{"id":2798,"date":"2021-02-27T06:20:03","date_gmt":"2021-02-27T06:20:03","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=2798"},"modified":"2021-02-27T06:20:06","modified_gmt":"2021-02-27T06:20:06","slug":"benefits-of-ffmc-license-from-rbi","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/","title":{"rendered":"Benefits of FFMC License from RBI: A Complete Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Due to a sudden increase in the foreign trips, the\noption to have a money changer business is very much in trend. Any entity or an\nindividual who wants to deal in Money Exchange activities needs to obtain FFMC\nLicense from RBI. The term FFMC stands for <strong><a href=\"https:\/\/swaritadvisors.com\/ffmc-license\" class=\"text-primary\">Full Fledged Money Changer\nLicense<\/a><\/strong> and is granted based on the provisions of section 10 of FEMA\n1999. In this blog, we will cover the concept and benefits of FFMC License from\nRBI.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a54e63a2477e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a54e63a2477e\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Concept_of_Full_Fledged_Money_Changer_License\" title=\"Concept of Full Fledged Money Changer License\">Concept of Full Fledged Money Changer License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Different_Types_of_AMC_License\" title=\"Different Types of AMC License\">Different Types of AMC License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Regulatory_Framework_for_Authorised_Money_Changer_License\" title=\"Regulatory Framework for Authorised Money Changer License\">Regulatory Framework for Authorised Money Changer License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Conditions_to_Avail_Benefits_of_FFMC_License_from_RBI\" title=\"Conditions to Avail Benefits of FFMC License from RBI\">Conditions to Avail Benefits of FFMC License from RBI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Permitted_Activities_for_Money_Changers\" title=\"Permitted Activities for Money Changers\">Permitted Activities for Money Changers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Documents_Required_to_Avail_Benefits_of_FFMC_License_from_RBI\" title=\"Documents Required to Avail Benefits of FFMC License from RBI\">Documents Required to Avail Benefits of FFMC License from RBI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Procedure_to_Avail_Benefits_of_FFMC_License_from_RBI\" title=\"Procedure to Avail Benefits of FFMC License from RBI\">Procedure to Avail Benefits of FFMC License from RBI<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Filing_of_Application_with_RBI\" title=\"Filing of Application with RBI\">Filing of Application with RBI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Satisfy_Fit_and_Proper_Criteria\" title=\"Satisfy Fit and Proper Criteria\">Satisfy Fit and Proper Criteria<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Prerequisites_of_Fit_and_Proper_Criteria\" title=\"Prerequisites of Fit and Proper Criteria\">Prerequisites of Fit and Proper Criteria<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Clearance_from_Empowered_Committee\" title=\"Clearance from Empowered Committee\">Clearance from Empowered Committee<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Review_by_RBI\" title=\"Review by RBI\">Review by RBI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Commencement_of_Business_Activities\" title=\"Commencement of Business Activities\">Commencement of Business Activities<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-ffmc-license-from-rbi\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Full_Fledged_Money_Changer_License\"><\/span>Concept of Full Fledged Money Changer License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company that wants to carry out the activities of\nforeign currency exchange needs to obtain prior approval from <a href=\"https:\/\/www.rbi.org.in\/\">RBI<\/a> in the form of FFMC License. Further, such\na license or permit to operate is granted under the provisions of section 10 of\nFEMA 1999.<\/p>\n\n\n\n<p>However, it shall be noted that this license is issued only for the activities as permitted by the Apex Bank. Also, the entities engaged in the business of currency exchange are known as Authorised Money Changers.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/documents-required-for-ffmc-license-in-delhi\/\">Discover the List of Documents Required for FFMC License in Delhi<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Different_Types_of_AMC_License\"><\/span>Different Types of AMC License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The different types of AMC or Authorised Money Changer License are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/AD-Category.png\" alt=\"Different Types of AMC License\" class=\"wp-image-2801\" width=\"583\" height=\"190\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/AD-Category.png 932w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/AD-Category-300x98.