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FIRC (Foreign Inward Remittance Certificate)

Santhosh Kumar 19/07/2023

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FIRC (Foreign Inward Remittance Certificate) upsc notes
Source: TH
Reserve Bank of India (RBI)
Set to issue standard operating procedure (SOP)
To banks
To expedite the issuance of proofs
Of inward remittances
For exporters
Aim
Address challenges faced by exporters
In rupee-based trading mechanism
For foreign trade
What is FIRC (Foreign Inward Remittance Certificate)?
Document that acts as a testimonial
For all the inward remittances
Entering India
What is an Electronic Bank Realization Certificate (e-BRC)?
Vital digital certificate
For export businesses
A bank issues e-BRC
To confirm the buyer made payment
To the exporter
Against the export of services or goods
The BRC is the proof
Of realization of payment
Against exports
Issues with FIRC (Foreign Inward Remittance Certificate)
Issue arises when certificate
From one bank
Not being sent to another
Hampers the generation
Of electronic bank realisation certificates (e-BRCs)
Creates problem for exporters
As e-BRCs
Serve as proof of payment
For their exports
Make them eligible
For benefits
Under the Foreign Trade Policy
Example
Exporter in India
Receives payment for exports
From a foreign buyer
Through a bank
Requires FIRC from that bank
As evidence of the inward remittance
If the FIRC is not transmitted
To the exporter’s bank
The exporter cannot obtain necessary e-BRC
May prevent them
From accessing benefits or incentives
Provided by the government
For export transactions

Categories: External Sector/Open Economy/Globalisation, Trade & Commerce

Tags: 19.07.2023, Newsbits

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