Decoding FIRC: A Guide for Indian Exporters of Goods & Services
If you are an Indian exporter of goods, software, or services, and if you are someone who receives payments from international clients, then the Foreign Inward Remittance Certificate (FIRC) is a vital term you’ll come across. While Payoneer’ s multi-currency financial stack enables a hassle-free experience to manage cross-border trade and payments, it is crucial to stay informed & compliant about the regulatory aspects of your exports business. Foreign Inward Remittance Certificate (FIRC) is one such critical component.
FIRC has experienced regulatory and operational changes over the years. In this article, we’ll explain FIRC and introduce you to the concepts of FIRA, FIRS, NOC, e-FIRC, EDPMS, and more, to help you safeguard your export business.
FIRC (Foreign Inward Remittance Certificate) is a vital physical document issued by an Authorized Dealer (AD) bank that acts as a proof of payments received in foreign currency (inward remittance) by you as an Indian exporter (be it a business or freelancer or sole proprietor).
As per the guidelines issued by the Reserve Bank of India (RBI) and the Foreign Exchange Dealers Association in India (FEDAI), only banks classified as Authorised Dealer Category 1 (AD1) in India are authorized to issue an FIRC.
FIRC assists regulatory bodies such as the DGFT (Directorate General of Foreign Trade) and the Customs Department in monitoring incoming funds from foreign sources.
Until 2016, banks provided a physical FIRC on a pre-printed security paper for every foreign inward remittance. However, physical FIRCs were discontinued in 2016 and FIRCs are now exclusively issued for Foreign Direct Investments (FDIs) and Foreign Institutional Investments (FIIs) only.
For all other inward remittances, AD1 banks now issue a FIRA or FIRS and, in some cases, an NOC, which provide similar information as FIRC. You’ll learn about these in more details as below.
If you’re an Indian seller, exporter, or service provider receiving payments from abroad, the proof of foreign currency payment such as FIRC or FIRA/FIRS/NOC is a vital document. It serves multiple crucial purposes: –
- Proving receipt of foreign inward remittances against your export business & realisation of the outstanding export bills (whenever applicable).
- Claiming any potential tax benefits.
- Qualifying for export promotion incentives through various Government schemes
FIRCs are issued exclusively for payments against FDIs and FIIs since 2016.
So, what about other type of remittances? To cover that aspect, AD1 banks issue a similar document, on their letterhead, conveying the information of the foreign currency payment. This document is called FIRA (Foreign Inward Remittance Advice) or FIRS (Foreign Inward Remittance Statement).
Both serve the same purpose as a FIRC, containing the same information as the old physical FIRCs. –The key difference is that FIRA/FIRS can be issued on the bank’s letterhead and can be provided digitally.
NOC, which stands for No Objection Certificate, contains comparable information to FIRA or FIRS. NOC confirms to the beneficiary bank that the remittance converting bank (intermediary bank) has no objection to the issuance of e-FIRC and e-BRC by beneficiary’s bank.
With the help of FIRA/FIRS/NOC issued by the remittance converting bank / intermediary banks, the remittance receiving bank (beneficiary’s AD bank where the exporters hold their accounts) or the AD bank whose AD code has been used by the Exporter while doing exports can perform trade documentation & FEMA compliance such as IRM creation, e-FIRC and e-BRC generation.
The digital pdf document you get from Payoneer is the FIRA/FIRS/NOC issued by the remittance converting bank, which Payoneer has partnered with.
An electronic Foreign Inward Remittance Certificate, known as e-FIRC, is the digital counterpart of the physical FIRC. Banks issue it after uploading the payment receipt on the Export Data Processing and Monitoring System (EDPMS).
With the advent of an enhanced EDPMS program, the FEDAI issued a special circular dated 8th June 2016 and it discontinued the issuance of FIRCs for all kinds of inward remittances, except the remittances for FDI and FII.
To obtain the e-FIRC, the beneficiary must request the bank to upload the payment receipt on EDPMS. Once the request is made, the bank will upload the payment receipt on EDPMS and generate an inward remittance (IRM) number. This IRM number will henceforth be referred to as the e-FIRC number.
