8800517192 Request a Call

Full Fledged Money Changer (FFMCs)

Request a Call Back

Are you a Human? : 4 + 2 =


Under section 10 of Foreign Exchange Management Act, 1999, Reserve Bank of India authorizes certain entities to deal in foreign exchange for specified purpose. These authorized entities mainly are authorized dealer, money changers, off-shore banking unit, etc. These entities are known as Authorized Money Changers (AMCs). There are two types of AMCs who are involved in foreign securities or foreign exchange:

  • Restricted Money Changers (RMC)
  • Full Fledged Money Changers (FFMCs)


FFMC are known as Full Fledged Money Changers authorized by RBI to deal in the business of Money Changing. They purchase foreign currency from non-residents coming to India or from residents & they also sale foreign exchange for private and business travel purposes. Only authorized entities such as FFMC with valid license are allowed to provide foreign exchange services and can deal in money changing activities. Under the directions issued by RBI many firms and hotels for smooth and hurdle free business are also offered registration to deal in foreign currency notes coins and traveler’s cheque. These registrations are very important specially for tourist attracted cities.


  • PURCHASE FOREIGN CURRENCY:  FFMC can purchase any foreign currency coins, notes or traveler’s cheques from non-resident traveling to India or residents coming to India from abroad
  • SALE FOREIGN CURRENCY: FFMC are also allowed to sale Indian Rupees to foreign tourist against their international debit/credit cards through necessary actions for full reimbursement through any normal banking channels.
  • FRANCHISE AGREEMENT: FFMC can also carry Restricted Money Changing activities by entering into franchisee agreement. This involves activities like conversion of foreign currency notes, coins, and traveler’s cheques into Indian currency.
  • OTHER ACTIVITIES: FFMCs can also sale foreign currency for the sole purpose of:
  • •Private travel •Business travel •Forex pre-paid cards


There are the following types of FFMC license issued by RBI to authorized entities

  • AD category-I Banks
  • ADs category- II
  • Full Fledged Money Changers


FFMC license can be obtained by following eligible entities:

  • An entity being a company must be registered under companies act, 1956 or companies act, 2013.
  • Company applying for FFMC license must have prescribed minimum net owned fund:
    •Rs. 25 Lakh- in case entity seeks to apply for Single Branch FFMC license •Rs. 50 Lakh- in case entity seeks to apply for Multiple Branch FFMC license
  • Any person who carries on the business of money changing without any proper license will be heavily penalized.


Following are the documents required to be submitted with application in the prescribed form in order to obtain license:

  • Copy of Certificate of Incorporation (CoI) of a company
  • Copy of Memorandum of Association & Article of association which contains the provisions that authorize it to do the business of money changing. In case there is no such provision, make the suitable amendment for the same.
  • Latest audited financial statement along with the statement of Net Owned funds certified by statutory auditors.
  • Copies of audited balance sheet and P&L Account of proceeding three years.
  • Applicant’s bank needs to give a confidential report which has to be in a sealed cover.
  • A declaration to the effect that there is no proceeding have been initiated or pending with DoE or DRI or any other law enforcing authority against the applicant company or its director.
  • Complete details of associated company if they operate in any financial sector, like NBFCs, etc.
  • Resolution needs to be passed by an applicant company for authorizing the company to carry on the business of money changing. A certified true copy of such resolution is also required.


FFMC license are issued on selective basis only to those entity who comply with licensing requirements. Following are the basis of approval for obtaining a license:

  • Compete application in a prescribed format needs to be submitted to regional office of Reserve Bank of India.
  • An application has to fulfill the “Fit & Proper” criteria set by RBI. In case of any proceeding is initiated or pending by DOE or DRI, the applicant will not be considered to fulfil “Fit & Proper” criteria. And in case all the requirements are in up to the mark and RBI is satisfied, FFMC license is issued within 2 months.
  • An applicant has to obtain clarity from empowered committee; only then regional office will consider an application. An empowered committee is set up by RBI for this purpose.
  • It is then final decision of Reserve Bank of India to either approve an application and grant a license. Or reject the same. RBI decision will be final and binding upon an applicant company and its director.


  • After an approval an applicant before commencing the business needs to submit any rent receipt, registration under shop & establishment, Copy of lease agreement or any such documentary evidence to the regional office of RBI.
  • FFMC should commence its business within 6 months from issuance of license by RBI.
  • FFMC should display the approved money changing license issued by RBI outside of each of its business place.
  • Every FFMCs must carry on the business of money changing in accordance with rules, terms & conditions stated by RBI for this purpose.
  • FFMC must get done audit of all its transaction done by them from time to time.
  • Audited balance sheet must be submitted by an entity to regional office annually.


Following documents or records must be maintained by FFMC in connection of its business of money changing activities:

  • Form FLM-1 for details of foreign coins and notes.
  • Form FLM-2 for details of travelers’ cheque
  • Form FLM-3 for details of registers to be maintained for all the purchases of foreign currency.
  • Form FLM-4 for all the purchases of foreign currency, notes, coins from money changers or authorized dealers.
  • Form FLM-5 for the details of sale of foreign currency, notes, coins or traveler’s cheque to the public.
  • Form FLM-6 for the details of sale of foreign currency, notes, coins to the authorized dealers or FFMCs or overseas banks.
  • Form FLM-7 for surrender of travelers’ cheques to authorized dealers or authorized money changers.

Frequently Asked Questions

  • 1. When an application should be made for renewal of FFMC license?

    An application for renewal of license should be made before 1 month from the date of its expiry.

  • 2. Can a renewal application be made after expiry of license?

    No, application for the renewal of license is not accepted after the license is expired.

  • 3. Can a FFMC carry on the business of money changing at any additional place of business?

    No, FFMC is not allowed to carry the business of money changing at any other additional place other than the place of permanent business. It has to take a prior approval of RBI for the same.

  • 4. What is the objective of RBI for authorizing the business of money changing?

    Foreign Tourist or residents going abroad can easily access to foreign currency along with ensuring customer service.

  • 5. Can a money changing business be carried on without taking a license?

    No, a person cannot carry on the business of money changing until he obtains a valid license from RBI otherwise, he will be heavily penalized.

  • 6. How is Net Owned Fund calculated?

    Net owned fund= Owned fund – Amount of money invested in subsidiary/ company/ other non-banking financial companies. [owned fund= (Paid up capital + Free Reserve + Credit balance in P&L account) – (Accumulated Loss)

Top Rated Lawyers

Trusted By


Transform your Business. Subscribe our Newsletter.