FFMC License allows you to become a Money Changer by starting a currency exchange business. However, to procure this license, you must first earn eligibility. This article states the eligibility criteria you need to meet to procure this license in addition to giving tips to meet them.
India’s infatuation towards foreign trade motivated the government to come forth with a regulation that allows small and large businesses to provide money exchange services. The result was the FFMC license. FFMC license allows you to become a Full Fledged Money Changer, a business entity that provides currency exchange services to tourists.
While FFMC License is all you need to become a money changer, you need a lot more to get the FFMC license.
Let’s make you eligible to obtain the license that turns you need to money exchange service provider in India.
You need a Private Limited Company to get the FFMC license
Applying for the money changer license isn’t a possibility as an individual. Exchanging currency is a complex business, requiring an organization that can handle its multiple aspects. Therefore, the Reserve Bank of India only takes the application of Private limited companies into consideration.
Meeting this eligibility criterion
Follow the steps given below to establish a private limited company in India:
- Choose a suitable name for your company.
- Reserve that name using the RUN application.
- Draft Memorandum of Association
- Create an Articles of association
- Get the DSC and DIN for all your directors
- File the online company incorporation application, and
- Finally, get the certificate of incorporation.
Other Important Certificates: Bee Certification
Your memorandum of Association should specify that your business objective is conducting money changing activities
It’s imperative that the RBI knows the purpose for which you seek the FFMC License. It can only get a clear picture of it through your Memorandum of Association. Therefore, when drafting the MOA, you must ensure that every aspect of the money-changing business is covered. If it is not, the RBI will have a hard time considering your application as it will have difficulty understanding the point of issuing you the license.
How to meet this eligibility criterion
You can consult with business consultants at the time of incorporating your company. Let them draft your Memorandum of Association instead of taking up the task yourself. As you get the correct MOA by your side, you will passively abide by the RBI regulations of having a concise business objective. Consequently, the FFMC license becomes accessible to you.
You must meet the net worth requirements
Reserve Bank of India divides the net worth requirement for the FFMC license into two parts:
- For a single branch,
- And, for multiple branches.
For a single branch, your net worth must be at least INR 25 Lakh.
To start multiple branches of the FFMC license, your net worth must be at least INR 50 lakh.
Meeting this eligibility criterion
From bootstrapping to startup registrations, the ways for you to meet this eligibility criterion are many. Here are the best funding tips for you to choose from:
- You can ask your friends and family to put up some money,
- If you startup registration, you can ask for bank loans, Or,
- You can consult business consultants to develop a funding plan so that you can attract investors.
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After you meet these eligibility criteria, you will be able to gain the certificate
With each eligibility requirement met, you get closer to the FFMC license that you covet. However, once you meet the eligibility criteria, important tasks such as filing the application remains. For that purpose, you must contact our experts as soon as possible.