- EDPMS enhanced modules can capture details of all the inward remittances including the advanced ones and AD banks issue e-FIRC to EDPMS, whenever necessary.
- If your exports fall under the category of exports that are recorded in the EDPMS, then your AD bank will issue the IRM once you request them. IRM is an Inward Remittance Message, and it is also known as an e-FIRC number.
- IRM & e-FIRC will be issued by your AD Bank if it finds all the export supporting documents satisfactory along with the FIRA/NOC issued by the remittance converting bank.
The Export Data Processing and Monitoring System (EDPMS) is a software program introduced by the Reserve Bank of India to monitor export transactions. In 2016, this online program was enhanced and is now accessible to all AD Banks to record all exporters’ transactions online, thereby increasing the ease of doing business and transparency.
- Under this system, all the banks must download the SOFTEX forms or shipping bills that the shipping agencies issue. These agencies include Special Economic Zones (SEZ), Software Technology Parks of India (STPIs), and Customs.
- Banks then compare the data with the inward remittance data of the export proceeds that are received by the exporters.
- EDPMS also helps the exporters to demand and receive export benefits faster.
Which bank is responsible for reporting IRM and issuing e-FIRC?
In its Circular Letter No. 16/2016, FEDAI mentions that the beneficiary’s bank is required to report IRM to EDPMS, when the funds are credited to the beneficiary’s account, either through NOSTRO, VOSTRO, or RTGS/NEFT, and it provides further clarification as follows:
Note* – FC stands for foreign currency.
Thus, in all cases, Bank B, i.e., the exporter’s/beneficiary’s bank, must report the IRM and generate an e-FIRC at the exporter’s request.
- The FEDAI guidelines mandate the remittance converting bank that while transferring funds through NEFT/RTGS/IMPS, it must provide full details of the Overseas Remitter, Purpose of Remittance, Currency & Amount of remittance, Name and Account number of beneficiary and instructions to the beneficiary bank and comply with FEMA provisions.
- The FIRA/FIRS/NOC provided by Payoneer’s partner bank would assist the AD bank in obtaining the necessary data required to report the IRM.
- Only the exporter’s AD Bank can issue IRM to EDPMS and issue e-FIRC; further, only that AD Bank can perform export bill realization at the request of the Exporter.
- The FIRA/FIRS/NOC issued in a digital pdf act as the documentary evidence that the export proceeds were received by the intermediary bank in foreign currency, and it acted as the remittance converting bank and then processed the export proceeds through NEFT/RTGS/IMPS mechanism to the beneficiary bank.
Payoneer provides a FIRA/FIRS/NOC for every transaction processed through our platform. You will be able to:
- Receive FIRA/FIRS/NOC directly in your Payoneer account for free.
- Once you receive funds deposited in your account, within 24 to 72 hours, the pdf document will be uploaded to the Documents section post login to your Payoneer account.
- You can view all your available FIRA/FIRS/NOC on one page and search for a specific transaction too. Download them individually or in bulk, with just one click.
- Kindly ensure that you download the FIRA/FIRS/NOC within 180 days of your payment being processed.
Please reach out to Payoneer Customer Care through any of the options available to you, post logging into Payoneer portal and we would be glad to help you.
If you are receiving payments for exports registered in SOFTEX or EDPMS, you must download the FIRA/FIRS/NOC from the Payoneer portal, attach additional export documentation, and submit it to your AD bank. This is essential for IRM reporting, e-FIRC generation, and e-BRC issuance, whenever applicable.
- The lodged shipping bills and SOFTEX entries need to be reconciled with the export proceeds through your AD bank, within the given timeframe as per the Master Direction on Exports.
If you are a freelancer, service provider, or exporter whose exports are not recorded in EDPMS or SOFTEX, then you may not need to take any action. The provided pdf document can be used as proof that your business has received export payments that originated outside India and were brought into India following export OPGSP guidelines of RBI.
- It is always beneficial to check your Tax Advisor or CA on what you need to do, if you are unsure of your business category and if there are any regulatory implications.
