As an Indian exporter, navigating the complexities of international transactions and compliance can feel like solving a complex puzzle. Today, we'll explore a crucial piece of that puzzle: FIRC

FIRC or its full form Foreign Inward Remittance Certificate, is a document issued by banks as proof of receiving international payments. Over the years, regulations around FIRC have changed significantly, creating confusion and mystery around this important document. Let's clear the air and decode the what, who, and why of FIRC.

As we've covered, the full form of FIRC is a Foreign Inward Remittance Certificate and it serves as a proof of foreign transfers. Until 2016, <a href="https://rbidocs.rbi.org.in/rdocs/FEMAMASTER/PDFs/1061.PDF?no_follow=true/">AD Category I Banks</a> were authorised to issue FIRCs to exporters for receiving international payments. This document was essential for exporters to obtain after each cross-border payment. It served not only as proof of payment receipt but also as a crucial document for claiming export-related incentives, such as tax exemptions on foreign currency payments received in India.

Changing RBI Guidelines: From FIRC to FIRA

FIRA is often still referred to by its old name, FIRC. While both documents serve the same purpose, FIRC is technically only issued for returns on&nbsp;Foreign Direct Investment (FDI )or Foreign Institutional Investment (FII). For all other export collections, FIRA is what you need.

Anyone receiving foreign payments needs a FIRC certificate or FIRA. Beyond goods and service exporters engaging in international trade, many individuals and entities may receive international payments without realising it.&nbsp;

Overall, the following typically require a FIRA:

Beyond compliance, here’s why FIRA is crucial for exporters:

This is a sample FIRA/FIRC document. All crucial remittance details have been masked for security purposes. Now let’s break the content of a FIRA down: 

Receiving your export payment directly through your bank can make obtaining a FIRC/FIRA a lengthy process. You need to submit a request to the bank, and the bank typically takes 7-15 days to provide the FIRA. You may also need to follow up multiple times, and banks often charge at least INR 400 to issue the FIRA, depending on the institution.

Getting a FIRA might sound like a hassle, but with Skydo, it's a breeze. Our fully automated payment system along with built-in partnerships with banks, ensures effortless compliance with RBI guidelines, without needing any manual intervention. 

When you receive an export payment through Skydo, we automatically generate the required FIRA for you at no extra cost. Just log into our user-friendly dashboard, and you'll find your FIRA ready to download, complete with all the details you need. 

In conversations around FIRA, there are a few more terms that get frequently mentioned, one of them being eFIRC. So what exactly is eFIRC?

Understanding the difference between electronic Bank Realisation Certificate (eBRC) and FIRC

Generally speaking, e-BRC applies mostly to goods and software exporters (under <a href="https://stpi.in/en/home?no_follow=true/">STPI</a>). If you are one of them, you can use this simple decision tree to understand which documents you will need:

GST and FIRC/FIRA: Everything you need to know

Exporting goods and services is considered Zero-Rated Supply, meaning it is subject to 0% GST. However, to claim a GST refund for the input tax credit, exporters must provide the required documents including FIRC or FIRA. These documents authenticate that the business is claiming a refund because it exported services and couldn't offset its input tax credit as it would in normal domestic business. Without FIRA, claiming a GST refund may not be possible

Claiming GST refund with FIRA; Things to take note of:

As we surge in cross-border transactions, ensuring compliance and safeguarding against illicit activities has become a pressing concern. However, at Skydo, we believe your focus should be on advancing your business, not on grappling with compliance challenges.

With Skydo, enjoy seamless international payments, delivered promptly and without any hidden fees. But that's just the beginning! Every time you receive a cross-border payment, an auto-generated FIRA is readily available for you to download, relieving you of compliance burdens so you can devote your energy to what truly matters: driving your business forward.

Dive into the world of FIRC. Explore the full form, importance, and process of obtaining FIRC for your international transactions

Foreign Inward Remittance Certificate (FIRC): Full form, meaning and RBI guidelines

Prashanth

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Prashanth Kumar

If you've ever sent or received a <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">SWIFT payment </a>(international bank transfer via the SWIFT network), you’ve probably come across the term "MT103." It’s a document issued by the sender’s bank, detailing essential information such as the sender, recipient, forex rate, and other crucial transfer details. In this article, we’ll break down what MT103 is, why it’s important, and how you can obtain it.

MT103 is a standardized SWIFT message sent from the sender’s bank to the recipient’s bank during an international transfer. It acts as a formal receipt that includes the transaction details like your name, the recipient’s name, the amount, and currency. Your bank securely sends this document via the SWIFT network to the recipient’s bank. Once verified, the recipient's bank credits the account. You can request for MT103 document from your bank which will contain all necessary details about the transaction, like your name, the recipient’s information, the amount, currency, and <a href="https://www.skydo.com/blog/is-ifsc-and-swift-code-same">SWIFT/BIC code.</a>

While you may not necessarily need MT103 for every overseas SWIFT transaction, here’s why it is important:

MT103 acts like your receipt for an international transfer. If you're the sender, you can provide this to the recipient as proof that the payment has been made. If you're the receiver, you can request the MT103 to confirm that the payment is on its way.

