and balance sheet for traveller’s cheques
FLM3 Register of Foreign Money Purchases Made by the Public
FLM 4, Register for Foreign Currency Notes/Coins purchased from Authorized Dealers and Money Changers.
FLM 5 Registration of the sale to the public of foreign currencies coins and notes as well as travellers’ cheques in foreign currencies
FLM 6 Registration of sales by Money Changers/Assignees
FLM 7, Registry of Travelers’ Cheques Surrendered/Authorized Money Changers/Exported

All documentation and account balances should always remain current. Transactions that do not involve money exchange are exempt from being combined.

What are the RBI cancellation policies?

Reserve Bank of India can revoke the license of an AMC at any time if :

  • The public interest or
  • AMC has violated or not complied with any of the provisions or rules in the Foreign Exchange Management Act, 1999 or the Rules and Regulations or Notifications.
  • Reserve Bank Reserves the Right to Withdraw the Authorisation of Any Office for Violation of Statutory or Regulatory Provisions
  • The Reserve Bank may revoke a license or add conditions at any time.

A license can be acquired from a licensed money changer.

There are two prerequisites to obtaining a driver’s license.

  • An entity that is physically located
  • The minimum net fund owned is ten lakhs Indian rupees.

Only when the conditions are met will a franchise agreement be executed. The agreement specifies the time that FFMC has determined.

Franchise Agreement: Features

  • The franchisees’ names should be displayed first, followed by their franchisor’s name, and finally, the rate. These rates will be in line with those charged daily by FFMC.
  • A franchisee must return the foreign currency they purchased within seven days following the date of purchase.
  • Each franchisor shall maintain a record of its transactions.
  • Franchisers are required to inspect franchisees in person at least once a year.


1. How can I acquire a licensing license for a current FFMC?

Form RMCF is required for all franchise applications. All franchise applicants must complete the RMCF form.

2. Why should franchisees follow due diligence obligations?

When performing due diligence, franchisees should take into consideration these factors.

  • Franchisees describing their businesses
  • Verify the minimum net owned funds as specified;
  • Certification of Local Franchisees and local registration
  • Check the location of the Franchisee’s Office, where the money exchange activity is restricted.
  • Franchisee has received a Certificate for Authorization from Local Police Authorities;
  • Statement of Non-Participation in Criminal Cases
  • Create a copy of the PAN (Franchisee or Directors)
  • Photographs in passport size of Directors, shareholders, and KMP of franchisees;
  • You must visit the site yourself at least one times per year

Money changers: Reporting requirements

  • Each entity must provide a monthly financial statement (FLM8) detailing any sales or purchases of foreign exchange to the RBI departments concerned by the 10th day after the beginning of the subsequent month.
  • After the last month of the year’s calendar, RBI regional offices receive monthly statements detailing receipts and purchases exceeding US $10,000.
  • The regional office of RBI will receive a quarterly report pertaining to Foreign Currency Accounts that are held in India with AD Category I Banking;
  • AMC must issue a comprehensive Annual Statement within a week of year-end. It should detail how much the AMC has written off.

3. What is the procedure for granting a license to open a new branch?

The RBI must approve the establishment of an extra money-changing branch. If you want to establish an additional money-changing branch, the RBI will need your written permission.

Documents required for setting up an additional branch:

  • Certificate of Statutory Accountant, accompanied by a certified copy of audited accounting specifying the position of net-owned funds.
  • Bankers Report
  • A declaration declares that no proceedings are pending by the Directorate of Enforcement (DoE), Directorate of Revenue Intelligence (DRI), or any other enforcement authority against the applicant, its directors, or even the director.
  • A declarative statement that confirms that the KYC/AML/CMT framework has been implemented effectively;
  • Declaratory statements regarding internal controls, including external/internal audit
  • Proof that the branch office is in the same place as their parent.

4. What is a full-fledged license for currency exchange?

Reserve Bank of India has issued a license that allows an individual to make money exchange. The Foreign Exchange Management Act of 1999 mandates that all participants comply with rules and regulations.

5. How do I get a license to exchange money?

Companies Act of 2014 requires a company to request an FFMC License to register as a registered business at the Registrar of Companies. The company must state in its object clause that currency exchange is its primary business.

6. Is an entity permitted to carry out activities that do not require a permit?

An organisation that wants to change money must possess a license as a money changer.

7. Do banks qualify to apply for an official license as money exchangers?

It is possible for such organisations that are not banks to obtain the full-fledged money changers license. Banks are the only authorised dealers in

Category 1. While other organisations can apply for

Category 2. Wherever an enterprise is located in India, it must send a licensing request to the Reserve Bank of India.

8. When is the expiration date of my driving license?

Annual renewal is required for your license.

9. What activities can franchisees carry out?

In addition, the applicant will not be allowed to do activities in Category II.

10. Which committee must approve the license of a money changer?

The RBI-empowered committee will provide the approval needed to become a licensed money changer. If the RBI approves the application, the decision becomes binding.


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