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Full-Fledged Money Changer (FFMC) license Renewal Process in India

Shivam Kumar

| Updated: Jun 01, 2022 | Category: FFMC License

Full-Fledged Money Changer (FFMC) license Renewal Process in India

Full-Fledged Money Changers (FFMC) are businesses involved in trading foreign exchanges like forex currencies, etc., with prior approval from the Reserve bank of India. The Reserve Bank of India authorises several entities that can deal in foreign exchange under section 10 of the Foreign Money Exchange Act, 1999. These entities are known as Authorized Money Changers or AMCs.

How to apply for FFMC License Renewal Process?

The recognised AMCs have to apply the FFMC License Renewal Process to the Regional Office of Reserve Bank under whose jurisdiction registered office of Applicant Company falls in the prescribed format along with required documents and with the prescribed fees as mentioned in the RBI Notifications.

Full-Fledged Money Changer (FFMC) license Renewal Process in India

Full-Fledged Money Changers (FFMC) are businesses that are involved in trading foreign exchanges like forex currencies, etc., with prior approval from the Reserve bank of India. The Reserve Bank of India authorises several entities that can deal in foreign exchange under section 10 of the Foreign Money Exchange Act, 1999[1] . These entities are known as Authorized Money Changers or AMCs. It is mandatory for the FFMC/non-bank AD Category-II to apply for FFMC License FFMC License Renewal Process within the stipulated time frame as RBI will reject the application after this duration.

Who are the Authorised Money Changers in India?

There are three types of AMCs in India:

Authorised Dealer (AD): Category: I  Banks

Authorised Dealer (AD) Category: II Banks

Full-fledged Money Changers are also called as FFMCs.

Activities that can be undertaken by FFMC

FFMC can enter into a Franchise agreement for carrying Restricted Money Changing business

FFMC or their Franchisees may freely trade into foreign currency exchange from Indian residents and foreign tourists/visitors against International Credit Cards/International Debit Cards through normal banking channels.

FFMC Franchisee

Reserve Bank of India (RBI) has authorised FFMCs to enter into Franchise Agreements for the purpose of carrying on Restricted Money Changing businesses. These entities can be any type who should be a resident in India. They should have a minimum Net Owned Funds of Rs.10 lakhs and can undertake only restricted money changing activities according to the master circular issued by RBI.

Validity of FFMC License

The Full-Fledged Money Changer (FFMC) License is valid only for a duration of one year. Therefore, two months before the expiry, the license holder must apply for FFMC License Renewal Process. No new application for FFMC License Renewal Process shall be made after the expiry of the license, i.e. after one year. The FFMC Company will continue to operate till the time the company receives the rejection notice from the concerned authorities. However, the said company will not be eligible to furnish application for FFMC License Process after the expiry date.

How to apply for FFMC License Renewal Process?

The recognised AMCs have to file an application for the FFMC License Process to the Regional Office of Reserve Bank under whose jurisdiction the registered office of the applicant company falls in prescribed format along with required documents and with the prescribed fees as mentioned in the RBI Notifications.

The time limit for applying for the FFMC License Renewal Process

An FFMC/non-bank AD Category-II has to file for FFMC License FFMC License Renewal Process two months before the expiry of the license or such other period as the Reserve Bank may prescribe. Where an application for FFMC License Renewal Process is submitted within the time limit, the licensee shall continue its operation until the date on which the license is renewed, or the application is rejected. No FFMC/non-bank AD Category-II can file for FFMC License Renewal Process after the expiry of the license, i.e. after one year. 

Consequences for Non-Adherence with the time period for FFMC License Renewal Process

If the FFMC/non-bank AD Category-II is not able to submit the application for FFMC License FFMC License Renewal Process within the stipulated time frame, the RBI will reject the application whenever filed. However, the said company can continue its operations till the time it receives the rejection notice from the concerned authorities.

Documents required for FFMC License Renewal Process

An FFMC/Non-bank AD Category-II should submit the documents for FFMC License Renewal Process.

Copy of the latest audited accounts sanctioned from the Statutory Auditors regarding the position of Net Owned Funds.

Confidential Report issued by the applicant’s banker in a sealed cover.

A declaration that no criminal or civil proceedings have been initiated by/ pending with Directorate of Enforcement / Directorate of Revenue Intelligence or any other law enforcement against the company or any of its directors.

All the records of the KYC/AML /CFT policy framework are present in the company.

A  Shop and Establishment License or any other documentary evidence that can be required by RBI.

Eligibility to apply for FFMC License Renewal Process

For applying for FFMC License Renewal Process, an FFMC/Non-bank AD Category-II must have to consider the following eligibilities:

The applicant has to be a company registered under Companies Act, 1956 of the Companies Act 2013

The company should maintain a minimum Net Owned Funds of INR 25 lakhs for a single-branch FFMC license and INR 50 lakhs for a multiple-branch FFMC license.

The object clause of Memorandum of association (MOA) of company must reflect the activity of money changing as the objective of the company.

There must be no criminal or civil proceedings have been initiated by/ pending with Directorate of Enforcement / Directorate of Revenue Intelligence or any other law enforcement against the company or any of its directors.

Conclusion

Authorised Dealers (AD) play an important role in managing the Foreign exchange transactions in India. These FFMC companies are involved in dealing with foreign exchanges Indian residents as well as foreign tourists/visitors against International Credit Cards/International Debit Cards through normal banking channels. They can enter into Franchise Agreements for appointing several franchisees who carry on the Restricted Money Changing businesses as their primary objectives. This license is valid only for the duration of one year, for which the license holder must apply for the FFMC License Renewal Process prior two months before the expiry of the license. No new application for FFMC License Renewal Process shall be made after the expiry of the license, i.e. after one year.

Read Our Article: RBI Guidelines For FFMC License

Shivam Kumar

Shivam is an enthusiastic and intellectual Legal Researcher. He has studied Law, and after practicing as an Advocate, his interest towards writing drew him to choose a different career path and start working as a Legal Researcher, where he plans to use his acumen to curate informative content.

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