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/AD-Category-768x251.png 768w\" sizes=\"(max-width: 583px) 100vw, 583px\" \/><\/figure><\/div>\n\n\n\n<ul><li>AD Category \u2013 I\nBanks;<\/li><li>AD Category \u2013\nII;<\/li><li>FFMCs;<\/li><\/ul>\n\n\n\n<p>Further, the terms AD and FFMC stand for Authorised\nDealers and Full Fledged Money Changers respectively.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Regulatory_Framework_for_Authorised_Money_Changer_License\"><\/span>Regulatory Framework for Authorised Money Changer License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any individual wants to undertake the activities pertaining to money or foreign exchange must apply to\u00a0acquire FFMC License\u00a0under the provisions of section 10 of the Foreign Exchange Management Act 1999.<\/p>\n\n\n\n<p>Also,\nit shall be noteworthy to state that any person or a business carrying out the operations\nof money exchange without a valid AMC License, then the same will be held\nliable under the provisions of FEMA 1999.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_to_Avail_Benefits_of_FFMC_License_from_RBI\"><\/span>Conditions to Avail Benefits of FFMC License from RBI<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The conditions required to avail of benefits of FFMC\nLicense from RBI are as follows:<\/p>\n\n\n\n<ul><li>Registration\nunder the Companies Act 2013;<\/li><li>In the case of\nSingle Branch, Rs 25 lakhs as the minimum NOF (Net Owned Fund);<\/li><li>In the cash of\nMultiple Branch, Rs 50 lakhs as the minimums NOF;<\/li><li>The object\nclause of the MOA (Memorandum of Association) must reflect the intention to carry\nout money changing activities;<\/li><li>Must not have\nany pending proceedings or investigation with the DOE (Department of\nEnforcement) or DOR (Department of Revenue);<\/li><li>Should start the business operations within six months\nfrom the date of issuance of license by RBI;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Permitted_Activities_for_Money_Changers\"><\/span>Permitted Activities for Money Changers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The activities permitted for an Authorised Money\nChanger are as follows:<\/p>\n\n\n\n<ul><li>A Money Changer\ncan undertake the activities such as Currency Notes, Conversion of Foreign\nCurrency into Indian Currency, Travellers\u2019 Cheque, etc.;<\/li><li>To carry out the\nrestricted activities, a money changer needs to obtain prior permission from\nthe RBI in the form of Franchise Agreement;<\/li><li>A Money Changer\nis eligible to freely operate in Travellers\u2019 Cheque, and Coins and Currencies\nof both NRIs and Indian Residents;<\/li><li>An AMC license\nholder can easily deal in the International Debit or Credit Card of Foreigners;<\/li><li>A registered AMC\ncan sell foreign currency in exchange of Forex Prepaid Cards; Personal Visits,\nand Business Transactions;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Required_to_Avail_Benefits_of_FFMC_License_from_RBI\"><\/span>Documents Required to Avail Benefits of FFMC License from RBI<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The documents required to avail of benefits of FFMC\nLicense from RBI are as follows:<\/p>\n\n\n\n<ul><li>A copy of COI\n(Certificate of Incorporation);<\/li><li>A copy of COC\n(Certificate of Commencement);<\/li><li>MOA and AOA of\nthe applicant company;<\/li><li>Latest audited\nfinancial statements of the applicant company;<\/li><li>A declaration\nconcerning company\u2019s NOF (Net Owned Funds) from the Statutory Auditors;<\/li><li>Audited Balance\nSheets for previous three financial years;<\/li><li>Audited Profit\nand Loss Account for the previous three financial years;<\/li><li>Confidential\nReport from Bank in a sealed cover;<\/li><li>Details\nregarding the nature of the undertaken activities;<\/li><li>Details of the\nAssociated Companies;<\/li><li>Certified copy\nof the Board Resolution passed;<\/li><li>Certified copy\nof declaration concerning KYC (Know Your Customer);<\/li><li>Declaration\nregarding the AML (Anti Money Laundering);<\/li><li>Declaration\nregarding the CFT (Combating the Financing of Terrorism Customer Data);<\/li><li>&nbsp;Certified copy of the declaration from the\nDepartment of Revenue Intelligence, stating that there are no pending\nproceedings against the applicant company;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_to_Avail_Benefits_of_FFMC_License_from_RBI\"><\/span>Procedure to Avail Benefits of FFMC License from RBI<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The steps involved in the procedure to avail of benefits of FFMC License from RBI are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Filing-of-Application-with-RBI.png\" alt=\"Procedure for Benefits of FFMC License from RBI\" class=\"wp-image-2800\" width=\"641\" height=\"398\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Filing-of-Application-with-RBI.png 1000w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Filing-of-Application-with-RBI-300x187.