Foreign Inward Remittance Certificate (FIRC): Meaning, Full Form & How To Download

Receiving international payments is rarely smooth sailing. Between long settlement delays, hidden fees, and the constant struggle of fluctuating FX rates, it's already a hassle. The last thing you need after all that is another headache, like chasing your bank for FIRCs and missing out on the benefits those hard-earned export payments are supposed to bring.

That's why it's crucial to clearly understand what FIRCs are and why they matter. Knowing their significance can mean the difference between regulatory compliance issues and smooth, benefit-packed global transactions. In this article, we'll discuss what is FIRC, full form of FIRC in banking, its benefits and how you can obtain the certificate.

Foreign Inward Remittance Certificate is an essential document issued by authorised banks that serves as evidence of a global fund transfer for payment of an export. These banks are a special category of banks known as AD (Authorised Dealer) Category 1 Banks that are assigned the role of overseeing foreign exchange transactions. Among their many functions, one is issuing FIRC documents to exporters receiving payments from abroad.

A Foreign Inward Remittance Certificate usually contains information related to inward remittances, such as the amount of foreign currency received, the same amount converted in INR, and the source of transfer. In addition to this, your FIRC certificate format also includes:

• Name and address of the sender and receiver of funds
• Name and address of the bank that first processed the foreign transaction
• The foreign exchange rate that's applied to the transaction
• Demand Draft, Telegraph Transfer, transaction number, or cheque number
• Purpose code of the remittance, as per the recipient of the fund

There are certain categories of people or organisations that are required to obtain FIRC when they receive cross-border payments. These include:

• E-commerce shops that receive payments from foreign customers
• Salaried individuals who get compensation in foreign currency
• Export businesses that export from India
• Freelancers who get salaried from foreign clients
• Indian service providers who receive foreign transactions in exchange for their service
• Goods and service exporters from India
• International merchants
• Remote-based organisations within the country that work for overseas companies

In India, FIRC is issued generally issued by:

1. Authorised Dealer Banks

RBI specifically authorises these banks to handle cross-border transactions. Both public and private sector banks are included in this category. The bank that processes your export payment is the one that issues FIRC.

2. Fintech Companies

Fintech companies often issue eFIRC in collaboration with authorised banks. Since the document is issued online, the process is much quicker and doesn't include any fees that banks may usually charge.

Once you have received your international payment for the goods or services you have exported, you need to request your bank for the FIRC. It usually requires filling out a request form that will have details like:

• Receivers name
• Name and address of the sender
• Date of transfer
• Amount of funds received
• Purpose of the remittance
• Account number
• Unique Transaction Reference (UTR) number

After you have submitted this request form, your bank will generate an Inward Remittance Message (IRM) on EDPMS. The IRM number is actually your FIRC number, too. After paying a fee, your authorised bank will issue this FIRC into your account, which you can download online. The processing time typically takes 3-10 working days, and sometimes, you may need to follow up as well. However, with Xflow, eFIRC is automatically generated after every payment with no additional fees.

Since foreign exchange transactions fall under the regulatory ambit of the RBI, specific guidelines have been issued regarding the issuance of FIRC. According to these guidelines:

• Only AD (Authorised Dealer) Category I banks can issue FIRC.
• Authorised banks have to report every global payment made to India as a remittance to the EDPMS.
• The issuance of physical FIRC was discontinued in 2016, except in cases involving FDI or FII. As a result, banks can only issue eFIRC now.

In 2016, RBI introduced the Export Data Processing Management System (EDPMS) to digitise and simplify the export management process. Following this, RBI mandated all authorised banks to stop issuing physical FIRCs to exporters. So, instead of FIRC, under EDPMS, banks now issue FIRA or Foreign Inward Remittance Advice to serve as proof for export payments.

FIRA is like a receipt that has details of the transaction. It's crucial for maintaining regulatory compliance, accounting, and tax purposes. FIRC is now mostly issued in specific transactions like receiving inward remittances from Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII).

eFIRC is just a digital version of the FIRC certificate that is issued online. eFIRC is actually a number that's issued by banks on the EDPMS portal after an international transaction takes place. This is relevant for businesses that receive export payments through one bank but have submitted their export documents to another. In such cases, proper documentation, like an e-FIRC, is essential to link the payment with the export. The bank that received the export payment will issue the eFIRC on EDPMS on request from the exporter. This eFIRC will be used by the other bank to match the payment with export documents.

FIRC is quite an essential document, and you must obtain it from the relevant authority. First, it's the proof that you have received a specific amount in cross-border payment. Other reasons why FIRC is essential are:

1. Export incentives: There are many government schemes that provide exemptions and various benefits on your foreign currency payments. To avail of these benefits, you need to show your FIRC as evidence of the transactions to the Directorate General of Foreign Trade (DGFT) and the Central Board of Indirect Taxes and Customs (CBIC).

2. Regulatory Compliance: FIRC ensures compliance with the RBI and Foreign Exchange Management Act (FEMA) guidelines. This helps in facilitating transparency in cross-border transactions.

3. GST Refunds: Exporters have to pay IGST during the export process. However, exports come under the zero-rated supplies category, which means they can get a refund of this amount. FIRC is submitted as proof to initiate this GST refund.

Sometimes, exporters can encounter several problems when requesting their FIRC from banks. These can be:

1. Delay in FIRC issuance

If your FIRC hasn't arrived within the usual processing time, here's what you can do:

• Check your email's spam folder, especially for e-FIRCs sent digitally.
• Reach out to your bank's customer support and provide your transaction or request reference number.
• Visit your home branch with all relevant transaction details to follow up in person if needed.

2. Inaccurate information on FIRC

If you spot any errors on your FIRC:

• Get in touch with your bank right away.
• Share supporting documents that clearly show the correct details.
• Request a revised FIRC.

Pro tip: Always double-check your submitted details beforehand to avoid correction delays later.

3. Need of FIRC for past transactions

Most banks accept FIRC requests for transactions up to 1-2 years old. To apply, you'll typically need the following:

• Full transaction details with date, amount, sender, and purpose
• Bank statements showing the credited amount
• A formal request letter explaining the purpose for needing the FIRC for an older transaction, such as audit, compliance, refund claims

FIRC is an essential document that officially verifies your export payments and ensures compliance with key regulatory frameworks, such as FEMA and RBI guidelines. More than just a compliance tool, it's your gateway to export incentives, tax exemptions, and GST refunds. Without it, you risk missing out on these benefits. That's why it's crucial for every exporter or service provider to have a clear understanding of what an FIRC is, how it works, and the various nuances involved in obtaining and using it.

If your business deals with cross-border payments, Xflow is the smart way to go. This international payment platform completely removes the stress out of your global transactions. With Xflow, there are no more long settlement delays or endless follow-ups for FIRAs. Xflow offers lightning-fast settlements within one business day, FX rate savings of up to 50%, and auto-generated FIRAs for every transaction, completely free of charge.

Moreover, by uploading your FIRC on Xflow’s FIRC calculator, you can instantly get a transparent breakdown of fees and FX rates. This further helps you uncover hidden charges and make smarter decisions with every transaction.

Sign up with Xflow now to remove the hassle out of your international payments!