Skydo makes compliance easy with free and automated FIRA and assisted eBRC closure.

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Once your EGM is filed, Skydo helps you manage payment tracking and compliance closure seamlessly

What Is an Export General Manifest (EGM) in Customs?

An EGM in customs is a document that carriers like shipping lines, airlines or an authorised agent file with the Indian customs to confirm an exporter’s goods have physically left India.&nbsp;

An EGM includes the shipping bill reference number, number of containers or packages loaded, weight, port code, destination, etc. Hence, an EGM acts as proof of export for customs and without proper filing, your shipment entry might remain incomplete on ICEGATE.

A proper EGM ICEGATE filing is important for the following reasons:&nbsp;

An EGM ICEGATE filing is the responsibility of the carrier line and not of the exporter.&nbsp;

Before your goods are exported to another country, the responsible airline, shipping line or an authorised agent, as per the transport mode, fills this document on the ICEGATE portal.&nbsp;

However, you must note that carriers must file it within a specified timeframe. After getting the LEO for the exported goods, a shipping line or its agents must file the EGM within 7 days of the departure of a vessel from the port of loading. If you are exporting goods through air, the responsible airline or its Ground Handling Agent (GHA) must file the EGM within 24 hours of aircraft departure.&nbsp;

While the carrier lines or their agents handle the EGM filing, as an exporter, you must match their documentation accuracy to avoid any potential delays. For this, match the <a href="https://www.skydo.com/blog/how-to-download-shipping-bill-from-icegate">ICEGATE shipping bill</a> details with entries made by the carrier of your goods for export.&nbsp;

While the carrier line completes the EGM ICEGATE filing, you must also have an idea about what it includes. For this, know the 4 types of forms associated with EGM filing and their contents:

What Is the Difference Between EGM and IGM?

As an exporter, as you get familiar with the EGM ICEGATE filing process, you may also come across the term the Import General Manifest or IGM. To avert confusion, refer to the following table for their differences:

How to File EGM on ICEGATE: A Step-by-Step Guide

To ensure a proper EGM ICEGATE filing, a collaborative approach between you (the exporter) and your carrier is important. While it is your carrier’s responsibility to file an EGM, your proactive involvement can ensure that it is properly filed.&nbsp;

Here’s how the process typically unfolds:

Step 1: Prerequisites and Shipment Coordination

As your cargo gets ready to align, share your shipping bill details, invoice value, specifications of the packages, etc., with your carrier. An ICEGATE registration is typically required for full tracking access, but you may check the basic EGM status with the acknowledgement number that ICEGATE generates.&nbsp;

Step 2: Customs Clearance with LEO Issuance

Upon inspection, once the Indian customs issues the LEO and hands over your cargo, your carrier generates a provisional manifest, cross-referencing your shipping bill against the loaded items.&nbsp;

Step 3: Carrier EGM Filing and Validation

Your carrier logs in to the ICEGATE portal with their digital signature certificate. They upload a digital EGM copy in XML format. It gets automatched against your shipping bill in the Indian Customs EDI System (ICES).&nbsp;

Step 4: EGM Tracking and Validation

After 1–3 days, check the ICEGATE portal to confirm your EGM is validated. A matched EGM is essential for IGST refunds, duty drawback, and customs-linked export benefits. It also supports eBRC processing and export compliance.&nbsp;

Step 5:&nbsp; Refunds, Claims and Export Closure

As you have a validated EGM copy in your hand, file for your GST refund on the GST portal under Export of Goods/Services. You may link it to your GSTR-1 return for an automatic reconciliation. Banks utilise it to release Letter of Credit (LC) payment and DGFT for <a href="https://www.skydo.com/blog/rodtep-scheme-rates-notifications-and-benefits">RoDTEP </a>claims.&nbsp;

Here are the steps to follow an EGM filing afterwards:&nbsp;

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Don’t let EGM errors delay your refunds and strain cash flow. As you track export compliance, <a href="https://www.skydo.com/?utm_source=google&amp;utm_campaign=Skydo_Phrase_Nov22&amp;utm_medium=ad&amp;utm_content=Skydo_Phrase_Nov22&amp;utm_term=skydo&amp;gad_source=1&amp;gad_campaignid=21929473575&amp;gbraid=0AAAAA9be3yiWPbIBL8u_v7bF-M31Pgty0&amp;gclid=CjwKCAjwnN3OBhA8EiwAfpTYeuW-4vRN-Uy8mjZZynE2yZLTZgjv7SqL5FHDMgq66edtlqnkp05lxhoCbzkQAvD_BwE">Skydo</a> helps you track export payments smoothly with instant FIRA support.

