A money changer license allows you to start a business whose objective is to exchange currencies with foreign tourists or Indian nationals alike. However, to obtain this license, you need to fit certain strict eligibility criteria.
Becoming a Full-Fledged Money Changer is a dream that many possess; especially those who live in regions where tourists are abundant. Rising globalization and India’s increased participation in it has pushed the Reserve Bank of India into providing more and more such licenses.
However, that doesn’t mean that the apex economic authority of India is interested in handing out this currency exchange license like candy. To ensure that only those who have integrity, financial stability and the technical know-how to operate such a business can get the license, the Reserve Bank of India has set specific eligibility criteria. If you happen to fit those criteria, you can go ahead with the application process.
But what if you don’t? What if, despite having the technical know-how and the financial stability, you don’t fit the criteria to become a licensed money changer? Well, the answer to that question is quite simple:
You gain the eligibility to obtain the money changer license by applying the steps that we are revealing through this blog.
What are the eligibility criteria to gain a money changer license in India?
Before we reveal how to become eligible for FFMC license, let’s discuss those eligibility points:
- The applicant should be an incorporated business entity – preferably a private or a public limited company.
- To open a single branch of money changing business, the applicant should have a net worth of INR 25. Lakh. INR 50 lakh of net worth is required in case the applicant is interested in opening multiple money changing branches.
- The heads of your company shouldn’t have any pending case against them in either Department of Enforcement or Department of Revenue Intelligence.
Let’s now dive into each eligibility criterion and discuss how you can fit it.
Incorporation of a business entity
That’s the easiest point to follow. In order you incorporate your Money Changing Company, all you need to do is follow the following steps:
- Choose a unique company name
- Reserve that name by filing a RUN application
- Get the Digital Signatures and Director IDs of the people you want to make the directors of that company.
- Draft Memorandum of Association. Mention in it that your business objective is to provide money changing services to your customers.
- Draft Articles of Association highlighting the rules and regulations of your company.
- File the online application form for Company incorporation along with the requisite documents.
- Wait for a week and receive company incorporation certificate.
Meeting the net worth requirements
In order to have the net worth to apply for the FFMC license, you can choose among two courses of action:
- Bootstrapping: You can reach out to your friends and families (those who believe in your FFMC dreams) and ask them to lend you money. Or, you can do a side job to gather the required funds.
- Get funding: Create an investment pitch to present to banks and investors so that they can lend you necessary funding.
Having a record free of criminal cases
If there is a recent case filed against you in the Department of Enforcement or revenue intelligence, you can’t go the FFMC license. Reserve Bank of India would take one glance at your application and throw it in the dustbin after shredding it.
If you don’t have any criminal history, your colleagues still might. Thus, to get the application accepted, run a background check on them and only choose them to be the part of your company if they don’t have any such history.
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Conclusion
You can become eligible to become an RBI money changer once you have incorporated your company, managed your net worth and ran a background check on your colleagues. We admit that these forex trading license requirements are quite difficult to meet. However, we can help you meet them. Meet these FFMC requirements by reaching out to our FFMC license consultants.