A money changer can finish its statutory audit on time and still miss an RBI deadline. A Full Fledged Money Changer (FFMC) has to send its annual forex turnover certificate in April and its audited balance sheet with a net worth certificate in October. Between those dates, it must keep up with monthly RBI returns, concurrent audits and, where applicable, reports to the Financial Intelligence Unit–India (FIU-IND).

Consider an FFMC with two counters in Delhi. One counter sells foreign currency to travellers and the other purchases it from walk-in customers. If the second counter sends unused currency to the first, the company records an internal stock transfer. Treating it as a sale would distort the branch accounts and could affect the figures used for reporting. A good compliance calendar starts with how each transaction is recorded at the counter.

In this article, CA Manish Mishra talks about Annual Compliance Checklist for FFMC Licence Holders.

FFMC Compliance Calendar at a Glance

Submit the Annual Forex Turnover Certificate by 30 April

Ask the statutory auditor to certify the annual forex turnover for the financial year just ended and send the certificate to the RBI Regional Office concerned. For FY 2026–27, the deadline is 30 April 2027. Arrange the auditor’s review before the March close so the accounts team has time in April to resolve differences and obtain the signed certificate.

Annual forex turnover is the aggregate value of foreign exchange purchased from and sold to the public. It includes eligible transactions conducted directly and through agents, franchisees or forex correspondents, as applicable. Inward remittances, internal branch transfers and dealings with other authorised persons are excluded from this calculation. Suppose an FFMC purchases ₹4.8 crore in foreign exchange from the public and sells ₹5.4 crore to the public during the financial year. Its annual forex turnover for this purpose is ₹10.2 crore.

The 2026 regulations prescribe a ₹10 crore minimum annual forex turnover for FFMCs. An FFMC must achieve this minimum within two years from the date the regulations came into force or the date it commenced its forex business, whichever is later. It must maintain the minimum thereafter. Track the annual certificate deadline separately from the date on which the turnover minimum starts applying to your company.

Submit the Audited Balance Sheet and Net Worth Certificate by 31 October

Send the annual audited balance sheet and a statutory auditor’s certificate confirming net worth as at the balance sheet date to the RBI Regional Office concerned. For a company with a 31 March 2027 balance sheet, the annual submission deadline is 31 October 2027. Keep the signed documents, net worth calculation and evidence of submission together so they can be retrieved during an inspection. The 2026 renewal rules specify the following minimum net worth levels.

The regulations use the Companies Act definition of net worth. The term Net Owned Funds (NOF) still appears in the annex covering specified fresh applications that were already under process when the 2026 rules came into force. Confirm the calculation basis for the filing before asking the auditor to issue the certificate. Monitor net worth throughout the year, especially after a large loss or before opening a second branch. An FFMC must immediately notify RBI of a deviation from the applicable requirement. If net worth falls below the prescribed minimum, the regulations provide six months to restore it, or additional time if RBI grants it. Failure to restore it can lead to revocation.

Reconcile Branch Records and File Monthly FLM-8

Submit one consolidated Form FLM-8 covering all offices through RBI APConnect by the 10th of the following month. The revised form captures purchases and sales of foreign currency notes, including details of notes written off. Entities that maintain Nostro accounts and report the relevant transactions through FETERS are exempt from FLM-8 when both conditions are met. The June 2026 RBI circular discontinued the prescribed FLM-1 to FLM-7 register formats. FFMCs must continue to maintain complete and accurate transaction records and make them available for inspection. Keep separate records for each establishment and consolidate them for reporting.

The circular also removed the requirement to obtain prior RBI approval for write-offs of foreign currency notes exceeding USD 2,000. Keep the internal approval and supporting evidence for the write-off and report it in the revised return. Before filing, compare opening stock, purchases, sales, transfers, write-offs and closing stock for each currency at each branch. Match physical currency to the books, reconcile bank receipts for non-cash payments and save the filing acknowledgement with the working papers. Record currency sent from one branch to another as a stock transfer.

Review Quarterly Sales and Franchise Arrangements

Each calendar quarter, compare the value of foreign currency notes sold to the public for permitted purposes with the value of notes purchased from other FFMCs and authorised dealers. RBI requires qualifying public sales to equal at least 75% of those purchases. For example, if an FFMC buys ₹80 lakh worth of foreign currency notes from other FFMCs or authorised dealers during a quarter, it needs at least ₹60 lakh in qualifying sales to the public. If the FFMC has franchise arrangements, submit the list to RBI within 15 days after the calendar quarter closes.

For quarters ending in March, June, September and December, the corresponding dates are 15 April, 15 July, 15 October and 15 January. Review each franchise’s permitted activities, authorisation status, transaction records and KYC controls. The 2026 regulations bar new franchise arrangements under the earlier scheme. Arrangements valid when the regulations came into force must be discontinued within two years from that date. An eligible AD Category-I or AD Category-II may then appoint a former franchisee as a Forex Correspondent, subject to the conditions of the new scheme.

Schedule Concurrent Audits and Close Findings

Concurrent audit reviews money-changing transactions during the year. Give the auditor access to branch records, bank statements, filed returns and supporting documents. The applicable schedule depends on the number of branches and the value of transactions.

The auditor should check customer due diligence, timely filing, recording of forex transactions, compliance with cash acceptance limits and whether non-cash payments appear in bank statements. The audit should also look for transactions split into smaller cash payments. The statutory auditor must certify that concurrent audit and internal controls are working satisfactorily.

Give each audit finding an owner and a closure date. For instance, if a branch cannot match card receipts to individual forex sales, the accounts team should reconcile the outstanding entries and verify that the next month’s receipts can be traced to specific transactions.

