Foreign Inward Remittance Certificate

The traditional Foreign Inward Remittance certificate is available digitally as an Electronic version. it is easier to manage, store, and retrieve because it has the same information as its paper counterpart but in an electronic format.

As per the RBI, AD Category I banks must report every money transfer to India, i.e. inward remittances, to EDPMS, including any outstanding transfers or advances they have received for the export of goods, services, or software. When the home bank receives advice, statement or NOC from the remitter bank and the required documents, they will generate an IRM on the EDPMS.

• When the exporter receives the entire shipping bill payment in the bank account within nine months of the shipping bill date, they will submit an Electronic Foreign Inward Remittance Certificate (eFIRCs) and export documents with the respective bank.
• BRC will be generated by the bank upon receipt of the export payments.
• The bank staff generates an XML file containing information about e-BRC and will digitally sign it.
• The e-BRC will be uploaded by the bank on the DGFT server once or twice daily at a predetermined frequency.
• The banks will be uploading rupees equivalent to the realised foreign exchange based on the exchange rate defined by the Central Board of Excise and Customs (CBEC).
• The server gives acknowledgment to the bank about XML files being uploaded.
• The exporter can view the status and print/download the e-BRCs from the DGFT website and claim export incentives.

For Reserve Bank of India (RBI)

• The regulatory authorities such as the RBI, FRIC directly helps in monitoring and controlling the availability of foreign exchange and hence has a key role in helping to preserve the stability of the nation’s economy.
• Supervision of such funds that are received from other parts of the world aids in countering money laundering and barring the promotion of activities that are detrimental to the national interests.

For Beneficiaries

• For individuals and businesses, the FRIC validates foreign income for tax purposes and allows exporters to claim tax concessions. It serves as essential evidence during tax filings, without it, tax benefits are unattainable under this category of transactions recorded.
• The FRIC also enables ease of application when it comes to government loans and subsidies and is an essential instrument for obtaining foreign exchange for travel or investment purposes.
• It serves as a legal record for accounting and auditing purposes, safeguarding the beneficiary's interests, and notifies foreign importers that their payment has been received.

• Verifying inward remittances: The FIRC certificate format is useful for freelance and service providers to verify that they have received payment from clients abroad.
• Requisite for key trade programs: The FIRC is also essential for submission to the DGFT to qualify for the EPCG program and advanced License.
• Facilitating foreign trade: Businesses frequently use FIRC as documentation for trade activity settlement and as evidence of export.

The beneficiary must first apply the FIRC request form to the bank. The FIRC request form contains:

• Beneficiary information
• Unique Transaction Reference Number (UTR): The Transaction ID or UTR is a unique number assigned to each transaction.
• Name and address of the payee
• Account number
• Recipient’s name
• Remittance Sum: Details about the payment, including the received amount in foreign currency and its equivalent value in Indian rupees.
• Date of transfer
• Purpose of the payment

The person who receives the payment from outside India is known as a Beneficiary. When the beneficiary receives money in foreign currency, it will be credited to the beneficiary account through an Authorised Dealer (AD) of the RBI.

An Inward remittance Message (IRM) is generated on the EDPMS by the bank after the beneficiary submits the FIRC request form to it. The beneficiary account will receive the FIRC from the bank once the fees have been paid. The IRM number is the FIRC number.

Both FIRC and BRC certificates are issued by banks in India to provide proof of foreign currency remittance. However, there are some differences between the two certificates:

• While BRCs are more general certificates, FIRCs are issued for specific purposes: such as claiming tax benefits or applying for government loans and subsidies. While FIRC deals with inflows of funds from foreign sources for a variety of purposes, BRC is more concentrated on outflows of funds for particular trade-related activities.
• The bank's authorized signatory verifies the authenticity of FIRCs: The bank's authorized signatory does not authenticate BRCs.
• FIRCs must be issued on a prescribed RBI form: BRCs, on the other hand, are not issued on a prescribed form.