How to start a currency exchange business in India?

  • May 26, 2023
  • Dushyant Sharma
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Whenever it comes to visiting a foreign country, one of the most important concerns people face is to get the local currency. Since you will be carrying your nation’s currency, the role of currency exchange becomes prominent. Apart from playing a big role in finance, this sector also gives innumerable growth opportunities to job seekers and entrepreneurs. They can start their own currency exchange business and help people get the desired currency. If we talk about India, India’s forex reserve is soon going to have a worth of $600 billion. It is a clear sign that it’s the best time to start a venture into currency exchange.

If you want to kick off your currency exchange business, knowing each & every aspect of the same is a prerequisite. So, in this post, we will delve deeper by explaining every point. However, to start with, you would have to obtain an FFMC license in India to get into this.

What is FFMC License?

The Reserve Bank of India (RBI) has given exclusive rights to a firm named Full Fledged Money Changer for trading chores including forex currency. These firms are authorized under the Foreign Money Exchange Act of 1999. The RBI authorizes commercial establishments to handle foreign exchange for particular objectives. These business units are popularly called Authorized Money Changers or AMCs.

By becoming an Authorized Money Changer, you can do all types of money exchange activities including foreign exchange, and forex trading.

A few specifications covered under the FFMC license are:

 As mentioned under Section 10 of the Foreign Exchange Market Act, 1999, only sanctioned money changers (AMCs) can indulge in currency exchange activities.

  • No person has the authority to promote their money-changing business till they obtain a valid FFMC license released by the RBI.
  • If a person is found guilty of doing a currency exchange business without an FFMC valid license, he is likely to get penalized under the Act ibid.
  • To make things easy for foreign travellers, RBI has discharged detailed directions to specific hotels and businesses on how to deal with foreign notes, coins, and cheques.

Eligibility Criteria Start Currency/Money Exchange Business  

One can expect to get an FFMC license by meeting the following criteria to start money exchange business:

  • Only a business listed under Companies Act 2013, can submit an application to get an (FFMC) Full Fledged Money Changer License.
  • The business should have at least Net Owned Funds (NOF) of INR 25 Lakhs to apply for a single-branch license and INR 50 Lakhs to get a multiple-branch license.
  • The entity should not be facing any ongoing criminal or civil cases with the execution of DRI (Directorate of Revenue Intelligence).
  • The object clause of the Memorandum of Association (MOA) must showcase the currency-exchanging actions that were earlier undertaken by the business.
  • Once the FFMC license is received by the applicant, the business must need to start its currency exchange activities within 6 months from the issuance date of the said License.

Documents Needed for Currency/money Exchange License

Below documents are required to get an FFMC license

  • A copy of the Commencement and Incorporation Certificates of the business.
  • The applicant must need to have a Memorandum and Articles of Association stating a facility for undertaking money exchanging business.
  • Provide copies of the audited Balance Sheet and Profit & Loss Account of the past three years of the business.
  • In addition, furnish a copy of the last audited accounts along with a certificate from the Statutory Auditors confirming the Net Owned Funds (NOF) as of the date of application.
  • Give a statement stating that no criminal actions are ongoing with the Directorate of Enforcement (DoE) and Directorate of Revenue Intelligence (DRI) or have ever been started by them against the business.
  • A statement delineating that proper policy framework on KYC/CFT/AML, following the RBI guidelines, will be in effective on the receipt of the approval of the Reserve Bank and before the start of commercial activities.
  • Provide a certified copy of the board resolution for undertaking a money-changing business.

How to Apply?

Have a look at the following guidelines to give wings to a currency exchange business in India:

  • Draft a detailed application for the FFMC license to the respective regional office of the Reserve Bank of India.
  • Wait to get clearance from the Empowered Committee set up for the said objective.
  • The final call for the issuance of the FFMC license is always with RBI.
  • If the application passes every slot under the ‘fit and proper’ criteria by RBI, you will get the Full Fledged Money Changer (FFMC) License within a time frame of 2 to 3 months.
  • After the receipt of the License, submit a copy of the registration with any documentary proof such as a copy of the lease agreement, rent receipt, etc., to the Regional Office before starting the commercial activities.

Registers and Books of Accounts of Currency Exchange Business

Authorized Money Changers are required to have the following registers with respect to their money-changing transactions:

  • Daily overview and balance book (Foreign currency coins/notes) in form FLM 1.
  • Regular Summary and Balance Book of (Travellers’ cheques) in form FLM 2.
  • Foreign currency acquisitions from the people in form FLM3.
  • Register of purchases of foreign currency coins/notes from authorized money changers and dealers in form FLM 4.
  • Sales of foreign currency coins/notes and foreign currency travellers’ cheques to the public register in form FLM 5.
  • Register of sales of foreign currency coins/ notes to Full Fledged Money Changers / authorized dealers / overseas banks in form FLM 6.
  • Register of travellers’ cheques surrendered to authorized money changers / authorized dealers in form FLM 7.
  • AMCs have to verify all the books and registers, safeguarding that they are latest at regular intervals
  • If there are multiple money exchange businesses, prepare separate registers for each of them.
  • The books of account and registers must showcase a clear picture of transactions about currency changing business.


The Conclusion

Starting your currency exchange business may ask for a number of documents and formalities. This is why it is recommended to consult a FFMC License Consultant like Registrationwala that can help you take the right approach towards business establishment. Consult our business incorporation experts today to know more.



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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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