Discover the List of Documents Required for FFMC License in Delhi

Before we discuss the list of documents required for FFMC License in Delhi, it is important for us to know the definition of FFMC. FFMC stands for Full Fledged Money Changer, and it is stated as authorized money changers registered under 10 (1) of the Foreign Exchange Management Act. Generally, this license offers services related to foreign exchange and security. According to the Foreign Exchange Management Act, any entity wants to start an FFMC business is required to avail of an FFMC Registration from RBI (Reserve Bank of India). Else, the entity will oppose severe penalties as suggested under the Foreign Exchange Management Act. In this blog, we will discuss the list of documents required for FFMC License in Delhi.

Implementation Structure for FFMC Registration

Registration of FFMC is legal permission that licenses the entities to commence the business of money exchange activities or forex currency exchange. According to Section 10 (1) of the FEMA Act, 1999, AMC or Authorized Money Changers are the entities registered under RBI. These AMCs are also considered as FFMCs or Full Fledged Money Changers. Implementing the law structure is one of the most challenging tasks for Non-Banking Financial Company (NBFC). As per the law, as mentioned above, no companies or entities are allowed to accept the forex currency exchange business without a valid FFMC License in Delhi.

FFMC License categorized into three different categories:

1. AD or Authorized Dealer Category – 1 Banks.
2. AD or Authorized Dealer Category – 2.
3. FFMCs or Full Fledged Money Changers.

What are the essential documents required for FFMC License in Delhi?

Following are some vital documents required at the time of obtaining FFMC License in Delhi:

1. Submit a copy of COI or Certificate of Incorporation of the company and submit a copy of Certificate of Commencement of Business of the Company.
2. Submit a copy of MOA (Memorandum of Association) and Articles of Association (AOA) of the company defining the rules for performing money changing tasks or a proper modification with a similar effect.
3. Copies of the balance sheet which is audited by professional Chartered Accountant (CA) and Profit & Loss Account of the company for the previous three years before the application date for the license.
4. Also, submit a declaration stating that no legal proceeding is pending against the company originated by the DoE or Directorate of Enforcement or DRI (Directorate of Revenue Intelligence) or any other constitutional bodies.
5. Submit a sealed report which is prepared by the banker of the applicant.
6. A declaration stating that a company has arranged the relevant policies regarding Combating the Financing of Terrorism or KYC or AML before starting the business activities.
7. Submit a copy of board resolution for performing activities related to forex trading in India.

Arrangement of Documents

If an applicant wants to apply for NBFC Registration, they must arrange all the essential documents mentioned above without any discrepancies. Once you complete this task, the applicant must submit a complete application regarding FFMC registration to the regional office of the Reserve Bank of India. Once the application is received by RBI, then the Reserve Bank of India will examine the applicant and the director on the basis of the fit and proper criteria. In case they fail to meet all the criteria, then the Reserve Bank of India will reject the application. If the application gets approved, then the Reserve Bank of India^[1] will issue the registration certificate within two to three months.

Significant Points Concerning Documents Required for FFMC License in Delhi

Following are some critical point regarding the documents required for FFMC License in Delhi:

1. An MOA or Memorandum of Association shows the charter of an organization, and it is a legal document that is drafted during the first phase of company registration to shows its relationship with shareholders, and it’s positioned out the objectives for which an organization has been formed. The company’s working protocols cannot go further than the scope of the MOA (Memorandum of Association).
2. The AOA or Articles of Association is also a legal document that shows the purpose of the company or an organization and its rules & regulations regarding its operations. Articles of Association shows how the operation must be carried out in a company, including the handling and drafting of the financial records.
3. A Board Resolution is an acknowledged version of the decisions taken by the Board of Director of a company. All the important decisions made by the Board of Director are qualified by passing of the resolution.

What are the Various Activities Performed by FFMC?

Following are some activities performed by FFMC:

1. Full Fledged Money Changer can choose for the franchise agreement to accept the business of restricted money exchange, such as converting foreign currency into domestic currency at their suitability for undertaking the restricted money changing business, which includes the conversion of coins travellers cheque, foreign currency into Indian Rupees.
2. AFull Fledged Money Changer has permission to sell local currency to foreign visitors against foreign debit cards and credit card and respond quickly to obtain the reimbursement through normal banking channels.
3. FFMC and their franchisees are responsible for purchasing traveller’s cheque, notes, and coins from the non-resident and resident.
4. An FFMC License in Delhi is allowed to sell foreign exchange for various purposes such as private visit, business visit, and Forex prepaid card.

Conclusion

One of the most important steps during the registration process is to arrange all the documents required for FFMC License in Delhi without any of the documents as mentioned above the applicant may face the problem or its application get disapproved. Companies or entities that aim to pursue such a business need to take the documentation part seriously because the chance of revocation of application is pretty high due to tight compliance.

To overcome those difficulties, you must not falter to meet the professional who can help you out. At Swarit Advisors, you will get professional advice on different registration process.

Also, Read: Cancellation of FFMC License: Reasons for Cancellation of License