Renewal of Full Fledged Money Changer License: A Complete Guide

The Authorised Money Changers or AMCs are the companies that have obtained FFMC (Full Fledged Money Changer License) under section 10 of FEMA 1999^[1] from RBI. Further, in India, an AMC may register itself either as a Full Fledged Money Changer or Restricted Money Changer (RMC). However, it shall be considerate to note that the said license remains valid for the period specified by RBI. That means to obtain Renewal of Full Fledged Money Changer License, one needs to again file an application with the Apex Bank.

Concept of Authorised Money Changers

The term AMC or Authorised Money Changers are the business entities that are engaged in the sale and purchase of foreign currencies and coins from both residents and non-residents. Further, it shall be considerate to note that these entities have been granted a license by the Reserve Bank of India. That means the apex bank has full control over the business affairs of authorised money changers.

If in case any person carries out the activities of money changer without acquiring a valid license, then, in that case, the same will be penalized by the RBI. Also, the other name for these entities is Full Fledged Money Changers.

Significance of FFMC License

The main reason behind the grant of FFMC license is to remove the difficulties and hardships faced by the tourists and foreign visitors. As a result, RBI has granted FFMC Registration to certain specific hotels and firms as well.

Permitted Activities for Renewal of Full Fledged Money Changer License

The activities permitted by the RBI for the renewal of Full Fledged Money Changer License are as follows:

1. To enter into Franchise Agreement with the Apex Bank to carry out restricted business activities;
2. To buy and sell foreign currencies from both resident and non-resident;
3. To sell Indian Currency against the International Debit or Credit Card of the visitors by using normal banking channels;
4. To sell Indian Currency against the following:
5. Business Visits;
6. Forex Pre Paid Cards;
7. Private Visits;

Types of Authorised Money Changers

The different types of Authorised Money Changers prevalent in India are as follows:

1. Full Fledged Money Changers;
2. Authorised Money Changers I – Banks;
3. Authorised Money Changers II;

Eligibility to Obtain Renewal of Full Fledged Money Changer License

The eligibility to obtain renewal of full fledged money changer license can be summarised as:

1. Must be registered as a private limited company under the provisions of the Companies Act 2013;
2. Must have at least Rs 25 lakhs as Net Owned Funds to operate a single branch;
3. Must have at least Rs 50 lakhs as Net Owned Funds to operate multiple branches;
4. The object clause of the MOA must declare the intention to carry out the money changer activities;
5. Must not have any pending or previous civil or criminal case either with DRI (Department of Revenue Intelligence) or with DOE (Directorate of Enforcement);

Documents Required for Renewal of Full Fledged Money Changer License

The documents required for renewal of full fledged money changer license:

1. A copy the Original License issued;
2. A copy of the Latest Audited Financial Statements and Balance Sheet;
3. A copy of the Statement certified by Practising Chartered Accountant concerning NOF of the company;
4. Confidential Report from Bank in a Sealed Cover;
5. A duly Signed, Dated, and Stamped Declaration on Company’s Letterhead concerning the Non-involvement in DRI (Department of Revenue Intelligence) cases;
6. A duly Certified Certificate from Practising CA regarding the compliance of Internal Control;
7. A duly Certified Certificate from Practising CA regarding the compliance ofAnti Money Laundering Guidelines;
8. A duly Certified Certificate from Practising CA regarding the compliance ofConcurrent Audit System;
9. A copy of the Shop and Establishment License;
10. A copy of KYC Policy (Know Your Customer) based on KYC Guidelines provided by RBI;
11. A Certificate for Fit and Proper Criteria, together with the details and particulars of all the Directors;
12. A Complete List of Shareholders, together with the details of their Shareholdings;
13. Details concerning the Franchisees and Branches of the Company;

Process for Renewal of Full Fledged Money Changer License

To apply for the renewal of full fledged money changer license, the directors of the company requires to submit an application for the same one month prior to the date of expiry of such license.

If in case, the directors of the company fail to submit the application for renewal of full fledged money changer license on time, then, in that case, the same will be rejected whenever filed.

However, it shall be taken into due consideration that the previous license will remain valid till the time company receives a rejection from the authorities. Also, a company will not be qualified to furnish an application for the renewal of full fledged money changer license after the expiry of the original license.

Conclusion

In a nutshell, every company who wish to start dealing in forex transactions needs to acquire FFMC Registration from RBI on a compulsory basis. The said license remains valid for the period specified by RBI.

That means the license holder needs to apply for the renewal of full fledged money changer license after the expiry of the original license. However, the same involves a lot of intricate and complex documentations. Therefore, it is advised to consult experts for the same.

At Swarit Advisors, our RBI and FEMA professionals, who are having vast previous experience, are to solve out all your doubts and cater to all your needs.

Also, Read: Requirements to Avail of New FFMC License: A Complete Guide