Clients
Authorised Money Changers (AMCs) are companies that have been approved by the Reserve Bank of India (RBI) as per Section 10 of the Foreign Exchange Management Act of 1999. Under which, an AMC may either register as a Restricted Money Changer (RMC) or a Full Fledged Money Changer (FFMC). The Act states that an Authorised Person essentially means an authorised money changer, dealer, off-shore banking unit or some other individual, for the time being, authorised u/s 10 to engage in the business of foreign securities or foreign exchange. A license is required by FFMCs to buy and sell foreign exchange from residents or non-residents visiting India for specifically approved purposes.
An FFMC is an authorized company who may purchase and sell foreign exchange from or to non-residents and residents of India for private and business travel purposes only to the people visiting abroad. These authorized money changers are the only entities, allowed in the country to deal in money changing activities and offer necessary foreign exchange services. To remove the difficulties faced by foreign visitors and tourists, certain firms and hotels have also been offered the license for dealing in foreign currency and traveller’s cheques under the directions issued by RBI. No other person is entitled to carry on money changing business, or even advertise, unless they own a valid license from RBI. Otherwise, it attracts penalties under the Act. The corporate with a valid license from RBI shall be regarded as Full Fledged Money Changers (FFMC).
Following activities can be undertaken by Full Fledged Money Changer, as allowed by RBI:
Enter into a franchise agreement to carry on the Restricted Money Changing business. This business basically involves the converting foreign currency notes, coins or travelers’ cheques into Indian Currency (Rupees).
From the residents as well as the non-residents of India.
Sell Indian Currency to foreign visitors or tourists against International Debit Cards/International Credit Cards and to obtain reimbursements through normal banking channels.
Sell foreign exchange for:
Following are the documents that are required at the time of obtaining a DPCC certificate:
A copy of Certificate of Incorporation (COI).
Copy of MoA and Articles of Association (AoA) with a provision for undertaking money changing activities. Or if this was introduced later as an amendment to the same effect, then a Certified Copy of Board Resolution to undertake money changing business.
Certified copy of the latest audited accounts with a declaration from Statutory Auditors attesting the NOF as on the Date of Applying for the License.
Copies of the audited Balance Sheet and Profit & Loss Account of the Entity for 3-years prior to the Date of Application for the License, wherever applicable.
A Confidential Report from the company’s banker in a sealed manner.
Information concerning the associated/group entities operating in the financial sector such as NBFCs.
Must be registered under the Companies Act.
Must at least have Net Owned Fund (NOF) of Rs. 25 lakh to apply for a single-branch license and Rs. 50 lakh for a multi-branch license. This NOF required to be maintained on an ongoing basis.
The object clause of the Memorandum of Association (MoA) must indicate the activity of currency change that is to be undertaken by the Entity.
No civil or criminal cases are pending against the entity with the DoE (Directorate of Enforcement)/DRI (Directorate of Revenue Intelligence). No application for FFMC license shall not be considered if any case has been initiated against the applicant/its directors/promoters.
The process of obtaining an FFMC License from RBI, after the company has been registered, is as follows:
A complete and detailed application for the Full Fledged Money Changer License is submitted to the regional office of RBI under whose jurisdiction the company is situated.
Clearance by the Empowered Committee is compulsory and RBI’s decision for granting or rejecting the application would be final and binding.
The Director of the applicant entity would be reviewed for being “Fit and Proper” by RBI. If everything is in compliance and RBI is satisfied, then the Full Fledged Money Changer (FFMC) License would be issued within 2 to 3 months.
Any company desirous of operating as an FFMC needs to obtain below licenses
Full Fledged Money Changers License
Authorised Dealer Category-I Banks (AD Category–I Banks)
Authorised Dealers Category-II (ADs Category–II)
Sell foreign exchange for:
Once the License has been granted, the Full Fledged Money Changer must:
Commence its business activities within 6-months from the date of issuance of the Forex License and should intimate RBI, without fail.
Attempt to widen the network for providing currency changing facilities using a Franchise Agreement to appoint franchisees of all the three categories of AMC:– AD Category – I Bank, AD Category – II and FFMC.
The franchisee’s books need to be inspected, annually, to ensure that its activities comply with the terms and conditions as updated by RBI from time-to-time.
A copy of the registration under the Shops and Establishment Act or any other documentary address proof, such as rent receipt or lease agreement must be submitted to RBI’s Regional Office.
Display, at each of its business places, a copy of the license issued by RBI.
Have a system of Concurrent Audit of all the transactions undertaken.
Submit its annual audited balance sheets to the Regional Office of RBI.
Keep the license renewed.
The FFMC license needs to be renewed on an annual basis. The license holder has to apply for renewal every year along with the relevant documents to RBI.
The renewal application must be made at least two months prior to the expiry date of the FFMC license. Once a renewal has been applied for, the license shall be valid until the expiry date or rejection date as the case may be.
No request to restore a money changer’s license is acceptable after the expiry of the FFMC license.
LegalRaasta was founded on the principle that sophisticated legal and taxation services should be simple, modern, and inexpensive. We can serve our clients more efficiently thanks to cutting-edge practise technology.
B-300 Saraswati Vihar,Pitampura, New Delhi-110034
By continuing past this page, you agree to our Terms and Conditions Privacy Policy and Refund Policy | Copyright © 2015-2024 LegalRaasta.com| All Rights Reserved