Full Fledged Money Changer (FFMC) Licence
An FFMC licence is the Reserve Bank of India’s authorisation, under Section 10 of FEMA, to buy foreign currency notes and travellers’ cheques and to sell them for foreign travel. Since 6 May 2026, under the Foreign Exchange Management (Authorised Persons) Regulations, 2026, RBI does not consider fresh FFMC applications. We help existing FFMCs renew and comply, and help newcomers use the routes still open.
What it is
A Full Fledged Money Changer (FFMC) is a company RBI authorises to deal in foreign currency notes and travellers’ cheques. It buys them from residents and non-residents, sells them to people going abroad, and can act as an agent under the Money Transfer Service Scheme (MTSS).
The legal base is Section 10 of the Foreign Exchange Management Act, 1999 (FEMA). Since 6 May 2026, authorisation is governed by the Foreign Exchange Management (Authorised Persons) Regulations, 2026 (Notification No. FEMA 401/2026-RB dated 30 April 2026), issued with A.P. (DIR Series) Circular No. 09. Day-to-day conduct still follows RBI’s Master Direction – Money Changing Activities, updated as on 29 September 2026.
The Regulations recognise four kinds of authorised person: AD Category-I, AD Category-II, AD Category-III and FFMC. An FFMC must be a company registered under the Companies Act, 1956 or 2013, so a firm or proprietor would first need a private limited company.
Who it applies to
You already hold an FFMC licence
Companies already holding an FFMC authorisation can continue and renew, if they meet the net owned fund (NOF) floor and the conduct rules.
You run a money changer’s franchise
No fresh franchisee arrangements are allowed. Existing ones must end within two years of 6 May 2026, after which the franchisee can work as a Forex Correspondent (FxC).
You want to start a forex counter
Say a Faridabad travel agency wants to sell currency to its tour groups. Today it would tie up as an FxC, or apply for AD Category-II or III if it meets the higher bar.
Why it matters
Dealing without it is a contravention
The Master Direction is clear that money changing business can only be done by entities RBI authorises under Section 10 of FEMA.
Penalties run to three times the amount
Section 13(1) of FEMA allows a penalty of up to three times the sum involved, or up to ₹2 lakh where the amount cannot be quantified, plus up to ₹5,000 a day while the breach continues.
Banks and partners ask for it
Your bank and MTSS principal expect a valid authorisation, proper KYC and clean concurrent audits.
What changed in 2026
| Point | Before 6 May 2026 | From 6 May 2026 |
|---|---|---|
| Fresh FFMC application | Accepted by RBI regional offices | Not considered, except applications already pending on that date |
| Existing FFMC | Governed by the Master Direction | Continues and can renew with NOF of ₹25 lakh (single branch) or ₹50 lakh (multiple branches) |
| Franchisees | FFMCs could appoint franchisees | No new arrangements; existing ones end within two years |
| Agent model | Franchisees | Forex Correspondent appointed by an AD Category-I or II |
Routes open to you now
| Route | Who can use it | Key condition |
|---|---|---|
| Forex Correspondent (FxC) | Agents of an AD Category-I or II | Selected under the principal’s board-approved policy; no separate RBI authorisation for the agent |
| AD Category-II | Banks, RBI-registered NBFCs, or an FFMC/FxC working for at least two years with average annual forex turnover of at least ₹50 crore | Minimum positive net worth of ₹10 crore |
| AD Category-III | Entities handling forex incidental to their business | Minimum net worth of ₹2 crore |
| Existing FFMC (renewal) | Companies already authorised | NOF of ₹25 lakh or ₹50 lakh |
An AD Category-II can handle non-trade current account transactions allowed under FEMA (except gifts and donations) and trade transactions of up to ₹25 lakh each.
Documents required
Company records
- Certificate of incorporation
- MoA and AoA covering money changing or the proposed forex activity
- Audited financial statements
- Shareholding pattern
Net worth and people
- CA certificate of NOF or net worth
- Fit-and-proper declarations of promoters, directors and key managerial persons
- KYC of directors and promoters
Operations
- Board-approved KYC/AML policy
- List of branches and their addresses
- FLM 8 returns and concurrent audit reports (for renewal)
- Board resolution for the application
How it works
Match your business to a route
We look at your business, turnover and capital and tell you which route fits.
Certify capital and vet the directors
We check NOF or net worth against the floor, issue the net worth certificate and review each director against the fit-and-proper tests: qualification, integrity and no disqualification under the Companies Act, 2013.
File the application on PRAVAAH
The application goes through RBI’s PRAVAAH portal to the regional office that covers your registered office.
