FFMC license is a mandatory requirement if you want to start a money changing business. However, the Reserve bank of India would only issue you the license if you agree to follow with its terms and conditions. If you don’t, or if there are other justifiable reasons, you can lose the license pretty easily.
What are those rules? What is the condition that can waste your FFMC license fees and make the RBI revoke your permission of doing money changing business? Unfortunately, there are not many. There are two broad categories of conditions that RBI can use to revoke your license at any time.
In this blog, we are going to take a look at those conditions. Additionally, we will tell you how to ensure that you’re able to hold your FFMC license till the time you need to file FFMC license renewal.
Why does the RBI find it’s ok to revoke the license?
The process of obtaining FFMC license online isn’t an easy one. One has to first become eligible to even file the application. And even then, if you only take all the right steps, you’re granted the FFMC license. EVEN THEN, you know how the government works, don’t you? You might take all the right steps and provide all the right documents, but the RBI, to test you, might create new obstacles to stop you from getting the license. And if some how you do get the money changer license in India, the Reserve Bank still holds over you.
Following are the reasons RBI doesn’t shy away from revoking the FFMC license:
- To many non-serious players have the FFMC license. They are the ones who don’t do much business and thus, bring nothing to the table. If the RBI doesn’t find it fruitful to let them have the license, it cancels the license.
- Potential of corruption is a lot in a full-fledged money changer business. That corruption can seep into other domains of businesses and can destroy the economy of one region. To stop that destruction, RBI doesn’t shy away from cancelling the license.
- Most of the fraud investigations of international scale find FFMC license holders as the primary culprits. Therefore, even though RBI promotes the license, it doesn’t shy away from taking it away from the license holders.
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Let’s now discuss the two reasons RBI might revoke the license:
- It’s in the general interest of the public: If the reserve bank of India thinks that the public would be better without your FFMC business, it can cancel your license. Why would it think that? Well, it all depends on how many complaints have been filed against you. If it has been proven that the way you do business is detrimental to the general financial well-being of the public, your license can be cancelled.
- You violate the terms and conditions under which you were issued the license: If you violate any rules mentioned in the terms and conditions of your FFMC license agreement, your license can be taken away.
How to prevent RBI from taking away your FFMC license?
Despite the vague reasons of why RBI takes away the license, you can retain your FFMC license with the aid of FFMC license consultant. These consultants can help you in the following ways:
- They can provide you regular auditing services
- They can ensure that your way of doing business does not violate any rules
- They can help you understand the finer terms of FFMC license meaning.
Conclusion
RBI doesn’t have to give a lot of reason to cancel your FFMC license. It’s up to you to stay vigilant, follow the rules and don’t make mistakes to ensure that your full-fledged money business isn’t destroyed. If you want assistance in this regard, our FFMC license consultant are ready to render their services.