What changed
RBI issued a clarification in response to member bank queries on issuance of FIRC for inward remittances to NRE accounts received through RTGS, NEFT, NECS, and ECS. The clarification states that FIRC should not be issued against remittance for credit to NRE account, and that FIRC is to be issued by the bank that receives the proceeds in foreign exchange and converts foreign currency into rupees.
What it means for you
Banks must not issue FIRC for NRE account credits through these channels, reducing paperwork and compliance burden. Only the bank that receives the proceeds in foreign exchange and converts foreign currency to rupees is responsible for issuing FIRC, ensuring clarity in remittance processing.
What you must do
- Update internal procedures to ensure FIRC is not issued for NRE account credits via RTGS, NEFT, NECS, or ECS.
- Train staff handling inward remittances on the correct FIRC issuance rules, especially for NRE accounts.
- Ensure that FIRC is issued only by the bank that receives the proceeds in foreign exchange and converts foreign currency into rupees.
Who it affects
Banks participating in RTGS, NEFT, NECS, or ECS, Remittance processing teams
When should a bank issue FIRC for inward remittances?
FIRC should be issued by the bank that receives the proceeds in foreign exchange and converts foreign currency into rupees. For NRE account credits via electronic systems, no FIRC is required.
Does this circular apply to all electronic credit systems?
Yes, it applies to RTGS, NEFT, NECS, and ECS as mentioned in the circular.