Overview

FFMC license is mandatory in India for some entities to deal with foreign exchange or foreign securities. The responsibility of regulating the FFMC license rests with the Reserve Bank of India.

As per section 10 of the Foreign Exchange Management Act, 1999, authorized money changers are the only type of organization engaged in money changing services and offering important foreign exchange services.

FFMC license holders purchase foreign currency from Indian residents and non-residents and sell that foreign currency to foreign visitors or tourists for personal and business trips.

Hotels, along with foreign visitors as well as travelers, with specific firms, obtain registration to remove barriers and also in the direction of travelers' checks, coins and foreign currency notes as per RBI guidelines. will help.

Before obtaining the money changer license from RBI end, no one has got the right to proceed or advertise in money changing activities. If a person with unlicensed FFMC license in India will have any involvement in the business of exchange of money, the person may be subject to heavy fines as per the Act.

Types of Authorized Money Changers

Here AMC follows:

• Authorized Dealer Category-1 Bank (AD Category 1)
• Authorized Dealer Category-2 Bank (ADS Category-2)
• Full-Wealth Money Changers (FFMCs)

Advantage

• Restricted FFMC can join an authorized franchise agreement to convert restricted money-changing businesses, ie passenger checks, coins or foreign currency notes into Indian currency.
• FFMC and their franchisees are entitled to freedom to purchase coins, foreign currency notes and checks from both residents as well as travelers from non-residents.
• An FFMC has got the green light to sell foreign currency for prepaid cards, business trips and personal trips.
• FFMC is authorized to sell Indian currency against its international debit / credit cards to tourists from different countries.

Eligibility criteria

• Entities applying for FFMC license in India should be registered under the Companies Act 1956 / Companies Act 2013.
• To apply for a single branch, the corporation must have a minimum net worth of Rs 25 lakh, and to apply for multiple branch licenses, the entity must have Rs 50 lakh.
• The name of the entity should not be involved in any civil or criminal case. The Revenue Intelligence Department should not hold any criminal record against the company.
• After obtaining FFMC license, the unit should continue its business within six months of the date of issue of license.
• There should be sufficient money exchange activity mentioned by the company in the item clause of the memorandum.

Required documents

Here, we are talking about the relevant documents that will be submitted for obtaining online FFMC license in India

• A copy of the certificate of incorporation of the company.
• Copy of Memorandum with Articles of Association which covers the provisions for starting a currency exchange business.
• Latest audited financial statements i.e, Balance Sheet, as well as Profit & Loss Account for the immediate three years, certified by the statutory auditor.
• Information related to the details of any sister or related entities working in the financial sector such as NBFC.
• It is mandatory for the applicant's bank to provide a duly sealed confidential report.
• One of the declarations states that the Board of Revenue Intelligence (DRI) / Board of Enforcement (DoE) or other legislation that imposes officers on behalf of the applicant company and directors.
• A certified board resolution copy for conducting business related to money exchange.

Servzone Procedure

• Call us or raise a question, if any.
• Our well experienced professionals will understand what you need and give suggestions according to you.
• For FFMC license, we will collect and fetch information and related documents.
• We will assign the work to one of our dedicated specialists, and you will be assisted throughout the process.

Authorized Dealers Role and Responsbility

Authorized money dealers and Authorized money changers are known for playing a crucial role in Forex transactions. Banks get the authorization in the form of licenses to deal in foreign exchange in order to carry out foreign exchange transactions in the geographical ends of India. Several financial institutions have also received the authorizations to engage in foreign exchange transactions connected with their primary business activity.

Benefits

• Full Fledged Money Changer is capable of providing sales facilities for foreign exchange.
• When asked for purchases of coins, foreign currency notes, and Travelers' cheques from residents and also from non-residents, FFMC is likely to issue a certificate of encashment.
• Taking in and taking out of the foreign exchange is possible through the support of FFMC.
• FFMC may pull off those transactions that are concerned with Travelers' cheques, coins, and foreign currency notes at rates of exchange in alignment with the rates prevailing in the market.

