Key points
- AD Category I banks are licensed by RBI to deal in foreign exchange.
- They examine documents, make or receive payments, report them and close IDPMS and EDPMS entries.
- Each Shipping Bill and Bill of Entry is tied to the AD bank code declared to customs.
- Clear requests that quote the right references get processed faster.
What an AD bank is
Authorised dealer Category I banks are banks authorised by RBI under FEMA to handle foreign exchange transactions for their customers. RBI delegates much of the day-to-day supervision of trade transactions to them through its Master Directions.
What the bank checks and reports
For each transaction the bank checks that the documents support the payment, applies the right purpose code, reports the transaction to RBI and, for goods, matches it in IDPMS or EDPMS. It can approve extensions, reductions and write-offs within its delegated powers, and refers the rest to RBI.
Working well with your bank
- Register your AD bank code with customs at each port you use, and keep it consistent.
- Quote Bill of Entry or Shipping Bill numbers, dates and port codes on every request.
- Send complete packages: letter, application form, tax papers and supporting documents together.
- Reconcile against the bank's outstanding statements monthly.
FxLayer prepares the package for each bank from the bank master, including account details, charges and branch codes, and tracks how long each request has been with the bank.
Questions
This article is general information on Indian foreign exchange and tax rules as they stood on the date shown. It is not legal or tax advice. Rules and limits change; confirm the current position with your AD bank, the relevant RBI Master Direction or your adviser before acting.