{"id":10875,"date":"2020-06-05T16:24:46","date_gmt":"2020-06-05T10:54:46","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=10875"},"modified":"2020-12-17T12:26:22","modified_gmt":"2020-12-17T06:56:22","slug":"money-changer-license-eligibility-and-application-process-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/","title":{"rendered":"Money Changer License: Eligibility and Application Process in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Foreign exchange is crucial for a country to stay in the global trade mixture. Foreign exchange deals with trade of foreign currency in case of any transaction that happens internationally. This may include business transactions, money spent on tourism, etc. To carry out these transactions, it is mandatory to have licensed places where individuals and businesses can get their foreign currency exchanged. These licensed places are called Authorised Money Changers and to operate a currency exchange business, a Money Changer License or FFMC license is required. This guide talks about money changer license, eligibility to obtain FFMC license, application procedure, documents requirements, and much more.<\/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-6a3a4a9066c24\" 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-6a3a4a9066c24\"  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\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#What_is_a_Money_Changer_License_in_India\" title=\"What is a Money Changer License in India?\">What is a Money Changer License in India?<\/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\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Activities_Permitted_for_FFMC_License_Holders\" title=\"Activities Permitted for FFMC License Holders\">Activities Permitted for FFMC License Holders<\/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\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Kinds_of_Money_Changer_License_or_FFMC_License\" title=\"Kinds of Money Changer License or FFMC License\">Kinds of Money Changer License or FFMC 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\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Eligibility_to_Obtain_Money_Changer_License\" title=\"Eligibility to Obtain Money Changer License\">Eligibility to Obtain Money Changer License<\/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\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#The_process_to_Obtain_Money_Changer_License\" title=\"The process to Obtain Money Changer License\">The process to Obtain Money Changer License<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Application_to_RBI_For_Money_Changer_License\" title=\"Application to RBI For\nMoney Changer License\">Application to RBI For\nMoney Changer License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Fit_and_Proper_Criteria\" title=\"Fit and Proper Criteria\">Fit and Proper Criteria<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Review_by_the_RBI\" title=\"Review by the RBI\">Review by the 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\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Empowered_Committee_Clearance\" title=\"Empowered Committee\nClearance\">Empowered Committee\nClearance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Certificate_of_Registration\" title=\"Certificate of\nRegistration\">Certificate of\nRegistration<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Documents_Needed_to_ObtainMoney_Changer_License\" title=\"Documents Needed to\nObtainMoney Changer License\">Documents Needed to\nObtainMoney Changer License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Post-License_Requirements_by_an_FFMC_License_Holder\" title=\"Post-License Requirements\nby an FFMC License Holder\">Post-License Requirements\nby an FFMC License Holder<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Requirements_for_Maintenance_of_Records_and_Registers\" title=\"Requirements for\nMaintenance of Records and Registers\">Requirements for\nMaintenance of Records and Registers<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Inspection_of_Books_of_Accounts_by_the_RBI\" title=\"Inspection of Books of Accounts by the RBI \">Inspection of Books of Accounts by the RBI <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Process_of_Renewal_of_FFMC_License\" title=\"Process of Renewal of\nFFMC License\">Process of Renewal of\nFFMC License<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/money-changer-license-eligibility-and-application-process-in-india\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Money_Changer_License_in_India\"><\/span>What is a Money Changer License in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any company that wishes to start foreign currency\nexchange operations in India is required to obtain a Full-Fledged Money Changer\nLicense or FFMC License. The license is granted by the Reserve Bank of India,\nthat also issues annual guidelines to be followed by all FFMC license holders\nin the country. These guidelines are issued vide a master circular by RBI on\nMemorandum of Instruction on Money Changing Activities.<\/p>\n\n\n\n<p>The Full-Fledged Money Changer License or <strong><a href=\"https:\/\/swaritadvisors.com\/ffmc-license\" class=\"text-primary\">FFMC License registration<\/a><\/strong>, renewals, revocations, and other provisions that must be followed by FFMC holders in India are laid down under the FEMA- Foreign Exchange Management Act, 1999.<\/p>\n\n\n\n<p>The Act, <strong>under Section 10(1)<\/strong> authorises a company to engage in foreign exchange or foreign security after obtaining the Money Changer License. Section 10(1) allows Authorised Money Changers or AMCs, including businesses or individuals who have received permission from the Reserve Bank of India to carry out Forex or money change activities in India. The AMCs allowed to carry out such operations are also known as Full-Fledged Money Changers.