How does one become eligible to apply for FFMC License

"Do you have a change for a dollar?"

You might have already heard of this line many times in movies. But nowadays, it’s meaning have changed. While in the movie, the guy is asking for a change at the departmental store of his own country, now, one tourist can come at you and ask for a change, when your shop is in India. Unless you have the FFMC License, you don’t be able to provide them with a change.

An FFMC License or a Full-fledged money changer license empowers you to do business in money changing activities. Whether it’s currency, of Forex trading, with FFMC License registration, you can start it all.

But not right away. Before applying for FFMC certification, you need to know some facts about it. And through this article, we are going to discuss the most important one – How does one become eligible for FFMC License.

Why becoming eligible is important?

Foreign currency exchange is a business that has many positive, as well as negative possibilities. It won’t bother the central government but the negative possibilities even consist of things that can harm the national security. That’s why, as per the guidelines of the Reserve Bank of India, one has to fall exactly under the eligibility criteria to get the FFMC License.

Eligibility Criteria checklist for FFMC License

If you’re worried about the word eligibility, you shouldn’t be. There are not more than 4 points that you need to keep in mind to get the FFMC License.

1. Business entity: FFMC License is not meant for individual applicants, but rather for business entities. Thus, before you apply, get your FFMC business registered as a Private limited company. Furthermore, mention in the Memorandum of Association of that company that engaging in money exchanging business is the objective of your company.

2. Single branch net owned funds: If you’re planning to run your money changing business from a single shop or single branch, you need to have net owned funds of at least INR 25 lakh. That’s why, before you get started with the business, it’s better to get the funds ready and submit it in the bank.

3. Multiple Branch net owned funds: If you’re planning to branch out your FFMC business into multiple branches, make sure that you have net owned funds of INR 50 Lakh. Anything less than this and you’d be deemed ineligible to get the license.

4. No convictions: Perhaps the most important, and also the most ignored eligibility criteria to follow is to have no convictions against either you or any one in your company in the Department of Enforcement or Department of Revenue intelligence.

Documents required for FFMC License

Other than being eligible, you also need to have the right documents alongside you to get the RBI FFMC License. They are as follows:

1. Certificate of Incorporation

2. Memorandum of Association

3. Articles of Association

4. A confidential report highlighting your net owned funds

5. Audited balance sheets and net worth Certificate signed by a Chartered Accountant.

6. Description of the nature of business you’re pursuing.

7. If you’ve any prior FFMC application that you’ve filed before your current one, attach a copy of that.

Conclusion

Being eligible for the FFMC License is not so difficult. However, you need to have the financial stability and the discipline to carry forward your business as well. That’s why, our FFMC License consultant are always ready to assist you.

Jatin Rohatgi is a business license consultant that specializes in niche business license. Some of these include Epr Registration and Tec certification