In this globalized world, you’ll always need someone to exchange your foreign currency. Your need can take you to two places:
- A backyard shop that exchanges currency notes, or
- a Full Fledged money changer recognized by the Reserve Bank of India.
Which one would you choose? Generally, your answer would be the second one, but that’s now the reality. People tend to choose the first one because ;
- They are easy to setup because they are not legal,
- They can exchange your money instantly.
Why is that? Why there are so little Full Fledged Money Changers in India? Is it because of the difficult to obtain FFMC License? Or is it because of the complexity of FFMC License process? If those are the cases, we have good news for you, for this article will help you in decoding the complexities of FFMC License in India?
What is an FFMC?
An FFMC, or Full Fledged money changer is a company that conducts the following types of businesses after getting approval from the Reserve Bank of India:
- Exchanging foreign currencies
- Forex trading
In simple terms, an FFMC is a business unit that exchanges your foreign currencies into national ones as per the current market rate. The benefits of an FFMC for a country is:
- Increased tourism because of foreign exchange facilities.
- Increased access to foreign investment
- Increased participation in global trading effort.
Can anyone become an FFMC?
One question that people often ask us because they have seen so many “shops” providing money exchanging services is that can anyone become an FFMC. Well, to that our FFMC License consultant have only one thing to say, no and yes.
No, if you are:
- Not a company
- Someone who don’t have net owned funds of at least 25 Lakhs
- A convicted felon in the eyes of law.
And yes, if you are:
- A company registered under the Companies Act 2013
- Someone with minimum net owned fund of INR 25 lakh for a single branch and INR 50 Lakh for multiple branches
- Not someone who has been convicted for any crime in the court of law.
Procedure to acquire the FFMC License?
To acquire the full fledged money changer license, you require the following documents:
- Register your company: Your first course of action is to establish your business unit as a company. For that, you have to follow the general company registration process. You can consult with our company registration experts to know more about the process.
- Collect and organize the required documents: Once you’ve registered your company, you’re ready to file the FFMC License application online. However, for that process to take hold, you have to first get the required documents. They are as follows:
- Certificate of incorporation of the company
- MOA and AOA of the company
- A confidential report showing your net owned certificate from the bank
- Audited balance sheet along with the certificate of all involved statutory auditors.
- Description of the nature of your business.
- if you’ve applied other applications for FFMC license online, provide documents for the same.
- Submit the documents and file the application: Once you’ve gathered the documents you’re required, you have file the application of FFMC License to the RBI. The FFMC license fees (government) shall be paid at the time of application submission.
- Scrutinization and certification: Once the RBI acquires the application from you, they will scrutinize it. After that, they will certify it based on its correctness.
That’s all there is to getting FFMC License in India. If you’re still a bit confused, you can contact our FFMC consultants. We are more than happy to help you.