Home / Full Fledge Money Changer (FFMC) License

Updated on 6 Mar 2021    9.00 AM IST | 4 min read

As per provisions of foreign exchange management act, 1999, every company involved in foreign exchange activity or cash changing activity in India has to mandatorily acquire a full fledge money changer license (FFMC) from reserve bank of India.

All FFMC license holders of India and companies which decides to obtain an FFMC license in India needs to follow the master circular & provisions of FEMA, 1999. After getting FFMC license, companies become authorized to purchase foreign exchange from non-residents & residents of India and sell that foreign exchange for private & business travel purposes only to the people visiting abroad.

In order to remove the difficulties faced by the tourists & foreign visitors, registrations are provided to certain firms & hotels also so that they can deal in foreign currency notes, coins & traveler cheque’s as per instructions issued by the reserve bank of India. If any person starts a business without a valid FFMC license, the person has to face heavy penalties from RBI.

Types Of FFMC License

There are three types of FFMC license categorized as follows –

  1. Authorized dealer category – I (Banks)
  2. Authorized dealer category – II (Authorized dealers)
  3. Fill fledge money changers (FFMC)
What Is Included In Our Package?

Eligibility Consultation

Document Preparation

Application Drafting

Government Fees

Eligibility For FFMC License

Every company is eligible to apply for the FFMC license in India after meeting the following conditions –

  1. 1

    In order to apply for FFMC license, the first and the foremost condition is that an applicant company should be registered with registrar of companies under companies act 1956 or 2013.

  2. 2Money changing activity should be the main activity of the company in the object clause of MOA.

  3. 3A company should have a net owned fund of Rs.25 Lakhs in order to apply for a single branch license whereas for a multiple branch license, a company should have an owned fund of Rs.50 Lakhs.

  4. 4

    In case of authorized dealer category, every person applying for FFMC license should conduct regular spot audits in order to ensure that there is no case pending against the company with Department of enforcement or department of revenue intelligence.

Documents Required To Apply ForFFMC License

The documents needed to apply for FFMC license are given below –

  • In order to apply for FFMC license, an application form is needed to be submitted as per annexure-II prescribed by reserve bank of India master circular on memorandum of instructions on money changing activities.
  • Copy of incorporation certificate of the company
  • Copy of commencement of the business.
  • Copy of last three years audited P&L account and balance sheet.
  • Copy of memorandum of association and articles of association having object clause related to money changing activities.
  • Certificate from statutory auditor certifying the net owned funds as on the date of application.
  • Customer information report (Confidential report) from the bank addressed to RBI in a sealed cover.
  • Certified copy of the board resolution for undertaking the money changing business.
  • As per the guidelines issued by the reserve bank of India, a declaration that a proper policy framework will be placed for Anti-money laundering, know your customer and combating the financing terrorism before commencement of operation and after obtaining the FFMC license from RBI.

Procedure For Getting The FFMC License

The procedure for getting the FFMC license is as follows –

In the first stage, license application is needed to be submitted along with the necessary documents to the foreign exchange department of the regional office of RBI (where the registered office of the company is situated)

In the second stage, the submitted application is checked by the foreign exchange department. If application is found satisfactory as per “fit and proper criteria”, FFMC license will be issued by the RBI within a period of 2-3 months. If it is found that any case is pending against a company, the same will not be considered eligible for FFMC license.

In the third stage, company will get the clearance by the empowered authority.

In the final step, RBI takes the decision to grant approval or to reject the application.

Post Approval Requirements Of FFMC License

The post approval requirements of FFMC license are as follows –

New FFMC should carry out their activities as per the instructions given by RBI.

Registration copy under shop & establishment act or any other documented evidences such as lease agreement copy, rent receipt should be submitted to the regional office of the RBI before the commencement of the business.

Copy of FFMC license issued by RBI should be displayed on each business location.

The system of concurrent audit should be implemented in order to check all the transactions undertaken by them.

FFMC’s are needed to submit their annual audited balance sheet to the regional office of the reserve bank of India.

Maintenance Of Records & Registers

The license holder or the authorized money changer has to mandatorily maintain the following registers in relation to money changing transactions –

  • Daily summary and balance books of foreign currency coins or notes in form FLM1.
  • Traveller’s cheque in FLM2.


Register containing purchases of foreign currency coins or notes from authorized dealers and money changers in form FLM4.

Register containing sales of foreign currency coins or notes and traveller’s cheques to the public in form FLM5.

Register containing sales of foreign currency coins or notes to authorized dealers / full fledge money changers/ overseas banks in form FLM6.

Register containing traveller’s cheque surrendered to authorized dealers/ authorized money changers exported in form FLM7.

Activities Undertaken By FFMC

  1. 1

    FFMC’S may enter into franchise agreements at their option to carry out restricted money changing business. Money changing business includes conversion of foreign currency coins, notes or traveller’s cheques into Indian rupees.

  2. 2FFMC’s or franchisees may freely purchase foreign currency coins, notes and travelers cheques from residents as well as non-residents.

  3. 3FFMC’s may sell Indian rupees to foreign visitors or tourists against international debit or credit cards and even take prompt steps to obtain reimbursement through normal banking channels.

  4. 4

    FFMC’s may sell foreign exchange for the following motives –

    • Business visits
    • Private visits
    • Forex prepaid cards.

Renewal Of FFMC License

An application for the renewal of FFMC license must be made before one month from the expiry date of the license. No renewal applications will be considered after the expiry of the license.

Revoking Of FFMC License

RBI has the full right to revoke the license granted to any FFMC at any time if –

  • It is important to be revoked in the public interest.
  • Any FFMC failed to comply with any condition or any provision of FEMA act, 1999.

Penalty Provisions

As per section 10(1) of the FEMA act 1999, no person can carry out a business activity related to money changing activity unless they possess a valid FFMC license from RBI. In case any person is failed to comply with the provisions, he needs to face the heavy penalty from RBI.

FFMC License FAQ’S

According to section 10 of foreign exchange management act, 1999 – entities which are approved by RBI to do money changing business are called full fledge money changer’s (FFMC’s).
Any company registered under companies act, 1956 or 2013 are eligible to apply for FFMC license permit in India.
The license application is needed to be submitted along with the necessary documents to the foreign exchange department of the regional office of RBI.
The validity period of FFMC license is 1 year. Therefore, license must be renewed after every one year.
There are three types of FFMC licenses and they are categorized as follows –
  1. Authorized dealer category – I (Banks)
  2. Authorized dealer category – II (Authorized dealers)
  3. Full fledge money changers (FFMC)

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