FFMC License

An Overview of FFMC Licence Renewal Process in India

FFMC Licence Renewal

The agencies involved in the currency conversion business are known as Full Fledged Money Changers (FFMC License). According to Section 10 of the Foreign Exchange Management Act, 1999, a company can undertake money-changing activities only after the grant of the FFMC Licence renewal.  FFMC licence holders are permitted to provide necessary foreign exchange (forex) services.  

An application from an FFMC Licence renewal shall be made two months before expiry of the licence or such other period as the prescribed by the Reserve Bank of India. Where an application for licence renewal is submitted, the licence shall continue in force until the date on which the licence gets renewed or the application is rejected.  An application from an FFMC Licence renewal shall not be made after expiry of the licence.

Different types of FFMC Licence

There are 3 types of licences that are issued for the business of money exchange:

  • Authorised Dealers Category -I Banks (AD Category–I Banks);
  • Authorised Dealers Category-II (ADs Category–II) and;
  • Full-Fledged Money Changers (FFMCs).

Guidelines for FFMC Licence Renewal

The following requirements for applying for Licence Renewal for existing FFMCs are listed below:

  • Registered Office: An FFMC Licence holder should be a company registered under the Companies Act, 1956/ Companies Act, 2013 with a registered office within the jurisdiction of the respective Regional Office of the Foreign Exchange Department.
  • Original FFMC License issued earlier.
  • Net Owned Funds: The requirements for the net owned fund are as follows:
CategoryMin. Net Owned Funds
Single branch FFMCRs. 25 lakhs
Multiple branch FFMCRs. 50 lakhs

It is necessary for all FFMCs to submit their annual audited balance sheet to the respective Regional office of the Reserve Bank of India for verification of their Net Owned Funds along with the latest audited accounts with a certificate from the Statutory Auditors regarding the status of Net Owned Funds as on date of the Balance Sheet.

READ  Who are Authorised Money Changers?

FFMCs are mandated to maintain the minimum Net Owned Fund at any given time; if failure to maintain the minimum level of Net Owned Fund is reported. Then FFMC licence Holder is required to bring it to the notice of the Reserve Bank of India immediately, along with a detailed time-bound plan for restoring the Net Owned Funds to the minimum required level.

  • KYC / AML / CFT Policy Framework: A copy of an existing company’s KYC / AML / CFT policy framework must be submitted to the concerned authorities. A detailed Know Your Customer (KYC) /Anti-Money Laundering Standards (AML) /Combating of Financing of Terrorism (CFT) and obligations under Prevention of Money-laundering Act (PMLA) , guidelines issued by Reserve Bank of India, Department of Banking Regulation (DBR) must be followed in letter and spirit.
  • Internal Control and Concurrent Audit System help adhere to prescribed systems/procedures/prevention and timely detection of irregularities and lapses.  (submitted as per format).
  • Shop & Establishment licence shall be duly updated.
  • List of directors and shareholders with the details of company shareholdings (As per prescribed format).
  • Confidential Report: A confidential report prepared by the banker of an applicant (FFMC Licence Holder) must be submitted before the authorities in a sealed cover.
  • ‘Fit and proper criteria for FFMC Licence Renewal

The FFMC company forms a Constituting Nomination Committee to initiate a process of due diligence to ascertain the suitability of the person for an appointment or holding the appointment as a director on the Board, by accessing the qualification, years of experience, performance record, integrity and other relevant ‘fit and proper’ criteria. The applicant should not exceed the age of 70 years(relaxation will be granted in some instances), and should not be a sitting Member of Parliament /Member of Legislative Assembly of States/ Member of Legislative Council of States.

READ  A detailed guide on Regulatory Framework of FFMC License

A declaration must be submitted to the effect that no proceedings have been initiated or pending before the Directorate of Enforcement / Directorate of Revenue Intelligence or any other law enforcing authorities against the applicant company or its directors.

Benefits of FFMC Licence Renewal

  • An FFMC Licence Holder ensures the sale facilities and foreign exchange services to international tourists visiting India;
  • FFMC licence holder offers encashment certificates in case of the Travellers Cheques, Foreign Currency Notes from the Non Residents and Residents;
  • An FFMC Licence holder is eligible to sell foreign currency for:
    •  Private Visits,
    •  Business Visits, and
    • Forex Prepaid Card;
  • An FFMC Licence Holder deals in coins, travellers’ cheques, and foreign currency at the current foreign exchange rate.


The FFMC Licence renewal process is similar to applying for the FFMC licence for the first time. FFMC Licence must be renewed annually by submitting the renewal application form with relevant documents to the Reserve Bank of India. RBI has also issued regular directions for registration of FFMC Licence and renewal. FFMC Licence holders must adhere to the AML compliance for Combating Financing of Terrorism (CFT) and Money Laundering. The business organisation should comply with the obligation made by RBI, even after holding the FFMC license to avoid legal penalties.

Read our Article: FFMC Licence Requirements in India

Trending Posted

Get Started Live Chat