Full Fledged Money Changer License

A business that carries out transactions in Forex currency exchange must obtain an FFMC License in India. The Foreign Exchange Management Act (FEMA) 1999, Section 10 authorizes the Full Fledged Money Changer License under the regulation of the RBI (Reserve Bank of India). The company that has Full Fledged Money Changer License approval will be considered as an authorized money changer (AMC). And the money-changing undertaking business without such a License will be penalized heavily under the FEMA act. The sole objective behind the License is to help the tourist and the residents to access foreign exchange facilities in an easily accessible way.Full Fledged Money Changer License stands for full-fledged money changer and is acquired by a company that carries out the business related to the forex currency exchange. In this write-up, we will learn about the characteristics of an FFMC License, the documents, and the procedure required to obtain aFull Fledged Money Changer License.

Requirements

There are several conditions that are required to apply for a FFMC License, which are as follows:

• The company must obtain a registration from the registrar of the companies as per the Companies Act 2013.
• To obtain a License for a single branch, the company must have a fund of 25 lakh, and for multiple branches, the amount is 50 lakhs.
• The primary objective of a company that is stated in the object clause should not be anything other than money-changing business.
• The company should not have any discrepancy in its track record, and there also must not be any kind of pending cases with the Department of Revenue Intelligence.
• An audit must be conducted to rectify the violation by the concerned company.

Objectives

The purposes of obtaining an FFMC Licensein India are as follows:

• It gives access to foreign exchange options. It falls under one of the primary objectives of the License as it plays an essential role in providing the individuals who are visiting the country with access to Foreign Exchange Services and ensuring that the tourists can obtain the currency while they stay in the country.
• It also ensures that foreign exchange activities are promoted; therefore, the Indian government also facilitates foreign exchange activities and encourages such practices.
• It helps facilitate the exchange of foreign currency notes and coins. It checks into Indian currency, and this service is available to both the non-resident and the residents of India.
• It allows the issuance of store value cards; it issues charge cards to residents who travel abroad to ensure efficient means of making foreign transactions.
• It also helps cross-border transactions by offering a vast range of Foreign Exchange Services, and this method benefits the Traveller's international trade commerce and serves as the intermediary in the foreign exchange market.

Advantages

There are several advantages of obtaining an FFMC Licensein India, as follows:

• It provides a competitive edge in the foreign market as the customers are more likely to choose an FFMC for credibility and assurance than an unregulated option.
• It helps in the Purchase and sale of foreign exchange. It offers facilities for individuals and businesses to bring in or bring out foreign currency, thereby enhancing the accessibility of the money in the country.
• It helps in the authorized money exchange for the residents as well as the non-residents of India, thereby facilitating a seamless transaction throughout the banking channels and ensuring that the exchange rates are aligned according to the market circumstances.
• It also helps in the function of the services just exchange and offers various financial product services such as travel services, smart cards, etc.
• The FFMC, along with the certificate of encashment, adds an extra layer of legitimacy to transactions and dealings that have been done.
• The Full Fledged Money Changer License not only distinguishes the License operator from the unlicensed operator but also ensures credibility and reliability in the foreign exchange market for long-term growth and success in the country's economy.

Disadvantages

Obtaining a Full Fledged Money Changer License can be an expensive one, and the compliances that have to be followed can incur significant costs:

• Obtaining the Full Fledged Money Changer License is also time-consuming, including extensive documentation and compliance with the regulatory bodies.
• The Full Fledged Money Changer License also comes with strict regulations and huge compliances, which can even limit the flexibility of and increase the burden of the Administration.
• Certain FFMCs are strict on the types of that they can provide services to.

Documents

The documents required for FFMC Licenseare as follows:

• The incorporation certificate of the company
• The Memorandum of Association (MOA) and Article of Association (AOA) of the company as per the Companies Act 2013
• The audit accounts of the company, the statutory auditors, and the net-owned funds
• The balance sheet profit and loss account within three years from the date of application of the License
• The certified copy of the board resolution must be only related to the money-changing business

Process

The process of obtaining a Full Fledged Money Changer License, which the Reserve Bank of India regulates, is as follows:

1. There must be a complete and detailed application for the Full Fledged Money Changer License that must be submitted to the Reserve Bank of India regional office
2. The application must be submitted along with the documents that are mentioned in the above documents section
3. The director of the business must be fit and proper as per the criteria mentioned under the Reserve Bank of India.
4. If the Reserve Bank of India is satisfied with the application that has been made along with the documents, then the Full Fledged Money Changer License will be issued within three months.
5. There must also be clearance required by the empowered committee for approval.

Why Adviso?

FFMC Licenseinvolves various requirements, document preparation, and pre-and post-compliance obligations. It is essential to comply with the specific terms of the Full Fledged Money Changer License. Obtaining the Full Fledged Money Changer License can be a tedious process without professional support. That’s where Adviso comes in. At Adviso, we provide expert services for society registration online approvalunder the Full Fledged Money Changer License. Our Lawyers, CA, and CS experts guide you through every step of the journey to ensure your company lists smoothly and efficiently.With Adviso's expertise and assistance, you can easily navigate the complexities of FFMC, saving time and ensuring compliance with all necessary regulations.