Trade Policy
Forex Trading Licence in India: RBI AD Category & FFMC Rules (2026)
India does not issue a generic “forex trading licence” for speculation — RBI licences foreign exchange business by category under FEMA. Here is how AD Category I/II/III and FFMC work after the Foreign Exchange Management (Authorised Persons) Regulations 2026 — who can apply, who cannot, net worth and turnover gates, and how the new Forex Correspondent model replaces fresh FFMCs.
There is no single “forex trading licence” — RBI licences by category
Searches for “how to get forex trading licence in India” usually expect one form. RBI does not grant one — it licences who may deal in foreign exchange and how, under the Foreign Exchange Management Act 1999. The Foreign Exchange Management (Authorised Persons) Regulations 2026 (notified 30 April 2026, ETLegalWorld 6 May 2026) rationalise the whole stack into three Authorised Dealer categories plus legacy FFMCs and the new Forex Correspondent (FxC) model, all via RBI’s PRAVAAH portal.
FFMC fresh licences stopped
No fresh FFMC will be considered after 30 April 2026 — only pending applications (with a 30-day top-up window) and renewals of existing FFMCs. New retail exchange capacity now runs through the FxC principal-agent model under an AD Category-I/II, not a standalone FFMC. Source: BDO alert 22 May 2026 on FEMA Authorised Persons Regulations 2026.
AD Category I, II, III and FFMC — who is who after 30 April 2026
| Category | Who can apply | What they may do | Net worth at commencement ⚠️ |
|---|---|---|---|
| AD Category-I | Bank licensed by RBI | Any current + capital account FX permissible under FEMA | Bank licence (co-terminus with banking licence) |
| AD Category-II | Bank / NBFC registered with RBI; or FFMC/FxC with 2 years and avg annual turnover ₹50 cr in last 2 FYs | Non-trade remittances (ex-gift/donation) + trade up to ₹25 lakh/transaction; also FFMC/FxC business | ₹10 cr |
| AD Category-III | Entity needing FX incidental to business; or offering innovative FX-linked products/services | As authorised by RBI — tailored to the product | ₹2 cr |
| FFMC (legacy only) | Existing FFMCs (renewal) — no fresh grants | Purchase/sale of notes/coins + travellers cheques for travel; MTSS agent | ₹25 lakh single-branch / ₹50 lakh multi-branch |
| Forex Correspondent (FxC) | Agent of AD-I/II under principal-agent model (replaces old franchisee) | Notes/coins + cheques for travel + MTSS sub-agent — under principal’s oversight | Principal’s authorisation, not standalone |
- All applications via PRAVAAH to the regional office of the applicant’s registered office — banks/NBFCs co-terminus with their RBI licence/registration.
- If regulated by another financial-sector regulator, attach that regulator’s NOC within 45 days of the NOC date.
- Fit-and-proper applies to applicant, promoters, directors, KMPs: qualification/experience (≥50% of directors/KMPs in financial services), integrity, no convictions/restraints/disqualifications.
- If any promoter/director/KMP/parent is under ED investigation, file DoE NOC ≤30 days old — if DoE does not reply in 60 days, RBI processes on your declaration.
How to apply — documents, gates and timelines
| Gate | What RBI checks | Reference |
|---|---|---|
| Entity | Company under Companies Act 2013; MOA must cover forex/money changing | Regulation 4 eligibility |
| Net worth | Certified by statutory auditor on latest audited balance sheet — AD-II ₹10 cr / AD-III ₹2 cr / FFMC renewal ₹25/50 lakh | BDO summary of Regulations; AP needs positive net worth at commencement |
| Turnover | AD-II ₹50 cr / FFMC ₹10 cr annual forex turnover within 2 years of commencement or of Regulations, then maintained | Regulation 8 conditions |
| Prior approvals | Prior RBI approval for >50% change in management/control/ownership (banks exempt); 6-month commencement window | Regulation 8 |
| Reporting | APConnect/PRAVAAH filings — monthly/quarterly FCY account statements, ₹10,000+ transactions, annual write-off statement | Legacy FEMA conditions carried forward |
Miss the 30-day reply window for additional info on a pending FFMC (from 30 April 2026) and the application is deemed rejected — one-year cooling before you may reapply if rejected/revoked/surrendered. Rejection/revocation is appealable to the Executive Director in charge of Foreign Exchange Department, Central Office, Mumbai within 45 calendar days — reasoned order in 60 days.
What you may do once authorised — scope, not a trading account
An Authorised Person licence is not a retail “forex trading account” for speculation. RBI authorises the business of dealing in FX with the public — issuance of notes/cheques, processing remittances, handling trade payments — under the category’s permitted scope. Retail currency trading on unregulated platforms remains outside this framework and is separately covered by RBI warnings.
- AD-I covers the full trade lifecycle — import LC issuance, export realisation, hedging, cross-border services.
- AD-II caps trade at ₹25 lakh/transaction — above that, route through AD-I or structure as multiple permitted transactions.
