Credit to NRE Account through RTGS / NEFT / NECS / ECS - Issuance of Foreign Inward Remittance Certificate (FIRC)

Credit to NRE Account through RTGS / NEFT / NECS / ECS -
Issuance of Foreign Inward Remittance Certificate (FIRC)

NRE customers are finding it beneficial to receive funds in their account via the Credit Push Systems viz RTGS, NEFT, NECS and ECS, than the old-fashioned Cheque method.

As per RBI, Lr.No. DPSS.(CO).EPPD.No.327/04.03.02/2009-10  dt.14/08/2009, RBI has informed that the  onus of ensuring that credits to NRE accounts comply with the extant FEMA Regulations and the Wire Transfer Guidelines  rests with the originating institution / sponsor bank.

This is to ensure that the STP in Credit Push transactions is seamless and settlement takes place within the TAT levels.

In the recent past, RBI has received references from Member Banks seeking clarity on issuance of FIRC’s to NRE accounts.

As the number of such references were going, RBI,DPSS has clarified the matter.

The clarification is vide RBI, DPSS Lr.No.RBI/2010-11/315, DPSS.(CO).EPPD.No.1309/04.03.01/2010-11     dt. December 13, 2010.

This circular can be accessed @

The highlights are : - http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6148&Mode=0

*    In terms of para 3.A.6 of Exchange Control Manual read with AD (MA series) circular No. 11 dated May 16, 2000, FIRC should not be issued against remittance for credit to NRE account.

*          Inward remittances especially via RTGS/NEFT are routed to Non-NRE Accounts too. In this case, FIRC has to be issued by the Bank which converts the foreign currency into rupees.            

The remitting (intermediary) Bank instead of routing the Inward Remittance proceeds via Demand Draft (INR), might prefer to route through RTGS/NEFT. In this case, the details have to suitably keyed in while processing the RTGS/NEFT Transactions. 

It would be a customer friendly step, if the contact details of the Inward Remittance Department of the Intermediary Bank/Remitting Bank are mentioned in the RTGS/NEFT Message itself.

This will enable the customers to directly contact the concerned department for any clarifications, if any.

What is a FIRC?

Receipt of foreign exchange in India is called Inward remittance. Apart from exports there are other transactions, which generate inward remittance. For example Non-resident Indian staying abroad may remit foreign exchange to their relatives in India. Inward remittances are usually in the nature of foreign currency notes, foreign currency traveller cheques, foreign currency cheques / foreign currency demand drafts and inward telex transfers.

Authorised dealers should issue foreign Inward Remittance Certificate (FIRC) in the prescribed form if requested by the beneficiary.

           (i).          If the amount received exceeds Rs.15, 000/- in value, then the FIRC should be issued on security paper. The FIRC forms should be printed on security paper. If, however, the amount received from abroad does not exceed Rs.15, 000, then the FIRC may be issued on the printed letterhead with logo of the authorized dealer instead of on the security paper.

      (ii).          Exporters may ask for certificates to be issued by authorised dealers for submission to the office of the Director General of Foreign Trade (DGFT). Authorised dealers may issue such certificates - after verifying all the required particulars.

 (iii).          Sometimes customers may ask for inward remittance certificates for submission to the Income tax Department. Authorised dealers may also comply with such requests.

      (iv).       Whenever exporters receive advance remittances, it is their practice to obtain FIRC for the amount so received from the bank concerned. Subsequently as and when export is made and documents are presented by the exporter, the FIRC mentioned above should be called for in original and necessary endorsement made thereon by the authorised dealer.