FFMC License holders are the authorized Entities who purchase foreign exchange from non-residents and residents of India and sell that foreign exchange for private and business travel purposes only to the people visiting abroad.
As per the provisions of Section 10 of the Foreign Exchange Management Act, 1999, authorized money changers are the only entities in India dealing in money changing activities and providing the necessary foreign exchange services.
For the purpose of removing the difficulties faced by the foreign visitors and tourists, certain firms and hotels have also been provided the registration to deal in the foreign currency notes, coins and traveler's cheques subject to the directions issued by the RBI from time to time.
The RBI is the governing authority and it has issued the below-mentioned guidelines for the purpose of regulating the operation and Licensing process FFMCs:
Note: If any case by any law enforcing authorities, is initiated/pending against any company / its directors, the company will not be considered as 'fit and proper' and its application will not be considered as eligible for FFMC license.
An application for the renewal of a full-fledged money-changers license shall be made before one month from the expiry date of the license. No application for renewal of a money changer's license shall be made after the expiry of the license.
(i) AMC shall maintain the following Registers in respect of their money-changing transactions:
(a) Daily Summary and Balance book of:
(b) Register of:
The Reserve Bank reserves the right to revoke the license granted to any FFMC at any time if the Reserve Bank is satisfied that
(a) It is in public interest to do so or
(b) The FFMC has failed to comply with any condition or any of the provisions of the Foreign Exchange Management Act, 1999
There is one more intermediary authorized by RBI to deal in foreign exchange, i.e., Agents and Franchisees.
Authorized Dealer Category – I Banks, Authorized Dealers Category - II and FFMCs can appoint their Agents and Franchisees to deal in money changing activities. Following are the important points in this regard:
Authorized dealers play an important role in Forex transactions. The RBI grants authorization in the form of licenses to deal in foreign exchanges to the banks which are well equipped to undertake foreign exchange transactions in India. The RBI has granted authorization to certain financial institutions to undertake specific types of foreign exchange transactions incidental to their main business.
Entities that are approved by the Reserve Bank of India to do money changing business according to the section 10 of the Foreign Exchange Management Act, 1999.
Entities other than the bank can be a Full Fledged Money Changer. They come under the Authorized Dealer Category II whereas the Banks are Authorized Dealer Category I.
Any entity which is enlisted under the Companies Act, 2013 are qualified to apply for the FFMC permit in India.
Yes, any entity registered under the Companies Act having a base net owned asset of Rs 10 lakhs and one of the main object clause of the company is money changing business that can get the franchise permit from an existing FFMC.
Yes, the permit should be renewed each year by giving the application documents to the Reserve Bank of India.
No, the franchise is permitted only for the limited money changing activities according to the master circular of RBI.
Authorized Money Changers are the entities that are authorized by the Reserve Bank of India under the section 10 of the Foreign Exchange Management Act 1999. An AMC is a Full Fledged Money Changer authorized by the Reserve Bank to deal in Foreign exchange for specified purposes.
The application in the prescribed form along with the required documents should be submitted to the respective Regional Office of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the applicant fails.
The Reserve Bank reserves the right to revoke the license granted to an AMC at any time if the Reserve Bank is satisfied that:/p>
Reserve Bank also reserves the right to revoke the authorization of any of the offices for infringement of any statutory or regulatory provision. The Reserve Bank may at any time vary or revoke any of the existing conditions of a money changer’s license or impose new conditions.
The FFMC should commence its operations within a period of six months from the date of six months from the date of issuance of the license. A copy of the registration under Shops &Establishment Act or any other documentary evidence such as rent receipt, a copy of lease agreement; etc should be utilized to the Reserve Bank before the commencement of the business.