EGM vs Shipping Bill: Differences and Similarities

While both EGM ICEGATE filing and shipping bills are integral to the export process, they operate at different stages and serve distinct compliance purposes. Understanding how they complement each other helps avoid delays in export closure and benefit claims:

What are Common EGM Errors and How to Fix Them?&nbsp;

Even if you are a seasoned exporter, you must note some common EGM issues that still may happen and tackle them:

How Can Skydo Help After Your EGM Is Filed?

Just as exporters track EGM status to avoid shipment uncertainty, payment tracking also matters. With Skydo, you can track your export payments clearly at every stage, so you always know where your money is.&nbsp;

Streamline your international payments from exports with Skydo. Get your account within 5 minutes at no forex margin today!

You’ve closed a deal with an overseas client. The invoice is raised. Now your bank asks for an IEC (Importer-Exporter Code), and your accountant mentions SOFTEX (Software Export Declaration). Every search about DGFT leads to pages filled with government jargon that feels suitable for goods exporters, but not service businesses.

Most exporters slow down here, as the process isn’t explained clearly anywhere. This guide closes that gap, explaining DGFT in a comprehensive way that service exporters would find contextual. Check out how it fits into your workflow, key aspects that matter, and areas where mistakes commonly happen.&nbsp;

DGFT stands for Directorate General of Foreign Trade. It works under the Ministry of Commerce and Industry and oversees the regulation of exports and imports in India. It is responsible for setting the rules and providing the systems exporters use to operate legally.

Today, DGFT is used not just for large exporters. Many service exporters assume DGFT is only for physical goods. That is not true. If you are earning in foreign currency, you are already part of the DGFT ecosystem. You are still part of the same system even if you are:

DGFT is responsible for issuing the registration, documentation, and approvals needed to export and receive foreign payments properly.

What is the Role of DGFT in Export &amp; Import?

DGFT is the starting point for all export businesses. This is where you create your export identity before proceeding to payments, <a href="https://www.skydo.com/blog/guide-for-tech-exporters-on-global-compliance">compliance filings</a>, and incentives.

Businesses must understand the different roles of DGFT in export and import comprehensively, as explained below.

DGFT implements the Foreign Trade Policy of India. The current cycle is FTP 2023.

You may not deal with the policy in your daily operations, but it defines the rules that apply to your exports.

This is the most important function of DGFT. A DGFT IEC is a 10-digit code linked to your PAN. Without it:

For instance, a freelancer in Bengaluru invoices a US client for $3,000. Without IEC, the bank may hold the payment or ask for additional documentation before releasing funds. That is why IEC is always the first step.

DGFT is also responsible for managing the HS code system, also known as ITC-HS.

Even for service exporters, classification is important. For instance, an IT consulting firm may use a service accounting code integrated with software or consulting exports. If the classification is wrong, it may experience reporting mismatches later during compliance checks.

Not all exports are “free”, as some require approvals. This is where different types of DGFT licenses come in. Some of these are:

Most service exporters may not require these in regular operations. However, they are necessary when dealing with restricted items or certain export schemes.

DGFT is also used to manage export-related schemes, such as the <a href="https://www.skydo.com/blog/export-promotion-schemes">RoDTEP</a> (Remission of Duties and Taxes on Exported Products), which is meant for exporters of goods. Earlier, service incentives such as SEIS (Service Exports from India Scheme) were also administered by DGFT.

DGFT also oversees certain export approvals and types of licenses, like Advance Authorization and EPCG (Export Promotion Capital Goods), along with controls for restricted categories under frameworks like SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies).

Many schemes today have been formulated for goods. However, an update in policy may still affect service exporters, particularly considering compliance and reporting.

Besides acting as a regulator, DGFT also provides systems and services that exporters use regularly.&nbsp;

The main platform is dgft.gov.in, where you can:

Everything is digital now. There is no need for physical visits in most cases.

DGFT maintains a connection with banks. It tracks export payments through eBRC, or the electronic Bank Realisation Certificate.

For instance, your client sends $5,000, and the receipt is confirmed by your bank. This transaction gets recorded and is linked to your export data. Considering compliance and incentives, this role is crucial.

