The Reserve Bank of India (RBI) is set to introduce a standard operating procedure (SOP) to enable banks to expedite the issuance of Foreign Inward Remittance Certificates (FIRC) and Electronic Bank Realization Certificates (e-BRCs). This proactive step comes in response to the challenges faced by exporters using the rupee-based trading mechanism for foreign trade.
Understanding FIRC (Foreign Inward Remittance Certificate)
- A Foreign Inward Remittance Certificate (FIRC) serves as a crucial document, acting as a testimonial for all incoming remittances to India.
- Statutory authorities widely accept this document as proof that individuals or businesses, including limited companies, partnership firms, sole proprietorship firms, among others, have received foreign currency payments from abroad.
Insight into Electronic Bank Realization Certificate (e-BRC)
- An Electronic Bank Realization Certificate (e-BRC) holds significant importance for export businesses. It is a digital certificate issued by a bank to confirm that the buyer has made payment to the exporter for services or goods exported.
- Export businesses seeking benefits under the Foreign Trade Policy (FTP) are required to furnish a valid BRC as proof of payment realization against exports.
- By streamlining the issuance of FIRC and e-BRC, the RBI aims to provide a more efficient and hassle-free experience to exporters, simplifying their foreign trade transactions and documentation process.