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FAQ's on - Scheme for Authorized Dealers Category I (AD) banks Authorized Dealers Category-II and Full Fledged Money Changers Appointing Agents/Franchisees for Undertaking Restricted Money Changing (Updated as on March 24 2015)

Dated:- 31-3-2015 - 1. Who are Authorised Money Changers? Authorised Money Changers (AMCs) are entities, authorised by the Reserve Bank under Section 10 of the Foreign Exchange Management Act, 1999. An AMC is a Full Fledged Money Changer (FFMC) authorised by the Reserve Bank to deal in foreign exchange for specified purposes. 2. The objective behind allowing Authorised Money Changers to do business? To widen the access of foreign exchange facilities to residents and tourists while ensuring effic .....

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d undertaking money changing business without a valid licence is liable to be penalised. 5. Who can apply for FFMC licence? The applicant has to be a company registered under the Companies Act, 1956. The minimum Net Owned Funds (NOF) required for consideration as FFMC is ₹ 25 lakh for Single branch FFMC and ₹ 50 lakh for Multiple branch FFMC. 6. Where one can submit the application (fresh/renewal) for FFMC licence? Application in the prescribed form, along with the required documents .....

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ts) Net Owned Funds: Owned funds minus the amount of investments in shares of its subsidiaries, companies in the same group, all (other) non-banking financial companies as also the book value of debentures, bonds, outstanding loans and advances made to and deposits with its subsidiaries and companies in the same group in excess of 10 per cent of the Owned funds. 8. Is NOF to be maintained on the ongoing basis? AMCs are expected to maintain the minimum NOF on an ongoing basis. 9. Under what circu .....

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ves the right to revoke the authorization of any of the offices for infringement of any statutory or regulatory provision. The Reserve Bank may at any time vary or revoke any of the existing conditions of a money changer s licence or impose new conditions. 10. During what time frame a new FFMC should commence operations? The FFMC should commence operations within a period of six months from the date of issuance of licence. A copy of the registration under Shops & Establishment Act or any oth .....

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ategory - II and FFMCs may appoint franchisees (also known as Agents) to undertake purchase of foreign currency. 12. What is the objective of the Scheme for appointing Franchisees by AD Category Banks, ADs Category-II and FFMCs for undertaking Restricted Money Changing Activities? The objective of the Scheme is to provide easier foreign exchange conversion facilities for travellers and tourists, including Non Resident Indians (NRIs), by enlarging the network of money changing facilities in the c .....

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ss, i.e. conversion of foreign currency notes, coins or travelers' cheques into Rupees by the franchisees. A franchisee can be any entity which has a place of business and a minimum Net Owned Funds of ₹ 10 lakhs. Franchisees can undertake only restricted money changing business. AD Category - I banks, ADs Category - II and FFMCs as the Franchisers are free to decide on the tenor of the arrangement as also the commission or fee through mutual agreement with the franchisee. The Franchise .....

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d be surrendered only to its franchiser within 7 working days from the date of purchase. (c) The franchisee should maintain proper records of transactions. (d) The on-site inspection of the franchisee by the franchiser should be conducted at least once a year. 14. What is the procedure for submission of application by AD Category - I bank/ AD Category - II/ FFMC to the Reserve Bank for appointment of franchisees? An AD Category - I bank/ AD Category - II/ FFMC should apply to the respective Regi .....

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y changing. Approval would be granted by the Reserve Bank for the first franchisee arrangement. Thereafter, as and when new franchisee agreements are entered into, these would have to be reported to the Reserve Bank in Form RMC-F (Annex-IV of the A.P. (DIR Series) Circular No. 57 [A.P. (FL/RL Series) Circular No. 04] dated March 9, 2009)on a post-facto basis, along with similar declaration as indicated above. 15. What are the checks to be ensured by AD Category-I banks/ADs Category-II/FFMCs whil .....

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ee, where restricted money changing activities will be conducted. conduct certificate of the franchisee from the local police authorities (certified copy of Memorandum and Articles of Association and Certificate of Incorporation in lieu of conduct certificate in respect of franchisees which are incorporated entities. Accordingly, Item No. 6 of the Form RMC-F (Annex-IV of the A.P. (DIR Series) Circular No. 57 [A.P. (FL/RL Series) Circular No. 04] dated March 9, 2009) may suitably be modified for .....

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ency, if any. PAN Card of the franchisee and its directors / partners. photographs of the directors / partners and the key persons of franchisee. The above checks should be done on a regular basis, at least once in a year. The AD Category - I banks / ADs Category - II / FFMCs should obtain from the franchisees proper documentary evidence confirming the location of the franchisees in addition to personal visits to the site. The AD Category - I Banks/ ADs Category - II / FFMCs should also obtain a .....

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the group/ chain of hotels falls within a distance of 100 kms. of the controlling branch of the AD Category - I banks / ADs Category - II / FFMCs (franchiser) concerned. Further, in case of areas declared as hilly areas (as defined by the respective State Governments/Union Territories) and the North-Eastern States, the distance restriction given in point (i) above is not applicable. 17. What are the guidelines on provision for training of franchisees? Franchisers are expected to impart training .....

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hould be conducted by AD Category - I Banks / ADs Category - II / FFMCs. Such audits should involve a dedicated team and 'mystery customer' (Individuals acting as potential customers to experience and measure the extent up to which people and processes perform as they should) concept should be used to test the compliance level of the franchisees. A system of annual inspection of the books of the franchisees should also be put in place. The purpose of such inspection is to ensure that the .....

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