FULL FLEDGED MONEY CHANGER (FFMC )REGISTRATION

Money changing business can be undertaken by Authorised Money Changers (AMCs) which are authorised by the Reserve Bank under Section 10 of the Foreign Exchange Management Act, 1999. No person shall carry on or advertise that he carries on money changing business unless he is in possession of a valid money changer’s licence issued by the Reserve Bank. Any person found undertaking money changing business without a valid licence is liable to be penalised under the Act ibid.

An AMC can be a Full Fledged Money Changer (FFMC), Authorised Dealer Category -I Banks (AD Category–I Banks) and Authorised Dealers Category – II entities (ADs Category–II) which are authorised by the Reserve Bank to deal in foreign exchange for specified purposes. This document contains the various instructions relating to licensing and operational guidelines for the AMCs.

Full Fledged Money Changer (FFMC)

‘Full Fledged Money Changer (FFMC)’ is an authorized money changer authorised to purchase foreign exchange from non-residents visiting India and 3 residents, and to sell foreign exchange for private and business travel purposes only.

FFMCs are authorised to purchase foreign exchange from non-residents visiting India and residents, and to sell foreign exchange for private and business travel purposes only.

 The guidelines for issue of new FFMC licence and renewal of FFMC licence, branch licensing, approval for appointment of agents / franchisees and Know Your Customer (KYC) / Anti Money Laundering (AML) / Combating of Financing of Terrorism (CFT) Guidelines for Authorised Persons (AP) are given below.

 (i) Entry Norms

(a) The applicant has to be a company registered under the Companies Act, 1956/2013

 (b) The minimum Net Owned Funds (NOF) required for consideration as FFMC are as follows:

Category                                             Minimum Net Owned Funds

Single branch FFMC                          Rs.25 lakh

Multiple branch FFMC                      Rs.50 lakh

Note :- The Net Owned Funds of applicants, other than banks, should be calculated as per the following.

 (a) Owned Funds :- (Paid-up Equity Capital + Free reserves + Credit balance in Profit & Loss A/c) minus (Accumulated balance of loss, Deferred revenue expenditure and Other intangible assets)

(b) Net Owned Funds :- Owned funds minus the amount of investments in shares of its subsidiaries, companies in the same group, all (other) non-banking financial companies as also the book value of debentures, bonds, outstanding loans and advances made to and deposits with its subsidiaries and companies in the same group in excess of 10 per cent of the Owned funds.

(ii) Documentation Application in the prescribed form should be submitted to the respective Regional Office of the Foreign Exchange Department of the Reserve Bank under whose 4 jurisdiction the registered office of the applicant falls, along with the following documents:

(a) Copy of the Certificate of Incorporation.

(b) Memorandum and Articles of Association containing a provision for undertaking money changing business or an appropriate amendment to this effect filed with the Company Law Board.

(c) Copy of the latest audited accounts with a certificate from the Statutory Auditors certifying the Net Owned Funds as on the date of application. Copies of the audited Balance Sheet and Profit & Loss Account of the company for the last three years, wherever applicable.

(d) Confidential Report from the applicant's banker in a sealed cover.

(e) A declaration to the effect that no proceedings have been initiated by / are pending with the Directorate of Enforcement (DoE) / Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities, against the applicant company or its directors and that no criminal cases are initiated / pending against the applicant company or its directors.

(f) A declaration to the effect that proper policy framework on KYC / AML / CFT, in accordance with the guidelines issued by Reserve Bank of India, Department of Banking Regulation, Central Office as referred to in their ‘Master Direction – Know Your Customer (KYC) Direction, 2016’ and other instructions in this regard so far and from time to time in future, mutatis mutandis, applicable to APs, will be put in place on obtaining the approval of the Reserve Bank and before commencement of operations.

(g) Details of sister / associated concerns operating in the financial sector, like NBFCs, etc.

(h) A certified copy of the board resolution for undertaking money changing business.

 

 

(iii) Basis for Approval

 (a) Since several FFMCs are already functioning, fresh licences will be issued on a selective basis to those who comply with all the licencing requirements.

(b) 'Fit and proper' criteria for the applicant FFMCs # If any case by DoE / DRI or any other case by any other law enforcing authorities, is initiated / pending against any company / its directors, the company will not be considered as 'fit and proper' and its application will not be considered for licencing as FFMC. (# Also applicable to non-bank ADs Category - II)

(c) ‘Fit and proper’ criteria for directors of FFMCs

 * - Please see SECTION- VIII for the details in this regard. (* Also applicable to non-bank ADs Category - II)

(d) Clearance by the Empowered Committee The request for issuance of FFMC licence would be considered by the Regional Office concerned of the Reserve Bank on the basis of the clearance by an Empowered Committee, set up for the purpose.

(e) Reserve Bank’s decision in the matter of granting approval or otherwise will be final and binding.

(f) On obtaining approval from the Reserve Bank, a copy of the registration under Shops & Establishment Act or any other documentary evidence such as rent receipt, copy of lease agreement, etc. should be submitted to the Regional Office concerned of the Reserve Bank before commencement of the business.

(g) The FFMC should commence its operations within a period of six months from the date of issuance of licence and inform the Regional Office concerned of the Reserve Bank.

(h) New FFMCs should carry out their activities as per the instructions specified in SECTIONS V and VI below and other instructions issued by the Reserve Bank from time to time.

[Note:- Urban Cooperative Banks (UCBs), fulfilling the eligibility norms, would be considered for authorization as Authorised Dealer Category-I / Authorised Dealer Category-II only.]