Operational Instructions by the RBI for FFMC License holder

Operational Instructions by the RBI for FFMC License holder A Full Fledged Money Changer is a money changer authorized to purchase foreign exchange from non-residents visiting India and residents. These entities can also sell foreign exchange for private and business travel. The Reserve Bank of India has well-defined the operational structure of an FFMC in the realm of Indian law. Every registered FFMC License RBI holder must adhere to these operating instructions to function smoothly in the Indian and international markets. We have discussed some of these regulations in this article, so read carefully.

To-n-Fro of Foreign Exchange in India Currency Declaration Form Foreign Exchange can be brought into India freely without limit. But they must provide the Currency Declaration Form (CDF) declaration on arrival to the Customs Authorities. Suppose foreign exchange does not exceed USD 10,000 or its equivalent. Also, the value of foreign

currency notes does not exceed USD 5,000 or its equivalent. In that case, the declaration on CDF will not be insisted upon.

Special Permission from the RBI The RBI prohibits taking out foreign exchange in a form other than foreign exchange from a money changer. But the Forex trading license holder must cover it with the general or special permission of the Reserve Bank. Non-residents, however, have general permission to take out an amount not exceeding the originally brought in, subject to compliance with the above provisions.

FFMC License: Foreign Currency Purchasing Rules Authorized Person Authorized Persons of an FFMC can freely purchase foreign currency notes, coins, and traveller's cheques from residents as well as non-residents. The FFMC must ask the tenderer to produce the same when it brings the foreign currency in by declaring on form CDF. The production of declaration in CDF should invariably be insisted upon.

Limit on Cash Payment (Indian Residents) Requests for payment in cash in Indian Rupees to resident customers towards purchasing foreign currency notes or Travellers' Cheques from them may accede to the extent of only USD 1,000 or its equivalent per transaction.

Limit on Cash Payment (Foreigners and NRI) Requests for payment in cash by foreign visitors or Non-Resident Indians may accede to only USD 3,000 or its equivalent per transaction.

Currency Sell-Purchase from Foreign Visitors Authorized Persons can sell Indian Rupees to foreign tourists/visitors against International Credit Cards or International Debit Cards and take prompt steps to obtain reimbursement through normal banking channels.

Indian Resident Payment Options While making payments in Indian Rupees to resident customers towards the purchase of foreign currency notes and/or traveller's cheques, the FFMC can make the payment in the following: ● Cash ● Account payee cheque

● Demand draft ● INR debit cards ● Electronic funds transfer through banking channel

Encashment Certificate by an FFMC License holder

Certificate Issue: Allowed vs. Not Allowed Authorized Persons of the FFMC can issue a certificate of encashment. This issuance can be of purchases of foreign currency notes, coins, and traveller's cheques from residents as well as non-residents. The FFMC must not issue these certificates bearing authorized signatures on the letterhead of the money changer. Also, they must maintain proper records for this purpose.

Exception: Suppose the FFMC does not issue an encashment certificate. In that case, the FFMC must draw the customers' attention to the fact that it cannot allow the unspent local currency to convert into foreign currency only against the production of a valid encashment certificate.

Purchases from other FFMC License holders A Full fledge money changer can purchase from other FFMCs foreign currency notes, coins, and traveler's cheques tendered in the course of business. The FFMC must pay the rupee equivalent of the amount of foreign exchange purchased only by the following: ● ● ● ● ●

Crossing account payee cheque Demand draft Banker's cheque Pay order Electronic funds transfer through banking channel