Guidelines for issuance of FFMC Licence:-
The guidelines for issue of new FFMC licence and renewal of FFMC licence,are given below:
(a) The applicant has to be a company registered under the Companies Act,2013 or under any previous Companies Act.
(b) The minimum Net Owned Funds (NOF) required for consideration as FFMC are as follows:
|Category||Minimum Net Owned Funds|
|Single branch FFMC||Rs.25 lakh|
|Multiple branch FFMC||Rs.50 lakh|
|Note :- The Net Owned Funds of applicants, other than banks, should be calculated as per the following.
(a) Owned Funds :- (Paid-up Equity Capital + Free reserves + Credit balance in Profit & Loss A/c) minus (Accumulated balance of loss, Deferred revenue expenditure and Other intangible assets)
(b) 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.
(c) ‘Fit and proper’ criteria for the applicant FFMCs
The Boards of FFMCs / non-bank ADs Category – II should undertake a process of due diligence to determine the suitability of the person (by Constituting Nomination Committee) for appointment / continuing to hold appointment as a director on the Board, based upon qualification, expertise, track record, integrity and other ‘fit and proper’ criteria.
The applicant/s should normally not exceed 70 years of age, should not be a Member of Parliament /Member of Legislative Assembly / Member of Legislative Council. For assessing integrity and suitability, factors like criminal record, if any, financial position, civil action initiated to pursue personal debts, refusal of admission to or expulsion from professional bodies, sanctions imposed by regulators or similar bodies, previous questionable business practices, etc. should be considered.
Note: If, any case by Directorate of Enforcement (DoE) / Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities, is initiated / pending against any company / its directors, the company will not be considered as ‘fit and proper’ and its application will not be considered for licensing as FFMC.
(a) Application in the prescribed form should be submitted to the respective Regional Office of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the applicant falls, along with the following documents: