What are the Vital Documents Required for FFMC License in India?

Before we go through all the essential documents required for FFMC License, it is vital for you to understand the meaning of FFMC. An FFMC stand for Full Fledged Money Changer is cited as certified money changers incorporated under the Foreign Exchange Management Act. It generally delivers services regarding foreign security and foreign exchange. As per the Foreign Exchange Management Act, any company that aims to start an FFMC business required to get an FFMC Registration from the Reserve Bank of India (RBI). Otherwise, the company will deal with strict penalties as prescribed under the Foreign Exchange Management Act. Scroll down to check more information concerning the vital documents required for FFMC License in India.

Performing Structure for FFMC Registration in India

FFMC Registration is a type of official permission that allows the companies to undertake the forex currency exchange business or money changing activities. According to the FEMA Act (Section 10 (1)), 1999, AMC (Authorised Money Changers are the companies incorporated under the Reserve Bank of India. Such AMCs are also regarded as the Full Fledged Money Changers. Performing the law framework is the most challenging task for the Non-Banking Financial Company. According to the above-mentioned law, no companies are eligible to undertake the business for forex currency exchange in the absence of an appropriate FFMC License.

RBI Guidelines for the Issuance of FFMC License

Following are the conditions that should be fulfilled while applying for FFMC License in India:

1. The candidate should be a company which is registered under the Companies Act, 1956^[1] or 2013;
2. The NOF (Net Owned Fund) of an entity should be as follows:
3. One branch FFMC: Minimum Rs. 25 lakh.
4. Multiple FFMC Branch: Minimum or at least Rs. 50 lakh.

Essential Documents Required for FFMC License in India

Following are some vital documents required for FFMC License:

1. Submit a copy of COR (Certificate of Registration) & Certificate of Beginning of Company’s business;
2. Submit a sealed report prepared by the banker of the candidate;
3. Submit MOA (Memorandum of Association) and AOA (Articles of Association) of the company telling the rules for executing money changing tasks or a proper modification with the similar effect;
4. A declaration declaring that no legitimate proceeding is pending against the company commenced by the DoE (Directorate of Enforcement) or DRI (Directorate of Revenue Intelligence) or any other legal bodies;
5. Submit the copies of the audited balance sheet and Profit & Loss Account of the company for the previous three years prior to the application date for the license;
6. Submit a Board Resolution copy for executing forex trading activities in India;
7. A declaration indicating that the company has deployed the significant policies concerning Combating the Financing of Terrorism (CFT) or Know Your Customer (KYC) or Anti-Money Laundering (AML) before commencing the business-related activities.

Important Note on Arrangement of Documents Required for FFMC License in India

A candidate looking for NBFC Registration should arrange and prepare all the documents as mentioned above in this blog without any discrepancies. Once you arrange all the documents required for FFMC License, and then the candidate will have to submit a complete application for FFMC Registration to the regional office of the Reserve Bank of India. Always remember that the documents mentioned above will go to the office along with the application. Once the RBI receives the application, they will examine the same of the candidate and the director on the basis of the correct and fit criteria. If they fail to fulfil the criteria, then the RBI will decline the registration application. But, if the application has consented on the off chance, then the Reserve Bank of India will issue the COR (Certificate of Registration) within 2 to 3 months.

What are the Significant Points Concerning the Documents Required for FMMC License in India?

• AOA (Articles of Association) is a statutory document that presents the purpose of the company and its regulations concerning its operations. The documents indicate how the operation or activity should be carried out within the company, comprising the handling & drafting of the financial records;
• MOA (Memorandum of Association) shows the organisation’s licence. It is a legitimate document that is drafted at the time of the initial stage of the company to show its bonding with the shareholders, and it is displayed the objectives for which the organisation has been established. The working protocols of the company cannot go far the vision of the MOA;
• A Board Resolution is a documented edition of the decision takes by the Board of Directors of a company. All the vital decisions made by the Board of Directors of a company are authorised bypassing the resolution.

Activities Executed by FFMC in India

FFMCs are accountable to execute the following tasks:

1. FFMCs and their franchisees are responsible for purchasing traveller’s  coins, cheques, or notes from the non-resident and resident;
2. Full Fledge Money Changes can go for the franchise agreement to undertake the business of restricted money exchange like the conversion of overseas currency notes into national or domestic currency at their ease for undertaking the limited money changing business which includes the conversion of traveller’s coins, or cheques, foreign notes into Indian Rupees;
3. An FFMC is allowed to sell overseas exchange for the intentions like Private or Business visits and Forex prepaid card;
4. Full Fledge Money Change has permission to sell national currency to foreign visitors against international credit and debit cards and reply quickly to get the reimbursement through normal banking channels.

Conclusion

The candidate might not face any hurdle in getting the Certificate of Registration if it obeys the information mentioned above correctly. A Non-Banking Financial Company is a form of business that comes with ample legitimate and regulatory compulsions. Companies that aim to pursue such business require taking the part of documentation seriously because the chance of application revocation is quite high here due to rigid compliances.

Read our article:Benefits of FFMC License from RBI: A Complete Guide