FFMC stands for Full Fledged Money Changer, and it is authorised as an organisation to buy foreign exchange from both non-residents and residents of India. And they can sell the same for both private and business travel purposes towards Individuals who are travelling abroad.
Section 10 of the Foreign Exchange Management Act (FEMA) states that authorised money changers are the only organisations in the nation that can deal in money-changing activities and offer essential foreign exchange services. We can also see that hotels and other specific corporations are registered to deal with foreign currency notes and coins, as well as traveller’s cheques, based on directives issued by the Reserve Bank of India (RBI) on a regular basis. And this has been done to make such exchanges easy for foreign travellers or tourists.
Suppose any person is found undertaking any money-changing business without holding a legitimate license issued by the RBI. In that case, they shall be held responsible and may be charged with fines or other penalties related to the provisions of FEMA.
Types of FFMC License
There are basically three types of licenses. These are necessary for any entity to obtain a Full-Fledged Money Changer (FFMC) license. The following can be understood as the same:
- Authorised Dealer Category-I Banks (AD Category-I Banks)
- Authorised Dealers Category-II (ADs Category II)
- Complete Fledged Money Changers (FFMCs).
Eligibility to Apply for FFMC License
The following can be understood as the eligibility criteria that should be satisfied before an applicant decides to apply or submit the application for the availing of the FFMC License from the concerned authority:
The organisation applying for a Full-fledged Money Changer’s License must be registered under the Companies Act, 2013, or such other Act that was in force prior to 2013.
The corporation must have a minimum net owned finance of INR 25 Lakhs towards applying for a single branch license as well as INR 50 Lakhs when applying for a multiple branch license.
iii. The object clause of the Memorandum must include the action of money changing to be pursued through the corporation.
- There should be no civil or criminal cases pending against the corporation with the Department of Enforcement or the Department of Revenue Intelligence.
- Once the company is issued with the FFMC License the corporation must kick start its business activity within a period 6 months from the date of issuance of the FFMC License and must intimate the same to the RBI duly.
Documents required for the Registration of FFMC License
For availing the company registration online and FFMC License, the following documents shall be held by the applicant:
- A copy of the Incorporation Certificate of the company issued by the competent authority.
- The Memorandum of Association and Articles of Association, comprising a provision stating the company’s intention for undertaking money changing businesses or an appropriate amendment with the same effect, shall also be held.
iii. A copy of the latest audited financial statements of the company, along with a certificate from Statutory Auditors certifying the Net-Owned Funds as on the date of Application for the License, should also be held.
- Several copies of the audited Balance Sheet and Profit and Loss Account of the company for the three years immediately preceding the Date of Application for the License, wherever applicable.
- A Confidential Report from the banker of the applicant in a sealed manner is to be obtained and held.
- Information concerning the sister or associated concerns operating in the financial sector such as Non-Banking Financial Corporations (NBFCs) should also be held and attached.
vii. A certified copy of the Board Resolution to undertake money changing business, passed, and approved.
Process for Registration
The RBI’s website can be accessed to download the application form for the FFMC License. After this, the application form should be submitted to the Foreign Exchange Department of the Reserve Bank of India at the regional centre under the jurisdiction of which the registered office of the candidate falls, along with the supporting documents specified above.
The procedure or process to be followed for getting an FFMC License would be as follows:
– An application that is filed along with the supporting documents required for the availing of the FFMC License is submitted to the concerned regional office of the Reserve Bank of India (RBI).
– The applicant company’s Director would be referred to under the “fit and proper” criteria through the RBI. And if all the details are in accordance with the requirements prescribed by the concerned provisions stated by RBI and are in satisfaction of the RBI, then at that point the Full-Fledged Money Changer (FFMC) License would be issued within a period of 2 to 3 months, from the date of submission of an application which is valid.
– Clearance, which is to be done through the Empowered Committee, is a basic requirement. The Reserve Bank of India’s decision on the subject of approval would be conclusive and obligatory.