The DGFT COO validates the place where your goods or services come from. This feature comes in handy for goods exporters. However, if you export services, you may still find this in some contracts or compliance cases.

For instance, a business exporting software bundled with hardware may require the COO to confirm the place of origin of the physical component.

The Niryat Bandhu Scheme has been launched for free mentoring and handholding for new or small exporters. Particularly, this helps new exporters by providing them with training sessions and basic guidance, besides cultivating export awareness. So, if you’re just starting and need methodical support, DGFT can prove handy.

In case something goes wrong, businesses can turn to the DGFT portal for online grievance submission. It also provides regional support at offices. This helps exporters resolve issues like:

Now, exporters must try to avoid the common errors while dealing with DGFT.

Common DGFT Mistakes Exporters Make and How to Avoid Them

In most cases, businesses encounter export issues due to small mistakes that usually go unnoticed early. Have a look at the common errors that you must avoid.

The correct <a href="https://www.skydo.com/blog/rbi_purpose_code_for_inward_remittance">purpose code</a> has to be used when you receive payments. In case the purpose code is wrong, the records with the bank won’t match the trade DGFT data. Moreover, eBRC may not generate properly.

So, if a SaaS company chooses the wrong purpose code for a subscription payment, the bank will process it, but there might be a mismatch in reporting. This can amount to issues later on.

Sometimes, exporters forget to update the IEC annually. It may get deactivated, eventually blocking export transactions.

When there’s a mismatch between the invoice value, amount received, or reported value of exports, your compliance filings may be delayed.&nbsp;

For instance, you raise an invoice of $10,000 but after deductions, you receive $9,800. These reporting issues might show up if the records are not aligned.

In case an exporter uses the wrong DGFT HS code or service classification, it can lead to errors during reporting or compliance delays.

For service exporters, it’s important to select the correct SAC (Service Accounting Code) based on what they offer. For example, IT services, software development, or consulting services fall under the 998313 code. If there’s a mismatch between the classification and the nature of the service, it might create issues in eBRC, RBI reporting, or export documentation.

Now, check out the common mistakes businesses make while using these codes, and understand how you can fix them.

The Role of Digital Signature Certificates (DSC) in DGFT

As all the processes associated with DGFT are fully digital, exporters need a Class 3 Digital Signature Certificate. A DSC is a digital identity that is used to sign applications and submit documents online.

The purpose of DGFT is to verify the authenticity of information and prevent misuse of data. It streamlines paperless processing for exporters. Unless businesses obtain the DSC, they cannot complete IEC applications, place any request for a license, or make any kind of modifications.

You can obtain a DSC from certified providers like eMudhra, Sify, and nCode. For DGFT filings, a Class 3 Digital Signature Certificate is required. It ensures secure and authenticated submissions. The DSC usually remains valid for 2-3 years. The cost of a Class 3 DSC in India typically ranges from ₹1,000 to ₹3,500. The exact cost depends on validity, provider, and whether a USB token is included.

A DSC is necessary for service exporters, too. So, even if you are a freelancer or running a small agency, you would need it if you are handling the filings yourself.

For instance, a freelancer applying for IEC or filing eBRC independently needs to use DSC to submit the application and verify it.

By now, you have understood how IEC, purpose codes, and compliance help in receiving your export payments seamlessly. Once you complete your DGFT setup, the next challenge lies in handling payments without delays, hidden charges, or constantly following up with your bank. Platforms like <a href="https://www.skydo.com/">Skydo</a> can help exporters in these situations.&nbsp;

How Does Skydo Help After Your DGFT Compliance Is Sorted?

DGFT may help exporters get started, but it won’t handle your payment flow. A platform like Skydo can help you manage your incoming payments and documentation efficiently. It offers the following features.

Think of it this way: DGFT gives you the ability to export. Then, <a href="https://www.skydo.com/">Skydo</a> helps you receive and manage the money that comes in.

Third-party payments need careful documentation. Skydo issues FIRA on every payment for clean RBI reporting.

Are you receiving a third party export payment and concerned if you’re compliant with the RBI rules? Or whether a tripartite agreement is mandatory for such payments?

This blog will help you figure that out as it covers the RBI guidelines, documentation, process, and common mistakes exporters make.

What is third party payment in export transactions

A third party payment in exports happens when the payment comes from someone other than the buyer.

This might sound confusing to you, but in international business, it is a common mode of trade payment. Trade payment means any payment you receive in exchange for goods or services sold abroad.