Keep KYC and FIU-IND Reporting Current

RBI’s Money Changing Master Direction applies the RBI (Non-Banking Financial Companies – Know Your Customer) Directions, 2025 to authorised persons outside RBI’s Department of Regulation. Keep the applicable KYC procedures current and train counter staff to verify identity, establish the purpose of the transaction, recognise connected transactions and escalate unusual activity to the Principal Officer. Verify beneficial ownership where applicable and check that agents and franchisees follow the relevant directions.

Confirm that the details of the Designated Director and Principal Officer registered with FIU-IND are current. Use FINnet to file applicable reports. Reportable cash activity under the PML Rules includes a cash transaction above ₹10 lakh or its foreign-currency equivalent, and specified series of integrally connected cash transactions whose monthly total exceeds that threshold. Suspicious transactions can be reportable regardless of value, including attempted transactions. Keep the fact of filing confidential.

The RBI cash acceptance rule for travel forex sales operates separately. If a traveller’s rupee payment for foreign exchange is ₹50,000 or more, use one of the prescribed non-cash payment methods. This also applies when the traveller makes multiple drawals for the same journey that together reach the threshold. Staff should flag an attempt to split one purchase into smaller cash payments.

Retain transaction records for at least five years from the transaction date. Retain client and beneficial-owner identification records, account files and business correspondence for at least five years after the relationship ends or the account closes, whichever is later, as applicable. Make sure individual transactions can still be reconstructed if a branch changes software or closes.

Track Licence Validity and Report Business Changes

Start with the authorisation letter. An FFMC holding an existing time-limited licence may continue under the applicable conditions until expiry. Apply for renewal at least two months before the expiry date. When the application is filed within that period, the existing authorisation continues until RBI grants renewal or rejects the application. An authorisation granted under the 2026 regulations remains valid until revoked or surrendered, subject to its terms. Review these changes as soon as they arise.

Keep an Inspection File Ready Throughout the Year

RBI can inspect an authorised person’s books, accounts and other documents under FEMA. Organise the inspection file so someone can trace a transaction from the counter voucher to the branch records and, where applicable, the regulatory return. Store STR material separately with access limited to authorised staff.

At each counter, prominently display a copy of the money-changing licence and update the displayed exchange rate chart by 10:30 a.m. Assign these checks to the person who opens the branch. Keep the FFMC calendar alongside the company’s separate ROC, income-tax and applicable GST calendar.

Conclusion

Annual compliance for an FFMC licence holder starts with accurate records at every forex counter. When branches reconcile their currency stock, bank receipts and transaction records regularly, the finance team can prepare the monthly FLM-8 return and give the statutory auditor reliable figures for the annual turnover certificate. The two annual RBI deadlines are 30 April for the forex turnover certificate and 31 October for the audited balance sheet and net worth certificate.

A workable compliance calendar should also cover concurrent audits, KYC checks, applicable FIU-IND reporting and changes that must be reported to RBI. Assign each task to a team member and keep filing acknowledgements, reconciliations and audit closure records together. If the company still holds a time-limited licence, set a reminder to apply for renewal at least two months before expiry. These steps make it easier to spot gaps early and respond to an RBI inspection with complete records.

Frequently Asked Questions (FAQ’s)

Q1. What are the annual RBI filing deadlines for FFMC licence holders?

Ans. Submit the statutory auditor’s annual forex turnover certificate by 30 April. Submit the annual audited balance sheet and the statutory auditor’s net worth certificate by 31 October. Both go to the RBI Regional Office concerned.

Q2. What counts towards an FFMC’s annual forex turnover?

Ans. Add the value of foreign exchange purchased from and sold to the public, including eligible transactions through agents, franchisees or forex correspondents. Exclude inward remittances, internal stock transfers and transactions with other authorised persons.

Q3. When must an FFMC meet the ₹10 crore minimum annual forex turnover requirement?

Ans. The FFMC must achieve the minimum within two years from the date the 2026 regulations came into force or the date it commenced its forex business, whichever is later. It must maintain the minimum thereafter.

Q4. What is the minimum net worth for FFMC licence renewal?

Ans. Under the 2026 regulations, the minimum net worth for renewal is ₹25 lakh for a single-branch FFMC and ₹50 lakh for a multi-branch FFMC.

Q5. What is the due date for filing Form FLM-8?

Ans. File the consolidated monthly Form FLM-8 through RBI APConnect by the 10th of the following month. The exception applies to entities that maintain Nostro accounts and report the relevant transactions through FETERS.

Q6. Are the FLM-1 to FLM-7 register formats still mandatory?

Ans. RBI discontinued the prescribed FLM-1 to FLM-7 formats in June 2026. FFMCs must still maintain complete and accurate records of their foreign exchange transactions and make them available for inspection.

Q7. How often must an FFMC conduct a concurrent audit?

Ans. A single-branch FFMC with monthly turnover above USD 100,000 or equivalent should conduct a monthly audit. At or below that threshold, it may conduct a quarterly audit. A multi-branch FFMC may cover 80% of transaction value monthly and the remaining 20% quarterly.

Q8. When must an FFMC file a Suspicious Transaction Report?

Ans. The Principal Officer must file the report promptly once satisfied that a transaction is suspicious. FIU-IND specifies an outer limit of seven working days. Suspicious transactions may be reportable regardless of their value, including attempted transactions.

Q9. Does an FFMC licence need to be renewed every year?

Ans. For a time-limited legacy licence, apply for renewal at least two months before the expiry date shown on the authorisation. An authorisation granted under the 2026 regulations remains valid until revoked or surrendered, subject to its conditions.

Q10. When must an FFMC submit its franchise arrangements list to RBI?

Ans. An FFMC with franchise arrangements must submit the list within 15 days after the end of each calendar quarter. The corresponding deadlines are 15 April, 15 July, 15 October and 15 January.