<\/p>\n\n\n\n<p>The act and the RBI guidelines prohibit anyone from\ncarrying out any money changing activities or display advertisements regarding\nthe same unless a Full-Fledged Money Changer License or FFMC License is\nobtained from the RBI.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Activities_Permitted_for_FFMC_License_Holders\"><\/span>Activities Permitted for FFMC License Holders<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any entity or individual that holds the Money Changer License or FFMC License can carry out the <strong>following activities in India<\/strong>:<\/p>\n\n\n\n<ul><li>The FFMC  license holder can enter into a Franchise Agreement to carry out Restricted Money Changing business. This business performs activities relating to the conversion of foreign currency notes, coins or travellers\u2019 cheques into Indian Rupees (INR).<\/li><li>The FFMC license holder can also freely purchase any country\u2019s currency, notes or coins, and traveller\u2019s cheques from Indian residents and Non-Residents. It can also extend its license to allow its franchisee to carry out these activities legally.<\/li><li>The FFMC license holder is also allowed to sell INR to foreign visitors or tourists against their International Debit or Credit Card. <\/li><li>The FFMC license holder can also sell foreign exchange currency for the purposes of business transactions, personal visits, and Forex prepaid cards.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Kinds_of_Money_Changer_License_or_FFMC_License\"><\/span>Kinds of Money Changer License or FFMC License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company or individual may file for any of the\nfollowing types of Money Changer License or FFMC License in India:<\/p>\n\n\n\n<ul><li>Authorised Dealer Category-I Banks (AD Category\u2013I Banks)<\/li><li>Authorised Dealers Category-II (AD Category\u2013II)<\/li><li>Full-Fledged Money Changer (FFMC)<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"486\" height=\"439\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Kinds-of-Money-Changer-License.png\" alt=\"Kinds of Money Changer License\" class=\"wp-image-10876\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Kinds-of-Money-Changer-License.png 486w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Kinds-of-Money-Changer-License-300x271.png 300w\" sizes=\"(max-width: 486px) 100vw, 486px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_to_Obtain_Money_Changer_License\"><\/span>Eligibility to Obtain Money Changer License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any business that wishes to obtain a Money Changer\nLicense or FFMC License in India must fulfil the following criteria:<\/p>\n\n\n\n<ul><li>The entity must be registered under the Companies Act, 2013 in order to undertake the activities of foreign currency exchange.<\/li><li>The business must possess at least INR 25 lakhs as its net-owned funds to operate a single branch. However, when a business wishes to operate via multiple branches, it must possess net-owned funds of at least INR 50 lakhs.<\/li><li>The  <strong>Memorandum of Association<\/strong> of the business must include an object clause that states that the company intends to undertake the activity of money exchange in India.<\/li><li>No criminal or civil cases must be pending against the business with the Department of Revenue Intelligence.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_process_to_Obtain_Money_Changer_License\"><\/span><strong>The process to Obtain Money Changer License<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To start a money-changing business in India, it is mandatory to obtain the approval of the Reserve Bank of India. The process involved in obtaining a Money Changer License or FFMC License includes the following steps:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"783\" height=\"344\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Process-to-Obtain-Money-Changer-License.png\" alt=\"process to Obtain Money Changer License\" class=\"wp-image-10877\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Process-to-Obtain-Money-Changer-License.png 783w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Process-to-Obtain-Money-Changer-License-300x132.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/06\/Process-to-Obtain-Money-Changer-License-768x337.png 768w\" sizes=\"(max-width: 783px) 100vw, 783px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Application_to_RBI_For_Money_Changer_License\"><\/span><strong>Application to RBI For\nMoney Changer License<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The first step is to file a comprehensive application\nwith the regional office of the RBI to obtain the money changer license. The\napplication must be accompanied by the requisite documents as prescribed by the\nRBI.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fit_and_Proper_Criteria\"><\/span><strong>Fit and Proper Criteria<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>To obtain Money Changer License or FFMC License in India, the applicant must fulfil the \u2018<strong>Fit and Proper Criteria<\/strong>\u2019. This criterion states that no proceeding in the form of the criminal or civil case must be pending against the applicant with the Department of Revenue Intelligence. If any such case is pending against the applicant, they will not be eligible to obtain an FFMC license.<\/p>\n\n\n\n<p>To ensure that the fit and proper criteria is met, the\nBoard of the applicant company must undertake due diligence to confirm that the\nperson chosen or appointed as the Director of the company is suitable to\nreceive or continue to hold such appointment. This must be done by determine\nthe person\u2019s expertise, qualifications, integrity, and track record.<\/p>\n\n\n\n<p><strong>Additionally, the applicant must fit the following criteria:<\/strong><\/p>\n\n\n\n<ol><li>The\napplicant must not exceed the age of 70 years.