How to Register a Full-Fledged Money Changer (FFMC) with the RBI: Step-by-Step Guide

How to Register a Full-Fledged Money Changer (FFMC) with the RBI: Step-by-Step Guide

If you’re planning to enter India’s foreign exchange market, registering as a Full-Fledged Money Changer (FFMC) with the Reserve Bank of India (RBI) is the legal and essential first step. Under the Foreign Exchange Management Act (FEMA), 1999, only authorized entities can carry out money changing activities like buying/selling foreign currency, issuing forex cards, and dealing in travelers’ cheques.

In this comprehensive guide, we’ll walk you through the step-by-step process to obtain an FFMC license from the RBI, including eligibility criteria, required documents, compliance mandates, and renewal procedures.

✅ What is a Full-Fledged Money Changer (FFMC)?

A Full-Fledged Money Changer is a non-banking financial company authorized by the RBI to deal in foreign exchange for limited and approved purposes. FFMCs cater to:

  • Individuals traveling abroad for personal or business reasons
  • Tourists visiting India
  • Hotels, travel agencies, and corporates in need of currency services
  • Distribution of prepaid forex travel cards in collaboration with authorized dealers

FFMCs cannot accept deposits or lend money, and they must follow strict RBI norms under the Master Direction on Money Changing Activities.

🏢 Eligibility Criteria for FFMC License in India

Before applying for the FFMC license, ensure your company meets the RBI’s basic eligibility requirements:

1. Company Registration

The applicant must be a company registered under the Companies Act, 2013.

2. Minimum Net Owned Funds (NOF)

  • ₹25 Lakhs for single branch operations
  • ₹50 Lakhs for multiple branches

3. Clean Track Record

Directors/promoters should have no criminal or financial violations. No ongoing investigations or litigation should exist.

4. Fit and Proper Criteria

RBI evaluates the reputability and integrity of directors and shareholders.

5. Operational Office Space

A secured, accessible office is mandatory before license issuance.

📝 Documents Required for FFMC Registration

To apply for an FFMC license, compile the following documents:

  • Duly filled Annexure-II Application Form
  • Certificate of Incorporation
  • MOA & AOA with forex-related clauses
  • Board Resolution for license application
  • Net Owned Funds Certificate by CA
  • Audited financials for the last 3 years (if applicable)
  • KYC documents of directors/shareholders
  • CIBIL Reports
  • Business plan, cash flow forecast, and compliance policy
  • Rent agreement and NOC from landlord
  • Identity proofs and photographs of promoters

📌 Step-by-Step Process for FFMC Registration

Step 1: Business Planning

  • Decide the number and locations of branches
  • Draft a business model and risk assessment strategy

Step 2: Incorporate the Company

  • Register under the Companies Act, 2013
  • Ensure forex-related objectives are mentioned in MOA

Step 3: Submit the FFMC Application

  • Submit hard copy to the regional RBI Foreign Exchange Department
  • Properly index annexures and supporting documents

Step 4: RBI Scrutiny & Due Diligence

RBI examines:

  • NOF validation
  • Director background
  • Office space verification
  • May request additional documents

Timeframe: Typically 8–16 weeks

📄 Issuance of FFMC License

After successful scrutiny, RBI issues the Certificate of Authorization (CoA) under Section 10 of FEMA, 1999. The FFMC license is valid for one year, and operations must start within 6 months.

📊 Post-License Compliance & Obligations

Once licensed, FFMCs must adhere to strict RBI norms:

1. Start Operations

  • Begin within 6 months of approval
  • Notify RBI in writing

2. Maintain Transaction Records

  • Daily registers for each forex transaction
  • Maintain ID proofs as per KYC/AML guidelines

3. File Periodic Returns to RBI

  • Monthly transaction report (Annexure-III)
  • Annual compliance certificate from a CA
  • Immediate fraud/misconduct reporting

4. Appoint a Principal Officer

  • Responsible for Anti-Money Laundering (AML) compliance

5. Audits

  • Annual internal audits
  • RBI may conduct periodic inspections

🔁 Renewal of FFMC License

You must apply for renewal at least 1 month before expiry. Documents needed:

  • Updated financial statements
  • Revised business plan
  • Changes in directorship (if any)
  • Compliance history and audit reports

⚠️ Restrictions for FFMCs

FFMCs are not allowed to:

  • Accept deposits or give loans
  • Engage in unapproved forex products
  • Work with sub-agents without prior RBI approval

Violations may result in cancellation of license and penalties.

💼 Benefits of FFMC Registration in India

  • Tap into the $100+ billion forex market in India
  • Serve international tourists, NRIs, and corporates
  • Partner with travel companies and airlines
  • High-profit margin and demand in urban centers and airports
  • Legally protected under FEMA & RBI framework

🤝 Need Expert Help? Contact Lal Ghai & Associates

At Lal Ghai & Associates, we offer complete legal and procedural support for FFMC license registration and post-approval compliance. Our team assists with:

  • Eligibility assessment
  • Document preparation
  • Application filing with RBI
  • FEMA and RBI compliance support

👉 Contact us today for a consultation and make your entry into India’s regulated foreign exchange market seamless and hassle-free.