A brief overview of the FFMC License in India
Posted: Jun 18, 2021
If you’re one of the people who want to do business in foreign currencies, then you should first obtain FFMC license from the Reserve bank of India. Reserve bank of India issues said license to companies that are capable of providing foreign exchange services to NRIs and foreign tourists.
Additionally, you must know that once you obtain the FFMC license, you become an AMC or Authorized Money Changer. It means that you need to follow the provisions of Foreign Exchange Management Act from that point on.What is the role of those with FFMC license in India?
Those with FFMC License, the AMCs play a central role in the transactions related to foreign exchange. That’s why, the Reserve bank of India only sees certain entities fit for the license. These entities include:
- Non banking Financial Companies
- Companies whose exclusive objective is to provide foreign exchange service
Read More: Read More:How to start a blogWhat are the benefits that come with FFMC License?
Other than the obvious benefit of giving legality to your foreign exchange business, the benefits of FFMC license are as follows:
- You’ll have the ability to provide facilities that include sales and services for foreign currencies.
- As a holder of FFMC license holder, you can provide the encashment certificates in case of foreign currency notes from non residents and residents as well as travellers cheques.
Note: Encashment certificates certify that a person has purchased foreign currency. They validate the purchase of foreign currencies in India.
- Foreign tourists are always looking for the right person who can exchange their currencies. As an FFMC license holder, you can be that person.
When you file the application of FFMC license online, the first thing that you have to provide is the type of entity you are:
- Are you a bank who is providing additional foreign exchange services?
- Are you a fully fledged money changer who exclusively provides foreign exchange services?
- Or, are you a category II authorized money changer?
Those categories determine the type of FFMC license that Reserve bank of India issues to you.Conditions to follow when applying for FFMC license
Keep the following conditions in mind when contemplating to apply for FFMC license in India:
- You can’t apply for it if you don’t have a registered company
- For single branch of FFMC, your net worth should be at least INR 25 Lakh
- For multiple branches, the net worth should be at least INR 50 lakh
- The object clause of the memorandum of association must reflect that your business objective is currency exchange
- You have to start the full fledge money changing business within 6 months of getting the FFMC license.
- You and the other directors of your company should meet the Fit and Proper criteria of the RBI
As per the requirement of RBI, a fit and proper applicant is the one that falls under all the points mentioned below:
- The applicant should not be more than 70 years old
- The applicant should not be a member of legislative assembly
- The applicant should not have any history of malpractice
- The applicant should not be an MP
- The applicant should not have any criminal record
- The applicant should not be sanctioned(prohibited) from doing any regulatory activity
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Here is a brief review of FFMC license in India. Our hope is tht upon reading this article, you will choose to become an FFMC. And when you do, know what Registrationwala is standing happy to help you.
Vicky kumar is a company analyst in IP1 License.