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Filing-of-Application-with-RBI-768x478.png 768w\" sizes=\"(max-width: 641px) 100vw, 641px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_of_Application_with_RBI\"><\/span>Filing of Application with RBI<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Firstly, the applicant needs to furnish an\napplication form for registration with the Apex Bank in the format specified\nunder Annexure \u2013 II. The same will be filed at the regional office of the RBI. Also,\nthe applicant company needs to annex the required documents with the\napplication form as well.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Satisfy_Fit_and_Proper_Criteria\"><\/span>Satisfy Fit and Proper Criteria<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In the next step for the procedure to avail benefits of FFMC license from RBI, the said applicant needs to satisfy the Fit and Proper Criteria. Also, it is compulsory for the directors of the company to undergo the process of <strong><a href=\"https:\/\/swaritadvisors.com\/due-diligence\" class=\"text-primary\">Due Diligence<\/a><\/strong>. <\/p>\n\n\n\n<p>The main use of Fit and Proper Criteria is to\ndetermine the Expertise, Integrity, Track Record, Qualifications, of the person\nbeing appointed as the Director.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prerequisites_of_Fit_and_Proper_Criteria\"><\/span>Prerequisites of Fit and Proper Criteria<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The prerequisites of Fit and Proper Criteria are as\nfollows:<\/p>\n\n\n\n<ul><li>Should be up to\n70 years in age;<\/li><li>Should not be a\nmember of Legislative Assembly;<\/li><li>Should not have\nany Previous Criminal Record;<\/li><li>Should be the\nMember of Parliament;<\/li><li>Should not have\nreceived any Sanctions from the Governing Bodies;<\/li><li>Should not have\nany previous history of Fraudulent Practises;<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clearance_from_Empowered_Committee\"><\/span>Clearance from Empowered Committee<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Now, the applicant company requires to obtain\nclearance from the Empowered Committee. The same will be provided only after\nproper verification.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Review_by_RBI\"><\/span>Review by RBI<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Further, the Apex Bank will review the application\nand documents submitted and will check whether the company has satisfied the\nfit and proper criteria or not. Further, if the RBI is satisfied with\neverything furnished, it will grant the AMC license to the applicant within a\nperiod of 2 to 3 months.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Commencement_of_Business_Activities\"><\/span>Commencement of Business Activities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once the company has received the FFMC License, it\nneed to start the business activities within a period of six months from the\ndate of grant of license. <\/p>\n\n\n\n<p>Also, it needs to furnish duplicate copy of the\ndocuments as follows before the RBI:<\/p>\n\n\n\n<ul><li>Possession\nCertificate;<\/li><li>Lease Agreement;<\/li><li><strong><a href=\"https:\/\/swaritadvisors.com\/shop-establishment-license\" class=\"text-primary\">Shop and\nEstablishment License<\/a><\/strong>;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In a nutshell, to operate as a money changer and to avail of the benefits of FFMC License from RBI, the applicant needs to comply with the provisions of section 10 of FEMA 1999. Also, it shall be noted that no one other than that an Authorised Money Changer is allowed to deal in the activities concerning the foreign currency exchange, and the only authority to grant such license is with the Reserve Bank of India.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/pre-post-registration-of-ffmc-compliances\/\">FFMC Compliances: A Guide on Pre and Post Registration Compliances<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Due to a sudden increase in the foreign trips, the option to have a money changer business is very much in trend. Any entity or an individual who wants to deal in Money Exchange activities needs to obtain FFMC License from RBI. The term FFMC stands for Full Fledged Money Changer License and is granted [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2799,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[57,56],"tags":[436],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2798"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=2798"}],"version-history":[{"count":3,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2798\/revisions"}],"predecessor-version":[{"id":2804,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2798\/revisions\/2804"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/2799"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=2798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=2798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=2798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}