Insights · 4 guides

Banking guides for foreign trade

These guides are for the conversation with your AD bank, not for the customs entry itself. The bank examines the papers, makes or receives the payment, and closes the IDPMS or EDPMS entry. One guide says what the bank checks and what it will not take from you. Another is the purpose-code list: the code on the form decides the reporting, the tax questions and, for many payments, the goods or services treatment. A third chooses Form A1 or Form A2 for the remittance in front of you. A fourth is a buyer’s checklist for a platform that claims to follow the same entries. Read the bank’s role first if you are new to the desk. Each guide names its author and its sources.

The banking guides

Title and a line on what that guide covers. The short answer stays on the guide.

Form A1 or Form A2: which application does your bank need?By CA Abhay Jaiswal · 5 minEvery outward payment starts with an application to your AD bank. Picking the wrong one is one of the most common reasons a payment request comes back.RBI purpose codes: the five characters that classify every paymentBy CA Prachi Goel · 5 minThe purpose code tells your bank, RBI and the tax department what a payment is for. It decides the forms you file, how the payment is reported and which open items it can settle.Your AD bank: the gatekeeper for every foreign trade paymentBy CA Abhay Jaiswal · 6 minRBI does not see your invoices. Your AD bank does, and it is the bank that reports, matches and closes each transaction on RBI's systems.EDPMS and IDPMS software: a checklist for exporters and importersBy CA Abhay Jaiswal · 7 minA spreadsheet tracks a dozen Shipping Bills well enough. It stops working when one payment settles five bills, an advance waits for goods, two banks hold your entries and the bank's list disagrees with yours. That is where software earns its place, if it does the right things.

Where banking is handled

Bank letters and formsForm A1, Form A2 and request letters, from the record.FX rates and bank spreadsEvery bank's rate compared with the mid before you book.Purpose code finderThe RBI code for a payment, and the form, tax and GST that follow.

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