There aren’t many souls brave enough to dream to become a Full Fledged Money Changer. Providing the facility of currency exchange, there are many red tapes associated with starting such an enterprise.
However, as we know that people tend to overcomplicate and that over-complication often reaches mythical proportions. As a result, there are many myths about the FFMC license – the license to start this currency exchange business – that exist only to create issues for those looking to start this business.
Therefore, in this article, we are going to take a closer look at those myths and tell you the reality behind them.
Let us begin.
Myth 1: You can start an FFMC business solo
One of the greatest misconceptions about the FFMC business is believing that one can start it solo. It is a myth that has gained prevalence because Full Fledged money changers exist in all sizes – ranging from multi-tier enterprises to small shops. People believe that because one can provide this service even at a small scale – the requirement of business infrastructure is unnecessary.
Truth: As per RBI regulations, only companies and LLPs have permission to obtain the FFMC license. Because entities have the infrastructure to handle multiple facets of a money-changing business, the Reserve Bank of India considers them deserving of the business certificate.
Myth 2: One can only obtain an FFMC license online
Modern money exchange business aspirants believe that they can only obtain the license through online means. It stems from the fact that, much like most business certifications, the FFMC license too, requires an online assessment method. While it is true to some degree, the premise that one can only get a currency exchange license online is false.
Truth: Money changer business has existed long before the entry of the Internet in India. Therefore, it is safe to say that you can obtain the business certificate by following the old ways of visiting the office and submitting the application form.
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Myth 3: The license is permanent
Because the procedure to obtain this business certificate is so difficult, people believe that it is valid forever. To some, it makes perfect sense. They believe that the payoff of going through a difficult procedure is a perpetually valid license. However, it is a myth that has forced many changes to close up shop after one year.
Truth: The license is only valid for one year. Afterwards, the applicant must perform an FFMC license renewal to continue to provide currency exchange services.
Myth 4: You can get an FFMC license on sale
Desperation and the desire to start the business early has led many to believe that they can find the business license on sale. And thus, when they approach an FFMC license consultant. Their words aren’t about the process to obtain the certificate, but instead are, “kitne ka doge bhai” –(how much for the license brother?).
Truth: Selling the forex trading license is not only illegal, but it is also impossible. If someone comes to you and says that they can “sell” you, the license for a price, start looking the other way. They attempt to involve you in a fraudulent act, and if you fall for it, the consequences are severe.
Myth 5: You do not need a consultant to get the business license
The self-reliance motto of India’s youth has created several misconceptions. And one of them is believing that getting any business license or registration is possible without getting a consultant involved. It is an admirable sentiment – believing that it is possible to deal with legal roadblocks on your own. However, it is also impossible.
Truth: The procedure of obtaining the license from the RBI involves more steps than you see on any blog. It is a matter that involves more than just application filing. There are post-application requirements that you must take care of, and other details of this registration only come to the surface once RBI has started processing your application. Dealing with those requirements will take a lot of time that you do not have. Therefore, it is important to keep the experts in mind.
Becoming a full-fledged money changer isn’t a dream for many. However, if it is yours, then you must learn to separate facts from fiction. In this article, you have read the myths about the FFMC license and the truth behind each of them. Keep them in mind the next time you start filling out your application form.
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