Reply to RBI’s queries on time
RBI may ask for more information. For FFMC applications pending when the Regulations came in, it must be given within thirty days.
Keep returns and audits on schedule
In practice, most trouble starts after approval. We track FLM 8, concurrent audit, KYC and renewal dates.
Timelines
FLM 8 by the 10th
The monthly statement of currency purchases and sales, for all offices, must reach RBI by the 10th of the next month.
Renewal two months early
Where an authorisation has an expiry date, the renewal application must be filed at least two months before it.
Franchisees end within two years
Existing franchisee arrangements must be wound down within two years of 6 May 2026.
What happens if you deal without authorisation
You face a FEMA penalty
Under Section 13(1), up to three times the sum involved, or up to ₹2 lakh if not quantifiable, plus up to ₹5,000 for each day the contravention continues.
Licensed FFMCs are not safe either
Breaking any condition of an RBI authorisation attracts the same penalty.
A lapsed licence cannot be replaced
Here is the catch: if an FFMC loses its authorisation through low NOF or a missed renewal, it cannot simply apply again, because fresh FFMC licences are no longer granted.
Frequently asked questions
Can I get a new FFMC licence in 2026?
No. Under the Foreign Exchange Management (Authorised Persons) Regulations, 2026, in force since 6 May 2026, RBI does not consider fresh applications for FFMC authorisation. Only applications already pending on that date are processed. New entrants can become a Forex Correspondent of an AD Category-I or II, or apply for AD Category-II or III if they meet the net worth bar. We help you pick and set up the right one.
What net owned fund does an existing FFMC need?
An existing FFMC needs net owned funds of at least ₹25 lakh if it has a single branch, and ₹50 lakh if it has multiple branches. These floors apply when it continues and renews its authorisation under the 2026 Regulations. A chartered accountant certifies the figure. If NOF has slipped, fresh equity can restore it before renewal. We check the numbers well ahead of time.
What is a Forex Correspondent?
A Forex Correspondent (FxC) is an agent appointed by an AD Category-I or AD Category-II to carry on money changing business under a principal-agent model. The principal picks FxCs under its board-approved policy on fit-and-proper criteria, net worth and due diligence. An FxC can be agent to more than one authorised dealer. For a new player it is the main way in today, and we handle the tie-up paperwork.
How can a money changer become AD Category-II?
An FFMC or FxC can apply for AD Category-II if it has functioned for at least two years with average annual forex turnover of at least ₹50 crore over the preceding two financial years. The applicant also needs a minimum positive net worth of ₹10 crore. Banks and RBI-registered NBFCs are eligible too, so some promoters first go for NBFC registration. We assess your turnover and capital and prepare the PRAVAAH application.
What happens to existing franchisees of FFMCs?
Existing franchisee arrangements must be discontinued within two years from 6 May 2026, and no new ones can be made. After that, a former franchisee can be engaged as a Forex Correspondent, subject to the conditions of the FxC scheme. Until then, franchisees may only convert foreign currency into rupees. We plan the move so business carries on.
How much cash can an FFMC pay when buying foreign currency?
When buying foreign currency notes or travellers’ cheques from a resident, an FFMC may pay rupees in cash only up to USD 1,000 or its equivalent per transaction. For non-resident Indians and foreign visitors, the limit is USD 3,000 or its equivalent per transaction. We build these limits into your KYC/AML policy.
Can an FFMC accept cash when selling forex?
Yes, but only for amounts below ₹50,000. For a sale of ₹50,000 or more, the customer must pay by crossed cheque, demand draft, banker’s cheque, pay order or electronic funds transfer. The forex sold for a private visit must also stay within the limits in Schedule III to the Foreign Exchange Management (Current Account Transactions) Rules, 2000. We train counter staff on these rules.
What returns does an FFMC file with RBI?
The main return is FLM 8, a monthly consolidated statement of purchases and sales of foreign currency notes for all offices, which must reach RBI by the 10th of the following month. FFMCs also need concurrent audit: monthly for a single-branch FFMC with turnover above USD 100,000 a month, quarterly if below. We prepare the returns and coordinate with your concurrent auditor every month.
Is an FFMC authorisation valid for life?
Authorisations granted under the 2026 Regulations stay valid until revoked or surrendered. If your existing FFMC authorisation carries an expiry date, the renewal application must be filed at least two months before it expires. Keep NOF, returns and KYC in order, and renewal stays routine. We handle it for you.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The biggest cost is capital: ₹25 lakh or ₹50 lakh NOF for an existing FFMC, ₹2 crore net worth for AD Category-III and ₹10 crore for AD Category-II.
Ready to begin?
Tell us if you hold an FFMC licence or are starting fresh, and we will map your route under the 2026 rules.