The Reserve Bank of India (RBI) authorizes entities to deal in foreign exchange for specific purposes under section 10 of the Foreign Exchange Management Act (FEMA), 1999. To deal with forex, Authorized Dealer Category-1 Banks, Authorized Dealer Category-2 FFMCs can appoint their own franchisees. For obtaining a FFMC franchise license, an application shall be made in Form RMC-F to RBI accompanied by a declaration that adequate due diligence of the entity has been carried out prior to the entering into the Franchise Agreement. For RBI filing services or advisory from Ozg Lawyers, please WhatsApp📱8850585672 and/or email to: ask@fema.in
Following are the key points if FFMC intends to choose a franchise -
📌 Any entity with a place of business can be a franchise. It should have a municipal certification or pvt ltd including registration under Shop and Establishment act.
📌 A minimum net ownership of Rs 10 lakh is required for an entity.
📌 The franchisee can only do business that deals with forex in a particular shop.
📌 A franchise agreement must be agreed between the parties.
📌 Franchisee should use the name, exchange rate of their franchisor, and update to them prominently in their offices about the purchase of foreign currency.
📌 In case of closure, the franchise will surrender the foreign currency it had purchased to its franchisor within a period of only 7 days, the counting will begin from the date of purchase.
📌 It is the franchise's responsibility to track and manage the current appropriate transaction records.
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