Procedure for FFMC license

Only those corporations have the right to obtain FFMC licenses in India which comply with licensing requests. According to the Reserve Bank of India, the process of obtaining FFMC license in India is explained by Step

• Provide all the details in the application for FFMC license and submit the detailed application to the concerned Regional Office of Foreign Exchange Department of Reserve Bank of India.
• Investigation of Director of Reserve Bank of India Director Company & quot; Fit & amp; The norms set by the Reserve Bank of India & quot; If everything goes as per RBI demand and the regulatory body is satisfied, the FFMC license will be issued within a period of 2 to 4 months.
• The right of sanction rests with the decision of the Reserve Bank of the Empowered Committee. Approval will be final as well as mandatory.

Approval conditions

After obtaining the license, full funding meets the following requirements

• Before starting a business, the corporation is required to submit a copy of the registration under the Shops and Establishments Act, or even a copy of documentary evidence such as a lease agreement, to the concerned regional office of the Reserve Bank Is copied. Rent receipt.
• Within six months of issuing the license, the FFMC should go for the start of its business venture.
• From time to time, RBI checks their activities which should be as per RBI guidelines.
• At each of its commercial locations, they have to present a copy of the money conversion license issued by RBI.
• FFMCs must set the concurrent accounting system in motion for all transactions made so far.
• Another essential point which the FFMC should consider is that they have to submit their annual audited balance sheet to the concerned Regional Office of the Reserve Bank of India.

Renewal

The company should make an application for renewal of the full-fledged money changers license one month before the expiration date of the license. After the expiration of the license, the application for renewal of the money changers license is of no use as there can be no reinstatement.

Documents and records maintenance

In relation to its money changing transactions, FFMC should maintain the following register of activities

Description of

Balance Book and

1- Forex notes / coins in the form FLM 1

2-form FLM 2 store travelers check

Register of

• Form FLM 3 contains information related to the purchase of foreign currencies from the public.
• All purchases of notes, foreign currency, coins from authorized money changers and authorized dealers in Form FLM 4.
• Check the details of sale of foreign currency notes / coins and travelers to the public in FLM 5 form.
• Register of sale of coins and foreign currency notes to foreign banks / authorized dealers / full fledged money changers in Form FLM-6.
• Form FLM 7 includes passenger dealers who surrender to authorized dealers or authorized money changers.

Criteria Reserve Bank of India exercise its rights to revoke a license granted to any FFMC?

As RBI has the right and authority to revoke FFMC license in India, if RBI can be revoked to ensure that

• It is in public benefit
• FFMC has failed to act as per the provisions of Foreign Exchange Management Act, 1999

A Conclusion description on the franchise

RBI has authorized another intermediary to trade in foreign currency, ie agents and franchise. To deal with money conversion operations, Authorized Dealer Category-1 banks, Authorized Dealer Category-2, and FFMC can appoint their own agents as well as franchisees. Following are the key points related to this

• Authorized Dealer Category - 1
• AD Category-2, All Banks and
• The Reserve Bank of India has allowed the FFMC to put its feet in franchise agreements to fulfill the objective of starting a money converting business. If a person intends to choose a franchise of any AMC, that person must enter into a franchise agreement before doing so.

About this, following are the main points

• Any entity with a place of business can be a franchise.
• A minimum net ownership of Rs 10 lakh is required for an entity.
• The franchise can only do business that deals with restricted money conversion.
• A franchise agreement must be agreed between the parties.
• Franchisees should find out the name, exchange rate of their franchisor, and indicate to them prominently in their offices the purchase of foreign currency.
• The franchise will surrender the foreign currency it had purchased to its franchisor within a period of only 7 days, the counting will begin from the date of purchase.
• It is the franchise's responsibility to track and manage the current appropriate transaction records.