What if Payoneer’s bank (remittance converting bank) is also the exporter’s AD beneficiary bank/beneficiary bank?
If Payoneer’s bank partner is also your AD bank, then depending on the bank, you may or may not get FIRA/FIRS/NOC on the Payoneer portal.
- You can always approach your AD bank and mention that the export proceeds were processed by the bank’s Central Trade Operations / Transaction Banking Department.
- The AD bank would be able to liaise internally and help you with IRM reporting to EDPMS, e-FIRC generation, and Bill realization.
- If your exports are not lodged in SOFTEX or EDPMS, then the FIRA/FIRS/NOC would be sufficient.
In case of any difficulty, please reach out to Payoneer Customer Care through any of the options available to you, post logging into Payoneer portal and we would be glad to help you.
If your bank is different from our payment processing partner bank (remittance converting bank), then the action of lodging an inward remittance message (IRM) to EDPMS is pending and it is to be performed by your AD bank as per FEDAI and RBI guidelines.
- To help them with it, the Payoneer FIRA/FIRS/NOC is a sufficient document.
- You need to attach underlying export documents, any other supporting documents and share the same with your AD Bank.
- Once your bank is satisfied with the documentary evidence of export proceeds received against your export business, the bank will report IRM to EDPMS, then the e-FIRC can be issued along with e-BRC, wherever applicable.
For any further clarity or disputes, your bank can send an email to our partner bank (email ID is found on the FIRA/FIRS/NOC or to the standard email ID they follow for such queries)
For the exports that are reported to EDPMS, the AD bank will seek underlying export documentation and monitor export proceeds, to report IRM to EDPMS and generate e-FIRC for the remittance received. The FIRA/FIRS/NOC issued by Payoneer’s AD1 bank would assist your bank in reporting IRM and generating e-FIRC.
- The AD Bank is required to reconcile the lodged export bills against the e-FIRCs and issue a Bank Realization Certificate (BRC) and this is specifically in case of export of goods. AD Banks issue BRC on each export shipment once export proceeds are received and reconciled.
- As an exporter of goods, you may wish to avail financial assistance or duty exemptions available from Government agencies. These agencies need proof of your exports and the BRC acts as that proof helping you avail those exemptions. e-BRC is electronic BRC in simple terms.
- If you are an exporter of goods on a commercial scale, then please ensure to get BRC/e-BRC from your AD bank.
Reserve Bank of India (RBI) issues the list of purpose of payments (referred to as purpose codes) which are unique codes to specify the type of foreign currency transactions.
- Every cross-border payment needs to be tagged with a purpose code & there are set of purpose codes for import transactions as well as export transactions.
- Purpose codes against your export transaction start with ‘P’ whereas purpose codes against import transactions start with ‘S’.
- Ensure that you understand and select purpose code commensurate with the line of your business. You can select the purpose code in your Payoneer account from the drop-down box.
- Payoneer cannot support all the inward remittance purpose codes mentioned in the RBI FETERs list as not all transactions are supported as per OPGSP guidelines.
- Purpose of payment with the purpose code would get mentioned in the FIRA/FIRS/NOC issued by Payoneer partner banks and reported to RBI as well.
Below are the links to all the circulars and FAQs mentioned in our blog-
- FEDAI Circular on Issuance of Foreign Inward Remittance Certificate (FIRC)
- FEDAI FAQs on EDPMS
- Master Direction – Export of Goods and Services
- RBI FETERS reporting Purpose Codes – 1 & 2 (*this list is not updated as some of the purpose codes like P0105, and P0107 are already discontinued by the RBI video )
- RBI FED mailbox – Please refer to ‘EDPMS – Responsibility of remittance receiving and converting bank’
This article is provided for informational purposes. All information is presumed accurate based on the publicly available sources and official circulars at the time of publication. Payoneer cannot be held responsible for any misinterpretations and strongly recommends that exporters, freelancers, and service providers consult with their Chartered Accountants or Tax Advisors for guidance on legal obligations or any ambiguities.