FFMC license is an essential document for entities that deal with foreign exchange of foreign insecurities. The duty of issuing the license and maintaining watch over the Full-Fledged money Changers – the licensees – is done by the Reserve Bank of India.
As per the rules of the government, an Authorized Money Changer is the only one allowed to partake in currency exchange business. To become an authorized money changer, one has to obtain FFMC license online.
In this blog, we are going to give you answers to the following:
- What is an FFMC license?
- What are the types of Authorized Money Changers?
- What is the eligibility requirement for obtaining the FFMC license?
- What is the procedure to obtain FFMC license online?
- What are the documents you require?
What is an FFMC license?
FFMC License, full form: Full Fledged Money Changer License. FFMC license, meaning an authorization to conduct foreign exchange activities such as currency exchange, foreign trading etc using an FFMC company as a base. The license is issued by the Reserve Bank of India and it’s only issued to authorized money changers.
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These authorized money changers have certain types.
What are the types of Authorized Money Changers?
Presently, there are three categories of Authorized Money Changers:
- Authorized Dealers Category I
- Authorized Dealers Category 2
- Full Fledged Money Changers
Regardless of the category, the full-fledged money changing activities are restricted to the following points:
- Get into a franchise agreement to carry out money changing activities
- Buy foreign coins, currency notes
- Sell foreign exchange for business visits, forex prepaid cards and other private visits
- Sell Indian currencies to tourists and foreign currencies of Indians who want to go abroad.
What is the eligibility requirement for obtaining FFMC License?
Following are the points that you need to follow to become eligible to obtain FFMC license:
- Have an incorporated business entity under the Companies Act 1956 or 2013
- Have a net worth of INR 25 Lakh to open a single FFMC branch
- For multiple FFMC branches, have a net worth of INR 50 lakh
- Have no criminal case filed against you in department of revenue intelligence or department of enforcement
- Clearly mention in your MOA of your company that money changing business is what you do.
What is the procedure to obtain FFMC license online?
Following is the procedure you have to follow to obtain FFMC license in India to become an authorized money changer:
- Get all the essential documents required to file the application
- Get the court signed declaration that all your FFMC company members meet the fit and proper criteria
- File the online FFMC license application and upload the essential documents
- After assessment and if the RBI is satisfied, you’ll be issued an FFMC license within 2 to 4 months.
The license allows you to operate as an authorized money changer for 5 years. Afterwards, you have to file the application for FFMC license renewal.
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Documents that are essential for FFMC license application?
Following is the list of documents needed by the RBI to process your FFMC license application:
- Copy of the Certificate of incorporation of your company
- Memorandum of Association and Articles of Association of your company
- A separate printout of the clause that states that “money changing activities” is your company’s objective
- Net worth certificate
- Audited balance sheet
- Description of nature of FFMC business.
An FFMC license can be quite profitable for an enterprising startup owner like yourself. Engage in foreign exchange business of your size by getting in touch with Registrationwala.