In most cases, a third party is a parent company paying for its smaller branch, group entity, or a buying agent who settles bills for their clients.

Practical example: An Indian IT firm finished a $50,000 software project for a new US-based startup. They sent the client an invoice, but the payment came from a large parent company in the UK.

How is third party payment different from third party export

Third party payment and third party export sound similar, but they’re not the same.

Third party payment: You ship the goods to an international buyer, but the payment comes from someone else who is not involved in the transaction

Third party export: You ship to a country other than the buyer’s, but the buyer makes the payment. For example: the buyer is in Germany, you export your goods to Spain, but the buyer still pays for it.

Here’s a table comparing third party export payments vs third party export

What are the RBI guidelines for third party export payments

Every third party export payment in India must fulfill these RBI regulatory norms to avoid severe penalties. Remember and save this list somewhere, so you can refer to it the next time you accept such a payment.

A tripartite agreement in simple terms means a three-way contract. It is a formal written agreement signed by you (the exporter), your buyer, and the third party who will send the money to your Indian bank account.

<a href="https://www.fatf-gafi.org/en/home.html">FATF</a> stands for the Financial Action Task Force. The FATF is a global organization that continuously monitors illegal activities like terrorist financing and money laundering, and sets standards to mitigate them.

Authorized Banking Channels and EDF Declaration

An<a href="https://www.skydo.com/blog/export-declaration-form"> Export Declaration Form (EDF)</a> is an official government form where you declare what you are selling, the value of the goods, and how you will be paid.

Besides the FATF-blacklisted countries, the RBI advises banks to be vigilant about third party export payments in the following ways:

What documents are required for third party export payments

This document list is what you need to ensure your trade is compliant, and the bank releases the payment on time:

How to receive third party payments in five steps

These are five simple tips that will save you from back and forth and keep everyone on the same page:

Step 1: Agree on trade payment terms with all parties

Even before you ship the goods, confirm the payment details. Ask: Which company will make the payment, and where is it located? Also decide the payment method: bank transfer (T/T), Letter of Credit (LC), or some other international payment method.

Step 2: Draft and execute the tripartite agreement

The next step is to execute the tripartite agreement in writing. It must include the names, addresses, and specific roles of all three parties. Get the agreement signed by the authorized representatives of all the parties.

Step 3: File shipping bill with third party declaration

When you file the shipping bill, mention the third party payer’s full name, their country, and a brief note explaining their relationship to the buyer. The customs department might flag this information and verify with your AD bank when the payment reaches India.

Step 4: Submit documents to authorized dealer bank

After shipping the goods, submit the commercial invoice, a copy of the shipping bill, and the tripartite agreement to your AD bank. The bank will run a FATF-compliance and Know Your Customer (KYC) check to ensure the money is coming from a legitimate source. Respond quickly if your bank asks for extra proof or email trails

The last step is when you receive the SWIFT transfer in your bank account. The bank issues a<a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide"> Foreign Inward Remittance Certificate (FIRC)</a>, which is the official proof you need for GST refunds.

Then, the bank generates an<a href="https://www.skydo.com/blog/what-is-e-brc"> Electronic Bank Realization Certificate (e-BRC)</a> to close your export record on the DGFT portal.

How third party payments affect FIRC and GST refunds

Do third-party export payments affect FIRC and GST refunds? This is a common confusion for exporters.

An FIRC remains unaffected for third-party payments as long as it complies with the RBI norms.

Receiving money from a third party does not disqualify you from getting IGST and ITC refunds if your documentation is perfect.

The most-common error is when the name on the FIRC doesn’t match the buyer’s name on the invoice. The GST department might raise queries if that happens.

Keep your tripartite agreement handy to resolve such queries.

What are common mistakes exporters make with third party payments

Watch out for these common mistakes that can delay payments or get you involved in compliance hassles

How Skydo simplifies third party export payments

Third party export payments have a lot of moving pieces: tight documentation, multiple compliance norms, and FIRC follow-ups with banks. The best way to manage this is by using modern payment platforms like <a href="https://www.skydo.com">Skydo</a>.

Virtual accounts in multiple currencies: Get third party payments from companies in the US, UK, EU, Singapore, Australia, and Canada without opening foreign bank accounts. No SWIFT fee or intermediary bank charges are involved.

Automated compliance documentation: Skydo assists you at every step of the third-party payment documentation process so you miss nothing.

