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FEMC Registration in Detail

FEMC Registration in Detail

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FEMC Registration in Detail

FFMC stands for Full Fledged Money Changer, and they are authorized as an organization to buy foreign exchange from the non-residents and the residents of India. And they can sell the same for both private and business travel purposes towards the Individuals who are travelling abroad.
Section 10 of the Foreign Exchange Management Act, (FEMA) states that authorized money changers are the only organizations in the nation that could deal in money-changing actions and offer essential foreign exchange services. We can also see that the hotels and specific other corporations are given registration for dealing with foreign currency notes and coins along with traveller’s cheques based on the directives which are issued by the Reserve Bank of India (RBI) on a frequent basis. And this has been done for making such exchanges easy for foreign travellers or tourists.
If any person is found undertaking any kind of money changing business without holding a legitimate license issued by RBI shall be held responsible and charged with fines or other punishments pertaining to the provisions of FEMA.

Types of FFMC License

There are basically three types of licenses. And these are necessary to be taken by any entity for working as a Full-Fledged Money Changer (FFMC License). The following can be understood as the same:

  • Authorized Dealer Category-I Banks (AD Category–I Banks)
  • Authorized Dealers Category-II (ADs Category–II)
  • Full Fledged Money Changers (FFMCs).

Eligibility to Apply for FFMC License

The following can be understood as the eligibility criteria which should be satisfied before an applicant is deciding to apply or submit the application for the availing of FFMC License from the concerned authority:
The organization applying for a Full-fledged money changer License must be registered under the Companies Act 2013 or such other act which 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.

  1. There should not be any civil or criminal case pending against the corporation with the Department of Enforcement or the Department of Revenue Intelligence.
  2. 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:

  1. A copy of the IncorporationCertificate of the company issued by the competent authority.
  2. The Memorandum of Association and Articles of Association comprising of 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.

  1. Several copies of the audited Balance Sheet and, Profit and Loss Account of the company for the three years which is immediately preceding to the Date of Application for the License, wherever applicable.
  2. A Confidential Report from the banker of the applicant in a sealed manner, is to be obtained and held.
  3. 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 Board Resolution to undertake money changing business, passed, and approved.

Process for Registration

The website of RBI can be accessed for downloading 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 domain of which the registered office of the candidate falls along with the supporting documents which were 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 at 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 is 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. And the Reserve Bank of India taking a decision in the subject of giving approval or not would be a conclusive and obligatory one.
 

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