MT103 enables easy payment tracking, giving you full visibility into the payment’s journey. If a payment gets delayed, for instance, at an intermediary bank, the MT103 allows your bank to trace and resolve the issue faster.

Thanks to its standardized format, MT103 ensures smooth and efficient communication between different banks, making international transfers less complex and more transparent.

An MT103 SWIFT message contains all the details necessary for processing a transfer. Here’s what a typical MT103 includes:

All this information helps ensure that the transaction flows smoothly and gets where it needs to go.

As we mentioned, the format of the MT103 SWIFT message may vary across banks. However, every MT103 message will have certain tags using which you can decode the MT103 message. Here we will be describing all the mandatory tags that are present in every MT103 SWIFT message and a few optional ones:

Beyond the mandatory tags, MT103 SWIFT message may also contain a few optional tags including:

When you make a SWIFT transfer, your bank automatically generates an MT103. However, you won’t receive this document unless you request it. Contact your bank to issue an MT103, although some banks may charge a fee, and it could take a few days to process.

If you’re awaiting a payment from a client, ask them to request the MT103 from their bank and share it with you.

If you're sending a SWIFT transfer, you can request the MT103 from your bank. If you're receiving the payment, ask your client to request it from their bank and share it with you.

How to Track Your Payment Status using MT103

Delays in SWIFT payments are common, especially when intermediary banks are involved, which can be frustrating for both the sender and receiver. Here’s how you can track the status of your SWIFT payment:

SWIFT GPI: The SWIFT Global Payments Innovation (GPI) enables banks to offer real-time payment tracking. So if you have your MT103 or received the MT103 for your payer, you can contact your bank to track the payment using SWIFT GPI and share the updates with you whether it's sent, in progress, or received.&nbsp;

Bank Portals: Many banks now offer tracking tools via their online banking platforms. You can use your MT103 reference number to monitor your SWIFT payment’s progress. If you prefer, you can also reach out to your bank directly for updates.

Independent Tools: There are also certain third-party tools and platforms that allow you to check the status of your payment independently,&nbsp;

Make the most of your international payments with Skydo

While SWIFT remains a popular choice for cross-border transfers, it’s no secret that these transactions can be both costly and time-consuming. As a result, businesses are increasingly seeking alternatives.

That’s where platforms like Skydo come in. Skydo helps businesses in India receive international payments securely, seamlessly, and affordably. With free <a href="https://www.skydo.com/blog/virtual-account-numbers">virtual accounts</a> in major regions like the US, UK, Europe, Canada, Australia, and Singapore, businesses can receive payments through local transfers—bypassing hefty SWIFT fees, and long processing times. With real-time tracking, you can see exactly where your payment is at every stage—no need to hassle with getting an MT103 or jumping through hoops to track it.

Make the switch to Skydo today and experience a faster, more cost-effective way to receive international payments.

MT103 swift message: Format, Fields and How to get it

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Indian businesses exporting products and services abroad significantly affect the economy's overall growth. Exporting to international markets brings high-value foreign currencies and contributes to the national GDP (Gross Domestic Product) growth.&nbsp;

However, until 2014, there was no unified system to track all these export operations, which led the Reserve Bank of India (RBI) to launch the Export Data Processing and Monitoring System (EDPMS in full form).&nbsp;

If you are exporting your services abroad, this article will help you learn more about EDPMS, its process, the EDPMS caution list, and more.&nbsp;

The Export Data Processing and Monitoring System (EDPMS) is an online platform introduced by the Reserve Bank of India (RBI) in 2024 to enhance the efficiency of monitoring export transactions in India.&nbsp;

Launched on <a href="https://www.moneycontrol.com/news/business/press-release/launchexport-data-processingmonitoring-system-(edpms)-1110959.html">March 1, 2014</a>, The Export Data Processing and Monitoring System (EDPMS) is a central system that:

Before the launch of EDPMS, the export lifecycle was completely manual. Exporters were required to submit export documents, including Bills of Lading, Airway bills, Invoices, etc., to the bank. This resulted in longer timelines and a broader scope of exploitation.&nbsp;

EDPMS was launched for the following reasons:&nbsp;

Thanks to EDPMS, exporters now have greater visibility over inward remittances. Additionally, with RBI strictly regulating the export lifecycle, the Indian business environment has become much more stable.&nbsp;

EDPMS clearance is a must for exporters in India. If exporters fail to comply with the EDPMS requirements, their banks may place them on a caution list (more on this later). This listing can have severe implications, including increased scrutiny from regulatory bodies and potential disruptions to their export activities.

Note that if you are a freelancer offering services to international clients, you don’t need to worry about EDPMS status. The majority of freelancing services don’t fall under the traditional definition of export. If you don’t use SOFTEX forms, you don’t need to register your transactions in EDPMS.

To obtain your EDPMS clearance, follow these steps:

Step 1: Register on the EDPMS portal

Step 4: Payment receipt and processing

Reconciliation and issue resolution

Here are a few additional tips for exporters to make the process seamless:&nbsp;

How to check your Shipping Bill EDPMS Status online?&nbsp;

To check your shipping bill EDPMS status, follow the below-mentioned steps:&nbsp;

What Documents do I Need to Close my Shipping Bill Cycle on EDPMS?&nbsp;

You will need the following documents to close your shipping bill cycle on EDPMS:&nbsp;

How to close the shipping bill in EDPMS?&nbsp;

Below are the steps to close the shipping bill in EDPMS:&nbsp;

The EDPMS Caution List is a mechanism the Reserve Bank of India (RBI) uses to monitor and flag exporters with outstanding export proceeds or compliance issues.&nbsp;

This system flags exporters who don't receive payments on time or have other rule-breaking issues. As per <a href="https://www.indiantradeportal.in/vs.jsp?lang=0&amp;id=0,25,236">FEMA</a>, shipping bills on EDPMS should be closed within nine months of shipment dispatch.

<a href="https://leatherindia.org/edpms-rbi-circular-no-04-dated-15-9-7/#:~:text=The%20exporters%20would%20be%20caution,for%20reckoning%20the%20realization%20period.">RBI's 2016 circular</a> stated that exporters would be automatically added to the caution list if a shipment bill wasn't closed on EDPMS within two years from the shipment date.

Many exporters faced issues receiving payments within two years for various reasons, including fraud or importers not abiding by terms.

In<a href="https://chemexcil.in/circulars/rbi:--export-data-processing-and-monitoring-system--edpms--module-for-%E2%80%98caution-de-caution-listing-of-exporters%E2%80%99---review/5040/6ddbc6ce36133c878b8563579df3d81f.html#:~:text=ALL%20THE%20MEMBERS%20OF%20THE,process%20exporter%2Dfriendly%20and%20equitable."> October 2020</a>, RBI updated the EDPMS system. Exporters are no longer automatically put on the caution list. Instead, AD Category I banks (Authorized Dealer Category-I refers to banks and financial institutions in India that the RBI authorises to conduct a wide range of foreign exchange transactions) have the authority to add exporters to the list if they suspect discrepancies.

EDPMS automates and simplifies the export reporting process, leading to smoother transactions and reduced administrative burdens for exporters. This efficiency helps manage export documentation more effectively, allowing businesses to focus on their core operations.&nbsp;

An exporter previously spent hours manually filling out forms for each shipment. This led to errors, frustrating visits to the bank, and delays in payment processing. EDPMS helps the exporter upload shipping details simultaneously, automatically populating all other documents. This helps the exporter reduce errors, save time, minimise bank visits, and accelerate payment processing. EDPMS has helped the exporter focus more on their core business operations.&nbsp;

If you're involved in export transactions in India, you need EDPMS clearance. The Reserve Bank of India (RBI) regulates this requirement to ensure all export transactions are properly documented and reported.

EDPMS enhances transparency in international trade by providing a clear mechanism for tracking export transactions and inward remittances. This transparency is crucial for maintaining trust among exporters, banks, and regulatory authorities.&nbsp;

The system plays a vital role in collecting accurate and timely data on export bills, essential for monitoring and managing the country’s export activities. This data helps in making informed decisions regarding trade policies.&nbsp;

What is the Difference between EDMPS and IDPMS?&nbsp;

While both EDPMS and IDPMS (Import Data Processing and Monitoring System) are essential tools for monitoring trade activities in India, EDPMS is specifically designed for managing export transactions, ensuring exporters' compliance, and facilitating the tracking of export-related financial data.&nbsp;

In contrast, IDPMS focuses on import transactions, ensuring all necessary documentation is in place for goods entering the country.&nbsp;

To summarise, EDPMS focuses on exports, and IDPMS focuses on imports. The detailed differences between EDPMS and IDPMS are as follows:&nbsp;

Role of Skydo in Streamlining Compliance&nbsp;

Skydo streamlines compliance for Indian exporters and freelancers engaged in international trade. It automates critical processes such as <a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">FIRA generation</a>, purpose code management, and KYC procedures, simplifying regulatory compliance.&nbsp;

Skydo's real-time tracking and reporting features ensure transparency. Skydo also facilitates GST compliance, making it easier for exporters to claim refunds.&nbsp;

With its centralised approach, Skydo significantly reduces the administrative burden associated with international payments.&nbsp;