Free FIRC generation Every payment you receive comes with a FIRC. No extra charges, no follow-up calls, and GST refund-ready.

Transparent flat fees: With Skydo, you always know how many fees you are paying. No hidden FX markups.

Real-time payment tracking: You get real-time notifications as payments move through different stages. No more chasing banks for status updates or asking clients for<a href="https://www.skydo.com/blog/mt103-what-is-it-why-it-matters-and-how-to-get-one"> MT103</a>.

You close your cash books for the month, relieved that the numbers look correct. But when the bank statement arrives, things do not add up. Sounds familiar?

This mismatch, which is pretty common, shows up because your books and your bank did not record the transactions at the same time, or in the same way. That’s the reason businesses need to prepare a bank reconciliation statement (BRS).

This guide explains the correct bank reconciliation statement format and how to deal with challenges when you deal with cross-border payments.

A bank reconciliation statement is a document through which you can identify the differences between the balance recorded in your cash book or accounting records and the balance that your bank passbook shows on a given date. It happens because the transactions do not appear at the same time in both records.

For instance, you issue a cheque today and get it recorded in your books. The bank is likely to update the balance only when the cheque is cleared. Both the balances will differ until that happens. In a bank reconciliation statement, all these differences are listed. This helps you understand how the bank statement arrives at the final balance.

Businesses must understand that this reconciliation statement is not a formal financial statement. Instead, it’s an internal control tool that is usually prepared monthly or at the end of the period. However, you may also get it done daily or weekly if you run a high-volume business.

Why is a Bank Reconciliation Statement Prepared?

As a business, you may assume that your bank balance always remains accurate. However, many organizations end up making risky decisions as they continue to rely on a single source.

The main reasons why a bank reconciliation statement is prepared have been presented below:

There’s always a chance for errors to creep into your cash books as a result of incorrect entries. Even processing issues can result in incorrect entries in bank statements.

At times, there are certain transactions that are showing up in your bank statements, but they do not appear in your books. These usually include bank charges, interest credits, and customer deposits.

You may also notice unexpected entries in your bank statements. These include unauthorized withdrawals and duplicate payments. A bank reconciliation statement helps to identify these issues.

Often, your cash books may show more money than you actually have. In these situations, you may be approving payments that cannot be cleared or delaying payments to your vendors unnecessarily. With accurate reconciliation, you would be making your decisions based on the availability of real cash.

It takes time to track some transactions. These include cheques issued but not yet presented, and deposits made close to the month-end. Through reconciliation, you can track these pending items.

Auditors largely rely on bank reconciliation statements to verify whether your financial records are accurate. They also get a clear picture of the completeness of your transactions. A comprehensive reconciliation statement serves as an audit trail.

In case you’re dealing with global clients, mismatches in bank statements can be more complex. For instance, a company invoices $4,000 at ₹83 per dollar. In this case, the expected amount would be ₹3,32,000.

However, the bank credits the funds, considering the dollar value to be ₹82. It also deducts ₹3,000 as fees. The actual amount received would be ₹3,25,000, creating a difference of ₹7,000. Unless you have a well-prepared bank reconciliation statement, this difference would be unclear.

Now, check out the process of preparing a bank reconciliation statement.

How to Prepare a Bank Reconciliation Statement?

Businesses must have a clear idea of the bank reconciliation statement rules to prepare these statements.

First, collect your cash book or general ledger that contains relevant records. Also, get the bank statement for the same period. In case there’s a difference in time periods, you can identify the false mismatches.

Now, you need to compare each entry in your books with that in your bank statement. Look at the amount in the transactions, date, and the reference number. Mark the entries that appear in both the records, as they are already reconciled.

Next, shortlist the entries that appear only in one record. Usually, they come under two categories.&nbsp;

These include cheques that have been issued but still have not been cleared, and deposits that have not yet been credited.

These numbers usually include charges deducted by the bank, interest credited, and direct transfers.

Now that you know the mismatches, group them into differences in timing, missing entries, and errors. This would make your next step easier.&nbsp;

Start with the balance based on your cash book. Then, add the transactions that have been recorded by the bank but not by you. Deduct the transactions that you recorded, but the bank has yet to process. The figure you adjusted must match the bank balance.

Now, check whether the final balances match and whether the documents support all the entries. As per your financial records, save the statement. Some of the common categories of mismatch include:

Note: A few extra steps are required for foreign transactions.

What is the Format of a Bank Reconciliation Statement?

