Module: General Practice
Q56: An existing Full Fledged Money Changer (FFMC) or a Non-Banking Financial Company (NBFC) wishing to upgrade to an Authorized Dealer (AD) Category-II license must generally maintain a minimum Net Owned Funds (NOF) of:
✅ Correct Answer: C
1. The Threshold: To upgrade from an FFMC (pure cash/card exchange) to an AD Category-II (permitted for wider non-trade remittances), the entity must demonstrate significantly higher capital strength.
The standard benchmark is ₹10 Crore.
2. Rationale: AD Category-II entities handle higher volumes and more complex transactions (like medical/education remittances) compared to simple tourist currency exchange, necessitating a stronger balance sheet.
3. Note on Drafts: While draft frameworks (like "Forex Correspondent") have been discussed, the operational instruction for AD-II upgrades remains at the ₹10 Crore NOF level.
The standard benchmark is ₹10 Crore.
2. Rationale: AD Category-II entities handle higher volumes and more complex transactions (like medical/education remittances) compared to simple tourist currency exchange, necessitating a stronger balance sheet.
3. Note on Drafts: While draft frameworks (like "Forex Correspondent") have been discussed, the operational instruction for AD-II upgrades remains at the ₹10 Crore NOF level.