RBI to detail SOP for banks to help expedite rupee trade

Source: The post is based on the article “RBI to detail SOP for banks to help expedite rupee trade”  published in The Hindu on 18th July 2023

What is the News?

The Reserve Bank of India (RBI) is expected to issue a standard operating procedure for banks to expeditiously issue FIRC (Foreign Inward Remittance Certificate) and Electronic bank realization certificates(e-BRCs).

This is being done to overcome the problems faced by exporters with the rupee-based trading mechanism for foreign trade.

What is FIRC (Foreign Inward Remittance Certificate)?

Source: The Hindu

FIRC is a document that acts as a testimonial for all the inward remittances entering India. 

Most of the statutory authorities accept this document as proof that an individual or a business, such as a limited company, partnership firm, sole proprietorship firm and others, has received a payment in foreign currency from outside the country.

What is an Electronic Bank Realization Certificate(e-BRC)?

An Electronic Bank Realization Certificate(e-BRC) is a vital digital certificate for export businesses. 

A bank issues the e-BRC to confirm that the buyer made payment to the exporter against the export of services or goods.

Businesses availing export benefits under the Foreign Trade Policy (FTP) must produce a valid BRC. The BRC is the proof of realization of payment against exports.