A reconciliation statement starts with one balance and uses reconciling items to adjust it until it matches the other balance. Here’s the standard bank reconciliation statement format:

Businesses must understand how these adjustments work in real scenarios before they apply the process. The examples below demonstrate how mismatches usually appear and how reconciliation helps to resolve them.

Reconciling local transactions is manageable. However, when international payments involve exchange rate changes, hidden deductions, and delayed confirmations, the process becomes challenging to manage. Particularly, if there are multiple such transactions that involve different currencies in a single day, the process gets complicated over time.

If you’re tired of chasing SWIFT copies and manually calculating forex differences, check out how <a href="https://www.skydo.com/blog/minimise-tds-foreign-payments">Skydo</a> gives you clear transaction records and payment visibility in real time.

What Are the Challenges in Preparing Bank Reconciliation Statements?

Although the process is methodical, it’s hard to find real-world reconciliations. Businesses usually encounter the following challenges while preparing their bank reconciliation statements.

As the volume of transactions increases, manual reconciliation becomes time-consuming. Errors start showing up too often. For instance, it might take several hours to match 300 transactions manually.

It might take some time for transactions recorded at the end of a period to reflect. For instance, payments that you received at the end of the month or deposits credited after a delay may create temporary mismatches.

Sometimes, banks deduct maintenance fees and transfer charges. These are often not recorded in your books. You realize them only during reconciliation.

In cross-border payments, there might be a difference between the invoice rate and the credit rate. Mismatches can be seen even in correct payments.

Often, multiple banks are involved in international transfers. Each bank may deduct a fee, which lowers the credited amount. Also, businesses experience a lack of clarity on deductions.

Due to delays in SWIFT transfers, global transactions may take 2-5 working days. This also leads to mismatches in different accounting periods.

Your bank may not provide a detailed breakdown of the cross-border transfer fee and real-time updates. This makes it difficult to prepare reconciliations.

When international payments are involved, there’s no denying that handling reconciliation manually becomes a challenge. Skydo comes to your rescue, improving visibility and reducing unnecessary variables. Here are the key benefits businesses derive from Skydo:

Simplify your international payment reconciliation with <a href="https://www.skydo.com">Skydo</a> today.

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For inward payments, Skydo auto-tags the right purpose code, so you never get stuck on a compliance review.

Before you send money abroad, you need to select the correct RBI purpose code for outward remittance. This is crucial for complying with the guidelines of the Reserve Bank of India. Choosing the wrong purpose code for outward remittance can lead to transaction issues.

Have a look at the complete purpose code list for outward remittance and how to choose the right purpose code for outward remittance.

What is a Purpose Code for Outward Remittance?

A purpose code for outward remittance is a unique alphanumeric code provided by the RBI to indicate the reason behind a foreign exchange transaction sent from India. It helps the RBI track foreign exchange outflows from India systematically.

It also helps in compiling the Balance of Payments (BoP) statistics accurately, which are critical indicators of the country’s economic transactions with foreign countries.

Why Does RBI Require Purpose Codes for Foreign Payments?

The RBI requires the purpose code for foreign outward remittance to ensure every transfer adheres to the regulations of the <a href="https://www.skydo.com/blog/fema-vs-fcra">Foreign Exchange Management Act</a> (FEMA), 1999. Here are the other reasons why these codes are important:

Overall, purpose codes play a critical role in ensuring that foreign transactions remain traceable, compliant and well-regulated. This becomes even more relevant as outward remittances continue to grow in scale.&nbsp;

How are Purpose Codes for Outward Remittance Structured?

The purpose codes of RBI are designed in a manner such that a letter prefix is provided, which indicates the type of transaction. Additionally, a 4-digit number is provided, which indicates the type of transaction. Have a look at the table below for a better understanding:

The purpose codes of outward remittance are categorised into two types:

Capital account codes represent daily transactions and payments. For individuals, these include education, travel, medical treatment, and gifts. In terms of businesses, these are payments for imports and services.

This type of transaction represents investment and financing. This includes investing in international property, stocks or repaying loans.

Complete List of RBI Purpose Codes for Outward Remittance

Since the RBI has an extensive list of purpose codes, they are divided into four categories here. Have a look at the complete list of purpose codes for outward remittance used for business purposes:

How to Select the Correct Purpose Code for Your Transaction?

Have a look at the step-by-step process below to select the correct purpose code for your transaction:

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