The companies that after obtaining a licence from the Reserve Bank of India ( RBI) intents to carry out functions of  forex currency or money changer activity is termed as ‘Full Fledged Money Changer’.

Only entities other than Banks can be termed as Full Fledged Money Changer and are  categorized under the Authorised Dealer Category II whereas the Banks are categorized as the Authorised Dealer Category I.

Every full fledged money changer is required to follow circular on Memorandum of Instruction on Money Changing Activities published by  RBI and also provisions of Foreign Exchange Management Act, 1999 is to be followed by every FFMC licence holder.

Eligibility criteria by a company to be FFMCs:

The company should be registered under the Companies Act, 2013.

The Minimum Net Owned Funds ( NOF) are as follows:

  • Single Branch FFMC- 25 lakhs
  • Multiple Branch FFMC- 50 lakhs

Associated Terms:

Owned Funds:

It is calculated as accumulated balance of loss, deferred revenue expenditure and other intangible assets subtracted from paid up capital, free reserves, credit balance in P&L account.

Net Owned Funds:

If we subtract all the investments, Loans and advances given or deposits made with: subsidiaries or group companies in excess of 10% of the owned companies from the owned funds, we get net owned funds.