FFMC License
FFMC stands for Full-Fledged Money Changer. In India, an FFMC is a financial entity that is authorized by the Reserve Bank of India (RBI) to undertake money-changing activities. These activities involve the buying and selling of foreign currencies, traveler's cheques, and prepaid forex cards for non-trade current account transactions.
Here are the key points regarding the FFMC license in India:
Authorization by RBI: To operate as an FFMC, a company or entity needs to obtain a license from the RBI under the Foreign Exchange Management Act (FEMA), 1999.
Eligibility Criteria: Entities eligible for an FFMC license include companies incorporated in India under the Companies Act, 1956/2013, and those with a minimum net owned fund (NOF) of INR 25 lakhs.
Application Process: The application for the FFMC license is submitted to the Regional Office of the RBI under whose jurisdiction the registered office of the company falls.
Documents Required: The application for the FFMC license should be accompanied by necessary documents, including the company's incorporation certificate, memorandum and articles of association, board resolution, audited balance sheets, and other relevant financial documents.
Security Deposit: As part of the licensing process, the applicant needs to deposit a security amount with the RBI. The amount of security deposit may vary based on the business volume and other factors.
Renewal and Compliance: The FFMC license is typically valid for three years and needs to be renewed thereafter. FFMCs are required to comply with the regulations and guidelines issued by the RBI for money-changing activities.
Scope of Activities: FFMCs are allowed to deal with foreign currencies and provide services related to the sale and purchase of foreign exchange to individuals for non-trade purposes, such as travel, education, medical treatment, etc.
Operating as an FFMC in India requires adherence to the regulatory framework set by the RBI. FFMCs need to comply with the RBI guidelines on money-changing activities, foreign exchange management, reporting requirements, and anti-money laundering norms.