<\/li><li>The\napplicant must not be a Member of Parliament, Member\nof Legislative Assembly, or a Member of Legislative Council. <\/li><li>The applicant must not\nhave any criminal record or civil action against them relating to apersonal\ndebt.<\/li><li>The applicant must not\nhave received a refusal of admission to or expulsion from any professional\nbodies.<\/li><li>The applicant must not\nhave received any sanctions from regulators or similar bodies.<\/li><li>The applicant must not\nhave a history ofold questionable business practices.<\/li><\/ol>\n\n\n\n<p>In\ncase the applicant has any case pending with the Directorate of Enforcement\n(DoE), the Directorate of Revenue Intelligence (DRI) or any other law enforcing\nauthorities, the company would disqualify from obtaining the Money Changer\nLicense or FFMC License. The Board of the company must also obtain a\nself-declaration from the Directors stating that they meet the fit and proper\ncriteria.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Review_by_the_RBI\"><\/span><strong>Review by the RBI<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The\nRBI reviews the documents and applicant submitted by the applicant company, and\nassesses whether or not the company meets the fit and proper criteria before\nforming a decision regarding the issuance of Money Changer License. If the RBI\nis satisfied with the documents and applicant, it considers the application for\napproval.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Empowered_Committee_Clearance\"><\/span><strong>Empowered Committee\nClearance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The applicant must also obtain the clearance from the Empowered Committee. The RBI only considers an application for approval if the Empowered Committee issues the clearance to the applicant company. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Certificate_of_Registration\"><\/span><strong>Certificate of\nRegistration<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Upon confirming the authenticity of the details and\ndocuments provided by the applicant company, and confirming the clearance by\nthe Empowered Committee, the RBI issues the Money Changer License or FFMC\nLicense within 2 or 3 months.<\/p>\n\n\n\n<p>The\nRBI\u2019s decision to approve or reject a registration application for Money\nChanger License or FFMC License is final and binding upon the applicant.<\/p>\n\n\n\n<p>Upon receiving the license to operate as a Money Changer Business or FFMC, the company must commence its activities within 6 months from the date on which the license was issued. The company must also inform the Regional Office of the RBI that it has started its money-changing operations in India.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Needed_to_ObtainMoney_Changer_License\"><\/span><strong>Documents Needed to\nObtainMoney Changer License<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nregistration application must be filed in the format as prescribed by the RBI\nwith the Regional Office of the Foreign Exchange Department of the RBI.\nAdditionally, the applicant must attach the following documents with the money\nchanger license application:<\/p>\n\n\n\n<ul><li>Copy of Company Incorporation Certificate.<\/li><li>Memorandum and Articles of Association laying down the object provision that states that the company would undertake money changing activities.<\/li><li>A copy of the latest audited accounts of the company.<\/li><li>Certificate from Statutory Auditors that certifies the net-owned funds of the company.<\/li><li>Audited Balance Sheet and Profit and Loss Account of the company for the previous three years.<\/li><li>Confidential Report from the banker of the company.<\/li><li>Details regarding any associated companies or sister firms that function as NBFCs in India. <\/li><li>Certified copy of the Board Resolution that allows the company to perform money changing activities.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Post-License_Requirements_by_an_FFMC_License_Holder\"><\/span><strong>Post-License Requirements\nby an FFMC License Holder<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After receiving the Money Changer License or FFMC\nLicense, the company must carefully comply with the following post-approval compliance\nrequirements:<\/p>\n\n\n\n<ol><li>Copy\nof the Shops and Establishment Registration License or any other documentation\nincluding the rent receipt or copy of lease agreement must be filed with the\nRegional Office of the Reserve Bank of India before the business can undertake\nany money exchange operations. <\/li><li>Compliance\nwith the guidelines and circulars as issued by the RBI.<\/li><li>Display\nof a copy of Money Changer License or FFMC License issued by the RBI at every\nplace of business.<\/li><li>Implement\na system of Concurrent Audit for all the foreign exchange transactions\nperformed by the company.<\/li><li>Submit\nthe company\u2019s Annual Audited Balance Sheet to the regional office of the RBI.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requirements_for_Maintenance_of_Records_and_Registers\"><\/span><strong>Requirements for\nMaintenance of Records and Registers<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company with a Money Changer License must also maintain\nwell-detailed records and registers as follows:<\/p>\n\n\n\n<ul><li>Register stating the purchases of the foreign currencies from the public in Form FLM-3.<\/li><li>Register stating the purchases of the foreign currency notes or coins from authorised dealers and money changers in the Form FLM-4.<\/li><li>Daily summary and balance book of the Foreign currency notes or coins in form FLM-1.<\/li><li>Daily Summary and Balance Book of Travellers\u2019 cheques in form FLM-2.<\/li><li>Register stating all the sales of foreign currency notes or coins and foreign currency travellers\u2019 cheques to the public in the form FLM-5.