Becoming a Full Fledged money Changer is not something every entrepreneur is capable of. Other than the requirement of FFMC license online, the difficulty of keeping up to date with the exchange rate is a fairly obvious issue. However, courtesy of a streamlined process designed by the Reserve Bank of India, more entrepreneurs than before are opting for this license. If you’re one of them, you’re are the right place.
Through this blog, you’ll know about FFMC License Online, with a complete overview.
What is a Full Fledged Money Changer?
A Full Fledged Money Changer does exactly as the name suggests. It fully exchanges the currencies. The FFMC license meaning is ingrained within the definition of Full Fledged Money Changer. How?
A Full Fledged Money Changer deals with foreign currencies, which makes the business vulnerable to outside infiltration. To prevent any of that to happen, the Reserve bank of India has set up guidelines. All those guidelines come into practice when the money changer becomes legal by obtaining a Full fledged money changer license.
License to exchange currencies provides an entrepreneur perks such as:
- Providing currency exchange services to tourists.
- Providing forex trading services. But in this case, a more evolved version of the money changer license is needed – Forex Trading license. Requirements for that license are beyond the scope of this blog.
Getting the FFMC License: The Eligibility Criteria
Now that you know what is the meaning of the FFMC license, it’s time you learnt the process to get it.
Before you can apply for the license to become a licensed money changer, you have to convince the RBI that you have what it takes – both financially and ethically – to run a money changing business:
- Your minimum net worth to run a single branch of AMC (Authorized Money Changer) should be 25 Lakh Rupees.
- A net worth of 50 lakh rupees is required to run multiple branches of AMC.
- No criminal case should be pending against you in the department of enforcement and the department of revenue intelligence.
Fulfilling the above three criteria makes you eligible to apply for the currency exchange license.
Getting the FFMC License: The complete process
FFMC license acquisition is an online process. You need to first go to the FFMC portal, create a user profile, and file the application. Here are the steps that turns the previous one line into three points:
- Incorporate your FFMC business idea as a company – turning it into an FFMC company.
- Setting up a separate bank account for your FFMC company: Put the net worth amount required as per the eligibility criteria into this account. It would act as a proof to the RBI of your financial prowess.
- Prepare the documents you need for RBI FFMC license: Following is a list of those documents:
- Certificate of incorporation of your company as you need a private or a public limited company to apply for the license.
- Memorandum of Association of the company mentioning your objective as a money changer.
- Articles of Association highlighting your code of conduct as a company and as a currency exchange service provider.
- Latest copies of the audited balance sheet of the previous three years. In case you’re a newbie, provide the balance sheet (audited) for the last one year.
- A document that describes the types of services you provide as an Authorized Money Changer.
- A receipt of the FFMC license fees that you pay via the payment portal.
- Reserve bank will then begin the assessment of the application and the documents. Throughout that process, it might ask you to provide other supporting documents. Be diligent and provide the RBI the required documents. In case the RBI encounter some issues with the application, you’d have to diligent here too when rectifying them.
- The FFMC license is granted once the application is fully processed.
Once issued, the license is valid for 5 years. Thus, in order to retain your business, you’d have file the application for FFMC license renewal.
Getting the FFMC license: Finding the consultant
Where you need the net worth documents, you also need someone to certify them. Where you need an FFMC company, you need someone to incorporate them. And where you need a balance sheet, you need someone to audit them. And not just the documents, you also need someone to:
- File the application
- Conduct regular follow up
- Get you the FFMC license
That’s the job of FFMC license consultant. From managing your accounts when you are setting up the budget to helping you obtain the license, you’ll end to end support for your requirements.
FFMC License: It’s full form Full Fledged Money Changer license basically makes you see the potential of becoming a full realized currency exchange business. Consult with us for more information in this regard.
Money Changer License has been coming to attention of many entrepreneurs who want a piece of that globalization business pie. To that end, they are willing to go ahead and go through the process of getting the Full Fledged Money Changer License without knowing a lot of things about it.
We are about to change that through this blog.
Needless to say, those overly excited entrepreneurs often find themselves at a disadvantage when it comes to having the right knowledge about the required licenses. Therefore, through this blog, you’ll know FAQs about the Money Changer License in India.
Why is FFMC Business Allowed?
The first question that many ask regarding the licensed money changer is why is such a business allowed? Because of the penetration by the global market, many wonder if the currency exchange license should even be allowed in the country. To that, the RBI has provided the following reasons to allow FFMC businesses to be active in India:
- Widening the access of foreign exchange facilities
- Enhancing customer experience by promoting competition in full fledged money changing business field.
What is FFMC license?
The second question is the most common one as well. Many know that currency exchange is a business. However, when asked what is the license that allows them to do that, they come up blank. To that, we have an answer. FFMC license meaning is Full Fledged Money Changer License. It’s the authorization to engage with money changing activities in India.
Is Money changer license really required to carry out money changing business?
No one can run any business in India without proper authorization. For engaging in money changing business, applying for FFMC license online and getting the license is mandatory. If someone does any currency exchange business without this mandatory registration, they can face severe penalties.
Who is allowed to apply for the FFMC License?
Even though the RBI is preaching competition, it has restricted the number of people that can apply for money changing license. Following is considered to be the FFMC license eligibility criteria:
- The applicant has to be a company incorporated under either Companies Act 1956 or Companies Act 2013.
- The applicant must have a net owned fund of INR 25 Lakh if they want to open a single branch of money changing business.
- For multiple branches of money changing business, the required net worth is INR 50 Lakhs.
Within what time frame the FFMC has to start doing business?
After getting the money changer license, the FFMC has to commence its within six months from the date the license was issued. But before they can start, one of the following documents have to be submitted to the reserve bank of India:
- Registration under Shops and Establishment Act
- Rent receipt
- Copy of lease agreement, or
- Sale deed.
What are the forex trading license requirements?
Following are the documents required to acquire RBI FFMC:
- Certificate of incorporation
- Address proof of the registered office
- Memorandum of Association
- Balance sheet of the last 3 years
- An Audited net worth certificate
- Description of money changing business
When to file for FFMC license renewal?
The application of FFMC license renewal has to be filed 2 months before it’s expiry date. The applicant also has to pay the FFMC license fee associated with the license renewal.
Can I file the application with the aid of a consultant?
Yes, Reserve bank of India allows an FFMC License consultant’s intervention when filing the application. Thus, you can ask help from a consultant to file your FFMC license application.
These are all the frequently asked questions associated with money changer license. If you have some more, feel free to ask us in the comment section of whatever blog this article ends up in. And for further assistance, contact our consultants. They can also help you in various license support like IP1 License, VNO License & CDSCO License.