Guidelines for Issuance of Full Fledged Money Changer Licence (FFMCs) By CS Megha Trivedi


FFMCs are authorized 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 license and renewal of FFMC license, 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 and 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.

 
CHECKLIST FOR OBTAINING FULL FLEDGED MONEY CHANGER (FFMC) LICENCE:
  1. Copy of the Certificate of Incorporation.
  1. 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.
  1. 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.
  1. Confidential Report from the applicant's banker in a sealed cover.
  1. 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.
  1. 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.
  1. Details of sister / associated concerns operating in the financial sector, like NBFCs, etc.
  1. A certified copy of the board resolution for undertaking money changing business.

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