1.What is FFMC Registration?

FFMC registration is a kind of permit that allows the company willing to undertake the business of the money changing activity or Forex Currency Exchange. Under Section 10 (1) of the FEMA Act (Foreign Exchange Management Act), 1999, AMC (Authorized Money Changers) are the entities or individuals authorized by the RBI (Reserve Bank of India). These AMCs are known as Full Fledged Money Changers. According to the respective guidelines, no entity can carry on the business of money changing activity or advertise it unless they possess a valid FFMC license granted by the RBI. Hence, carrying on any activity or business related to money exchange without obtaining the approval from the RBI will be subject to penalties under the prescribed Act.

FFMC is issued For the purpose of removing the obstacles faced by foreign visitors and tourists, particular firms and hotels have also been offered the registration to deal in foreign currency notes, coins and traveller’s cheques under the directions issued by the RBI frequently.


2.Classification of FFMC License

For an entity to operate as an FFMC (Full Fledged Money Changer), following are the types of license that are required by an entity:

  • AD Category- I Banks (Authorised Dealer Category – I Banks)
  • AD Category- II (Authorised Dealer Category – II)
  • Full Fledged Money Changers (FFMCs)


3.What are the activities that FFMCs can carry on?

The Full Fledged Money Changers are liable to carry on the following activities:

  1. FFMCs can enter into franchise agreement at their convenience for undertaking the Restricted Money Changing business which comprises the conversion of coins or traveller’s cheques, foreign currency notes into (INR) Indian Rupees.
  2. An FFMC is allowed to sell INR (Indian Rupees) to foreign visitors or tourists against International Credit Cards/International Debit Cards and take immediate action to receive the reimbursement through normal banking channels.
  3. FFMCs or their franchises could at its discretion buy any coins or traveller’s cheques and foreign currency notes from both NRIs as well as residents of India.
  4. An FFMC is designate for selling foreign exchange for the following purposes:
  • Private Visits
  • Business Visits
  • Forex Pre-Paid Cards

4.What are the eligibility criteria for obtaining FFMC Registration?

According to the RBI guidelines, the applicant willing to obtain an FFMC License must meet the following requirements:

  1. The applicant should have obtained a company registration under the Companies Act, 2013.
  2. Furthermore, the minimum NOF (Net-owned Fund) of Rs. 25 lakhs is necessary for single branch FFMC while Rs. 50 lakhs for FFMC with multiple branches is mandatory.
  3. There shouldn’t be any of the criminal or civil cases pending against the company or individual with the Directorate of Revenue Intelligence and Directorate of Enforcement.
  4. The object clause of Memorandum must demonstrate the money changing activity to be pursued by the company.


5.Documents required for obtaining an FFMC License in India

The following are the documents that are required for obtaining an FFMC License:

  1. A copy of COI (Certificate of Incorporation) of the Company.
  2. The MoA (Memorandum of Association) and AoA (Articles of Association) of the company containing the objects for carrying out money changing activities or a proper amendment with the same effect.
  3. Copies of the Audited Balance Sheet along with the Profit & Loss Account of the entity for three preceeding financial before the date of application for the license, if applicable.
  4. A declaration to the effect that there aren’t any proceedings pending with or has been initiated by the Directorate of Revenue Intelligence (DRI) or Directorate of Enforcement (DoE) or any other law administering authorities.
  5. A sealed confidential report from the banker of the applicant.
  6. A declaration to the effect that proper policy framework on KYC (Know Your Customer)/AML (Anti-Money Laundering) / CFT (Combating the Financing of Terrorism) will be kept in place on procuring the authorization from the Reserve Bank of India and before commencing the business operations.
  7. Information concerning the sister or associated concerns operating in the financial sector such as NBFCs.
  8. A certified copy of the Board Resolution for carrying out the business of money changing.


6.Step by Step procedure for acquiring FFMC Registration from RBI

As we know that the Reserve Bank of India regulates the operation of Full-Fledged Money Changer, therefore, any entity willing to start an FFMC needs to obtain approval from the RBI.

Below, we have described step by step procedure for FFMC Registration in India:

Step 1: Submit the application to RBI

Firstly, you need to submit a detailed application for the FFMC registration to the concerned regional office of the RBI. Along with, you are also required to attach the documents as described above.

Step 2: The applicant should fulfil the fit and proper criteria

The person applying for an FFMC license must satisfy the fit and proper criteria. It means there shouldn’t be any proceedings pending with the DRI or DoE. If there’s any proceeding pending, the applicant company won’t be considered for the grant of FFMC license.

Step 3: Review of Director’s fit and proper criteria by RBI

Next, the RBI will review for fit and proper criteria of the applicant company’s director. If everything is correct and the RBI is satisfied, it will consider the application.

Step 4: Issuance of the Certificate of Registration

If the RBI is satisfied with the application and if everything is in line, the RBI will issue the license within the time frame of two to three months.

Step 5: Clearance by the Empowered Committee

Lastly, the applicant requires clearance from the Empowered Committee. One must note that the approval from or decision of the Reserve Bank of India is not final and binding.

Note: The Entity will not be considered as eligible to obtain an FFMC License if ay case by any law-enforcing authorities is initiated or is pending against the Entity or any it’s Directors.

7.The Post-Approval Requirements of FFMCs

The following conditions are required to be fulfilled by the Full Fledged Money Changer (FFMC) after obtaining the license to be so.

  1. A copy of registration obtained under Shops & Establishment Act or any other proof in documents must be submitted to the Regional Office directed by the Reserve Bank.

(Other proof may include; a copy or rent or lease agreement, rent receipt, etc.)

Furthermore, the submission must be made prior to the commencement of the business.

  1. Newly incorporated FFMCs have to undertake their business activities according to the instructions prescribed by the RBI time to time.
  2. It’s mandatory for every FFMC to display a copy of the FFMC license issued by the RBI at each of its business places.
  3. FFMCs have to keep the system of Concurrent Audit of the transactions undertaken by them.
  4. Every FFMC must submit its Annual Audited Balance Sheet to the respective regional office of the RBI’s.

8.Records and Registers by FFMC

A Full Fledged Money Changer (FFMC) must maintain the following registers and records with respect to their money changing activities.

  1. Daily Summary and Balance book of the foreign currency notes/ coins in form FLM-1.
  2. Daily Summary and Balance book of Travellers’ cheques in form FLM-2.
  3. Register of purchases of the foreign currencies from the public in Form FLM-3.
  4. Register of purchases of the foreign currency notes/ coins from authorized dealers (ADs) and authorized money changers in the Form FLM-4.
  5. Register of sales of foreign currency notes/ coins and foreign currency travellers’ cheques to the public in the Form FLM-5.
  6. Register of sales of the foreign currency notes/ coins to authorized dealers/ Full Fledged Money Changers/ overseas banks in the Form FLM-6.
  7. Register of travellers’ cheques surrendered to the authorized dealers/ authorized money changers/ exported in the Form FLM-7.

9.Renewal of FFMC License

An application for the renewal of a Full Fledged Money Changer (FFMC) License must be made before 1 month from the expiry date of the license. No request for the restoration of a money changer’s license shall be accepted after the expiry of the FFMC license.

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