- FFMC/FxC is travel-cash + MTSS only — not trade finance — so a trade finance platform routes trade FX via AD-I, not via an FFMC.
Trade licence vs IEC vs forex licence — don’t confuse the three
| Licence | Issued by | What it lets you do | Who needs it |
|---|---|---|---|
| Trade licence | Municipal corporation (Gumasta etc.) | Operate premises locally | Every shop/factory/warehouse — municipal fee |
| IEC (Importer Exporter Code) | DGFT | Import/export goods under FTP — mandatory for cross-border trade | Every commercial importer/exporter — ₹500 fee |
| Authorised Person (AD/FFMC/FxC) | RBI under FEMA | Deal in foreign exchange with the public | Banks/NBFCs/money changers only — not a general trader (see categories above) |
If you simply need to export goods, you need an IEC, not an AD licence — your AD-I bank handles the FX. Only if you want to run a money-changing business or offer FX services to the public as principal do you apply to RBI under the 2026 stack.
Ongoing duties that get renewals revoked
- Maintain net worth — if it dips below the floor, restore within 6 months (or extended period RBI grants) or face revocation.
- Maintain turnover — AD-II ₹50 cr / FFMC ₹10 cr within 2 years of commencement/Regulations, then each year — even if you keep net worth.
- Commence within 6 months of authorisation under intimation to RBI regional office; seek prior approval for >50% ownership/management change (banks exempt).
- File via APConnect/PRAVAAH — monthly FCY receipt/purchase ≥ USD 10,000, quarterly FCY account, annual write-off within 1 month of FY-end — and report any DoE investigation promptly.
- Renew renewal at least 2 months before expiry — late = re-application as fresh (and for FFMC, fresh is closed).
Moving goods, not opening a forex counter?
If you need trade finance for your buyers — factoring, LC discounting, packing credit checked by buyer country — start with the financing checker instead of a forex licence.
Open the financing checkerFrequently asked questions
How to get a forex trading licence in India?
You apply to RBI as an Authorised Person under FEMA — AD Category I (banks), AD Category II (banks/NBFCs or 2-year FFMC/FxC with avg ₹50 cr turnover in last 2 FYs), or AD Category III (entities needing FX incidental to business or offering innovative FX products). Applications run on RBI’s PRAVAAH portal to the regional office of your registered office. FFMC fresh licences are discontinued under the 2026 Regulations — only renewals and pending applications are processed.
What is an FFMC licence and can I still get one?
An FFMC (Full-Fledged Money Changer) could buy/sell foreign currency notes, coins and travellers cheques for travel and act as MTSS agent. Under the Foreign Exchange Management (Authorised Persons) Regulations 2026 notified 30 April 2026, fresh FFMC authorisation will not be considered — except applications pending on that date (30-day top-up window, then deemed rejected). Existing FFMCs can renew (₹25 lakh single-branch / ₹50 lakh multi-branch net worth) or transition to the Forex Correspondent (FxC) principal-agent model under an AD Category-I/II.
What are AD Category I, II and III?
AD Category-I: banks licensed by RBI — any current + capital account FX. AD Category-II: banks/NBFCs registered with RBI or FFMC/FxC with 2 years and avg ₹50 cr forex turnover — non-trade remittances and trade up to ₹25 lakh/transaction. AD Category-III: entities that need FX incidental to business or offer innovative FX-linked products — activities as per RBI authorisation. Net worth at commencement: AD-II ₹10 cr, AD-III ₹2 cr; FFMC renewals ₹25/50 lakh.
What documents and net worth are required for a forex licence?
Applicant must be a company under Companies Act 2013 with MOA covering forex, minimum net worth (AD-II ₹10 cr, AD-III ₹2 cr, renewed FFMC ₹25/50 lakh) certified by statutory auditor, fit-and-proper promoters/directors/KMPs (50% with financial-services experience), and — if under ED investigation — a DoE NOC not older than 30 days (RBI proceeds without NOC if DoE silent for 60 days). Apply via PRAVAAH with NOC from your financial-sector regulator if applicable, within 45 days of that NOC.
How is a forex trading licence different from a trade licence or IEC?
A trade licence is a municipal permission to operate premises; an IEC (Importer Exporter Code) from DGFT lets you import/export goods. Neither lets you deal in foreign exchange. Only an RBI Authorised Person (AD-I/II/III or FFMC/FxC) can buy/sell FX under FEMA — banks, NBFCs and licensed money changers, not a general trader.
How long does a forex licence take and what must you maintain?
You must commence operations within 6 months of authorisation and, within 2 years of commencement (or of the 2026 Regulations coming into force, whichever is later), achieve and thereafter maintain minimum annual forex turnover — AD-II ₹50 cr, FFMC ₹10 cr — plus restore net worth within 6 months if it dips, seek prior RBI approval for >50% ownership change, and file monthly/quarterly statements via PRAVAAH/APConnect. Renew at least 2 months before expiry; rejection/revocation is appealable to the Executive Director, FED within 45 days.