<\/li><li>Register mentioning all the sales of the foreign currency notes or coins to authorised dealers, Money Changers or overseas banks in the Form FLM-6.<\/li><li>Register laying down the details of travellers\u2019 cheques surrendered to authorised dealers or money changers, or travellers\u2019 cheques exported in the Form FLM-7.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Inspection_of_Books_of_Accounts_by_the_RBI\"><\/span><strong>Inspection of Books of Accounts by the RBI <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The\nReserve Bank of India is authorised to inspect the books of accounts, any other\ndocuments of a Money Changer License or FFMC License holder under Section 12(1)\nof Foreign Exchange Management Act, 1999.<\/p>\n\n\n\n<p>The\nFFMC license holder must adhere to such requirements and comply and cooperate\nwith the Inspecting Officers for the smooth performance of such inspections.<\/p>\n\n\n\n<p>In\ncase, a company fails to present any books of accounts or is unable to provide\nany required information during the inspection, the Inspecting Officer may hold\nthe company liable for violating the provisions of the FEMA, 1999. The Inspecting\nOfficer may hold the FFMC license holder in contravention of the Act for any of\nthe following irregularities: <\/p>\n\n\n\n<ol><li>If the system of Concurrent Audit is not put in place.<\/li><li>If the company is not performing its Concurrent Audits.<\/li><li>If the company is not displaying or updating the foreign exchange rate at its place or places of business.<\/li><li>If the company treats the foreign exchange transactions performed within a month as multiple transactions and not a single transaction.<\/li><li>Form FLM-1 displays a negative balance of foreign exchange.<\/li><li>The name of the principal officer or authorised persons is not mentioned in the records or stated to the <strong>FIU-IND<sup><a class=\"text-primary\" href=\"https:\/\/fiuindia.gov.in\/\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong>.<\/li><li>The copies of Circulars issued by the concerned authority is not available at the company\u2019s place of business.<\/li><li>The company has made a payment of more than US$ 1000 in cash instead of account payee cheque.<\/li><li>The Currency Declaration Form (CDF) is not kept on record.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Process_of_Renewal_of_FFMC_License\"><\/span><strong>Process of Renewal of\nFFMC License<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To renew the Full-Fledged Money Changer or FFMC\nLicense, a renewal application must be filed before 1 month from the date of\nthe expiry of such license. The Money Changer License or FFMC License continues\nto be in force until the day of renewal of the license. In case the applicant\nfor renewal is not filed, the license expires on the prescribed date, and when\nthe renewal application is filed by rejected, the license is valid till the\ndate such rejection is received by the company.<\/p>\n\n\n\n<p>No application for license renewal can be filed once\nthe validity period of the license expires. The application to renew a Money\nChanger License or FFMC License must be filed with the following documents: <\/p>\n\n\n\n<ul><li>Original License issued.<\/li><li>Copy of the latest audited balance sheet.<\/li><li>Net-owned fund Statement which is certified by a practising Chartered Accountant.<\/li><li>Confidential Report of the banker.<\/li><li>Declaration for non-involvement in ED\/DRI criminal cases on the company&#8217;s letterhead dated, stamped and signed.<\/li><li>Certificate by a Chartered Accountant for compliance with AML guidelines, Concurrent Audit System and Internal Control.<\/li><li>Updated Shop and Establishment licence.<\/li><li>KYC policy as per the KYC guidelines issued by the RBI vides A.P. (DIR Series) Circular No. 17 dated November 27, 2009.<\/li><li>Fit and proper criteria along with the details of all the Directors.<\/li><li>List of directors and shareholders with the details of shareholdings.<\/li><li>Details of branches\/franchisees of the company.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>An entity that plans to commence a foreign currency\nexchange business in India must obtain a Full-Fledged Money Changer License or\nFFMC License from the RBI. However, the RBI is stringent in granting such\nlicense, and therefore, it is important to consult experienced business\nconsultants and FEMA experts who can help a business in complying with the all\nthe license registration requirements, as well as post-license compliance needs\nof a Full-Fledged Money Changer or FFMC business.<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/how-to-apply-for-ffmc-full-fledge-money-changer-license\/\">How to Apply for FFMC License?<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Foreign exchange is crucial for a country to stay in the global trade mixture. Foreign exchange deals with trade of foreign currency in case of any transaction that happens internationally. This may include business transactions, money spent on tourism, etc. To carry out these transactions, it is mandatory to have licensed places where individuals and [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":10890,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[350],"tags":[1082],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/10875"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=10875"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/10875\/revisions"}],"predecessor-version":[{"id":17921,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/10875\/revisions\/17921"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/10890"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=10875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=10875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=10875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}