Foreign Inward Remittance Certificate
What is FIRC?
FIRC is a document issued on a pre-printed security stationery depending on the purpose of the remittance at the request of the beneficiary. Authorised Dealer (AD) Banks may be required to issue certificates to beneficiaries of Inward Remittances received through their medium for production as supporting evidence for claiming various facilities / benefits / entitlements under Government Rules. FIRC should be issued on security paper as per Form BCI bearing distinctive serial number.
What is Export Data Processing and Monitoring System (EDPMS)?
EDPMS is a comprehensive IT-based system which facilitates banks to report returns like XOS (export outstanding statements), ENC (Export Bills Negotiated / sent for collection) for acknowledgement of receipt of Export documents, Sch. 3 to 6 (realisation of export proceeds), EBW (write-off of export bills), ETX (extension of realisation of export bills) relating to Export transaction under FEMA to RBI.
In this system, the primary data on exports transactions including offsite software exports from all the sources viz. Customs / SEZ / STPI will flow to RBI secured server and then the same will be shared with the respective banks for follow up with the exporters. Subsequently, the document submission and realisation data will be reported back by the AD banks to RBI through the same secured RBI server so as to update the RBI database on real time basis to facilitate quicker follow up / data generation. The AD banks are required to download and upload the data on daily basis.
Additionally from June 20, 2016, modules for caution listing of exporters, reporting of advance remittance for exports has been added to EDPMS. All AD Category – I banks have to report all the inward remittances including advance as well as old outstanding inward remittances received for export of goods / software to EDPMS. Further, AD Category – I banks need to report the electronic FIRC (e-FIRC) to EDPMS wherever such FIRCs are issued against inward remittances.
What is e-FIRC?
The term is used to denote an FIRC which is issued by a bank in EDPMS. An e-FIRC is issued in EDPMS after the Inward Remittance (IRM) has been uploaded into EDPMS. IRM will be uploaded by the bank where the funds have been credited into a customer’s account. An e-FIRC facilitates adjustment of export documents handled by the bank (A) against the IRM reported by bank (B). For all export related remittances settled after June 20, 2016, banks will not issue a physical FIRC.
If a company has received advance against exports in ICICI Bank, will an FIRC be issued for this?
No. In terms of FEDAI circular number SPL-04/2016 dated April 21, 2016, FIRC should not be issued for advance payments for exports.
Further, in terms of extant RBI regulations, export documents covering the shipment are to be routed through the bank through which the advance payment is received. Considering the same, no FIRC will be issued for advance against exports by ICICI Bank.
In which scenario will a company be issued an FIRC?
ICICI Bank will issue an FIRC for inward remittances covering Foreign Direct Investment / Foreign Institutional Investment (FDI/FII) only at specific request of exporter. After June 20, 2016 no physical FIRC will be issued for exports related remittances.
In which scenario will a company be issued an e-FIRC?
When the export proceeds for export of goods and services are received by a bank other than the one through which documents are submitted, e-FIRC is required for connecting the two. Here, the banks that received the payment would issue electronic FIRC to EDPMS at specific request of exporter.
ICICI Bank will issue electronic FIRC for all exports proceeds of goods and services which do not fall under the ‘advance against exports’ category.
Can you provide a summary to understand which document will be provided for inward remittances against the following scenarios?
|Scenario Document Provided||Advance against exports||Other exports related remittances||Remittances covering FDI/FII||Other remittances|
Which bank will report IRM in EDPMS?
Below is a tabular representation of how IRM will be reported in EDPMS:
|Scenario||Ownership to report IRM in EDPMS*|
|Bank A receives Inward in Foreign currency and transfers the fund to Bank B in Foreign Currency to credit funds in an account in Bank B||Bank B to report the IRM.|
|Bank A receives Inward in Foreign currency and transfers the fund to Customer Account in Bank B in INR||Bank B to report the IRM.|
|Vostro Payment: Bank A receives instruction to transfer INR to Customer with Bank B Account details.||Bank B to report the IRM.|
*This reporting in EDPMS to be done by bank when the funds are credited to beneficiary exporter's account, either through NOSTRO, VOSTRO or RTGS/NEFT.
In the above three scenarios, Bank A should send a message through SFMS/SMSA to Bank B intimating Bank B about details of the credit. These details should include remitter name and address, remitting bank name, reference number of the credit and purpose code. Only on the basis of this message from Bank A, will Bank B be able to report an IRM in EDPMS and issue an e-FIRC if required.
If the company is into software exports, will it be eligible to get FIRC?
Software exporters should settle their exports proceeds with purpose code P0807 (Off-site Software Exports). These exports proceeds will be considered as outstanding until SOFTEX forms certified by STPI/SEZ are submitted to the Bank. A software exporter should submit the SOFTEX to its bank within 21 days of being certified by STPI/SEZ. An e-FIRC will be issued by the bank reporting the IRM in EDPMS, if requested by the exporter.
Are there any notifications issued by any regulatory bodies related to the recent process changes for issuance of FIRC?
Yes. Below is the list of circulars issued by FEDAI and RBI: