S0015 Purpose Code: Repayment of loans and overdrafts taken by ADs on their own account

Purpose code S0015 is used when an Indian authorised dealer bank pays a foreign lender to repay loans or overdrafts taken on its own account.

What is the S0015 purpose code?

Purpose code S0015 is used when an Indian authorised dealer bank sends money abroad to repay a loan or overdraft it has taken from a foreign lender on its own books. This covers outward remittances of principal, interest, fees or charges linked to those overseas borrowing or overdraft facilities. It does not apply to repayments of loans taken by regular Indian businesses or individuals, which fall under other specific capital account purpose codes. Under RBI FEMA guidelines, this outward payment is classified under the capital account and reported accordingly.

When to use S0015 purpose code?

Use S0015 when an authorised dealer bank is remitting funds overseas to settle principal, interest or charges on its own foreign loan or overdraft facility. It is the correct RBI purpose code for capital account repayments where the borrower is the AD bank itself, not its customer, and the facility was raised from an overseas lender. S0015 covers the bank's own borrowing, not customer loans or trade credit arranged through the bank.

When to use a different code:

• Use the appropriate trade-related capital account purpose code when the repayment relates to supplier credit or buyer's credit for import transactions
• Use the relevant external commercial borrowing purpose code when an Indian company (other than the AD bank) is repaying its own overseas loan
• Use the matching P code when you are receiving money rather than paying

Who typically uses S0015 purpose code?

S0015 is typically used only by Indian authorised dealer banks when they remit funds abroad to repay foreign currency loans or overdraft lines taken on their own account. Regular corporates, SMEs, startups and individuals do not usually use this code, since their overseas borrowing repayments fall under other specific capital account categories.

Examples of transactions covered

• Remittance by an Indian AD bank to repay a scheduled instalment of principal on a term loan taken from an overseas bank
• Interest payment sent abroad by an AD bank on a revolving credit facility it has availed from a foreign financial institution
• Outward remittance to clear an overdraft balance maintained by an Indian AD bank with its correspondent bank overseas
• Payment of exit fees or prepayment charges by an AD bank to a foreign lender for early closure of its own external borrowing

When NOT to use S0015 purpose code

• The repayment relates to supplier's credit or buyer's credit taken for import of goods or services by a customer (use the appropriate trade-related capital account purpose code)
• The payment is for repayment of an external commercial borrowing by an Indian company or borrower other than the AD bank itself (use the relevant ECB repayment purpose code)
• The remittance is for regular operating expenses, service imports or goods imports rather than repayment of the bank's own foreign borrowing (use the matching current account or trade code)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S0015, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S0015 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Review the borrowing documents: The AD bank identifies the foreign loan or overdraft being repaid and gathers the facility agreement, sanction details and repayment schedule.
2. Complete applicable capital account reporting: Ensure that the original overseas borrowing has been reported under the correct capital account framework and that any required updates or closures are filed in line with RBI instructions.
3. File Form 145: Submit the declaration before remitting, with Form 146 from your CA where the taxable amount exceeds ₹5 lakh in the Tax Year.
4. Complete Form A2: State the purpose of the outward remittance as S0015 and submit the supporting documents to your bank.
5. Get your MT103: Once the payment is sent, request the SWIFT MT103 as proof and retain your Form A2 record.

Common mistakes to avoid

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Using a customer loan code: Tagging the repayment under a general external commercial borrowing or trade credit code when it is actually the AD bank's own foreign borrowing.
2. Code and facility mismatch: The code not matching what the foreign loan or overdraft documents describe, which flags the payment.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a payment that is not on the specified list, which carries a ₹1,00,000 penalty per instance.
4. Incomplete documents: Missing loan agreement, approval letters or Form A2, so the bank holds the remittance until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an outward code for an inward receipt: Applying a payment code to money coming in instead of the matching P code.

How Skydo helps Indian businesses with cross-border payments

S0015 covers capital account transactions, which sit outside the PA-CB framework and which Skydo does not process. If you also invoice foreign clients or pay overseas vendors, here is where Skydo fits.

1. Complete onboarding: Share PAN, Aadhaar and business details. Setup is fully online and takes about five minutes.
2. Get virtual account details: Receive from international clients in USD, GBP, EUR and other currencies they already pay in.
3. Pay your overseas vendors: Send payments to foreign suppliers, software platforms and service providers under Skydo's outward approval.
4. Documentation in one place: Your invoices, remittance records and payment proofs stay together for your CA and your AD bank.
5. A rate you can see: The live mid-market rate with a transparent fee, instead of a markup hidden inside the bank's rate.