To apply for an FFMC (Full-Fledged Money Changer) license in India, there is a structured process that must be followed. The Reserve Bank of India (RBI) is responsible for granting this license, which is necessary for businesses dealing with foreign currency exchange. Here's a step-by-step guide to help you understand how to apply for FFMC license:
1. Check Eligibility Criteria
Before you apply for FFMC license, ensure that your business meets the following eligibility conditions:
Company Registration: The business must be a registered company under the Companies Act, 2013.
Net Owned Funds: A minimum net owned fund of ₹25 lakh for a single branch or ₹50 lakh for multiple branches is required.
Business Objective: The company’s Memorandum of Association should clearly state that the company will engage in foreign exchange business.
No Pending Legal Cases: The company should not have any pending legal cases with law enforcement authorities such as the Department of Revenue Intelligence or Enforcement Directorate.
2. Prepare Required Documents
The next step in the application process is to prepare the necessary documentation:
Incorporation Certificate: A copy of the company’s incorporation certificate.
Financial Statements: Audited balance sheets and profit and loss accounts for the last 3 years.
Banking Details: A report from the bank confirming the financial standing of the company.
Board Resolution: A resolution passed by the company’s board authorizing the application for an FFMC license.
Business Plan: A detailed business plan outlining how the foreign exchange operations will be conducted.
3. Submit the Application
Once the documents are ready, you can proceed to fill out the application form. The application must be submitted to the RBI's Regional Office for Foreign Exchange at the location of your registered office. Ensure that all details are accurate to avoid delays.
4. RBI Evaluation
After submission, the RBI will review your application. The RBI checks for compliance with eligibility requirements and evaluates the submitted documents. This process may take 2-3 months, during which the RBI may request additional information.
5. Receive the License
If your application is approved, the RBI will issue the FFMC license. You will be allowed to legally engage in foreign exchange transactions. However, ensure that you start your operations within six months from the date of receiving the license.
6. Renewal of License
The FFMC license is valid for a specific period, and you must apply for renewal before it expires to continue operations legally.
By following these steps, you can apply for FFMC license and ensure that your business is legally compliant for conducting foreign exchange activities.