An electronic Bank Realisation Certificate (eBRC) is an essential document for exporters that confirms payment from a foreign buyer. A bank issues it as evidence of the return of export revenues to the country and to ensure compliance with foreign exchange restrictions. On November 15, 2023, the Government of India's Directorate General of Foreign Trade (DGFT) implemented an improved eBRC system. This new approach is based on electronic inward remittance messages banks send directly to the DGFT. Exporters would self-certify their eBRCs based on the messages received. Let's explore the recent notification in detail and discuss how exporters in India can benefit from the eBRC system.
What is the Electronic Bank Realisation Certificate System?
The eBRC system was introduced in 2016 to simplify creating and submitting eBRCs. Exporters are accepting the system, and more than 90% of eBRCs are currently generated electronically. An Electronic Bank Realisation Certificate (eBRC) is a critical digital certificate for exporters. A bank provides it as verification that the exporter got payment from the importer for the commodities shipped. Exporters are required to register the value of the goods they intend to export.
After receiving all payments for a shipping bill, an exporter may request that their bank cancel the item in the EDPMS (Export Data Processing and Monitoring System) and issue an eBRC. Any company seeking benefits under the Foreign Trade Policy must present a valid BRC as proof of payment for shipments made.
India's Commerce Ministry to Soft Launch Updated eBRC for Exporters
On November 15, India's Ministry of Commerce launched a pilot program for the improved Electronic Bank Realisation Certificate (eBRC), which enables exporters in India to self-certify. The move is intended to make it easier for dealers to conduct business. The eBRC is an essential document for exporters since it serves as a bank confirmation that the exporter has received money from a foreign buyer to export goods or services.
The new method will be based on electronic Inward Remittance Messages (IRM) delivered directly from banks to the Directorate General of Foreign Trade (DGFT). Exporters must self-certify their eBRCs based on the IRMs obtained. See the DGFT's official announcement.
According to the Directorate General of Foreign Trade (DGFT), the enhanced system is based on electronic inward remittance communications that banks will provide directly to the DGFT.
"The enhanced eBRC system shall enable exporters to reduce transaction time and costs. It would also ease the burden on bankers by simplifying the reconciliation of IRMs with shipping bills, SOFTEX, invoices, etc., and promote ease of doing business in general," the notice stated
Why do exporters need eBRC?
In a nutshell, an eBRC is proof of export. To properly comprehend it, however, one must first understand its purpose. An eBRC is required for an exporter to take advantage of the numerous export incentives (duty exemptions, subsidies, low-cost loans, and so on) provided by the government as part of its Foreign Trade Policy (FTP). India's Directorate General of Foreign Trade (DGFT) formulates and implements the FTP and many export incentives it promotes.
The DGFT also uses the eBRC technology, which allows banks to electronically input all foreign exchange realisation-related information relating to exports to the DGFT server. This data is transmitted via a digital certificate known as the eBRC.The DGFT formulates and implements the FTP and many export incentives it highlights in India.
The DGFT also uses the eBRC technology, which allows banks to electronically input all foreign exchange realization-related information relating to exports to the DGFT server. A digital certificate, such as eBRC, sends this information.
The upgraded eBRC system offers several benefits to exporters, including:
- Reduced transaction time and costs: The new system is expected to reduce transaction time and costs for exporters by up to 50%.
- Simplified reconciliation: The new system will simplify reconciling inward remittance messages with shipping bills, SOFTEX, and invoices. It will ease the burden on exporters in India and their banks.
- Improved ease of doing business: The new system is expected to promote ease of doing business in general by making it easier and faster for exporters to comply with foreign exchange regulations.
Furthermore, the upgraded eBRC system is expected to reduce transaction time and costs for exporters by up to 50%. It will also ease the burden on bankers by simplifying the reconciliation of inward remittance messages with shipping bills, SOFTEX, and invoices. The new system is also expected to promote ease of doing business in general.
New Features of Electronic Bank Realisation Certificate
The upgraded eBRC system builds on the success of the existing system and introduces several new features, including:
- Self-certification by exporters: Under the new system, exporters can self-certify their eBRCs based on their banks' electronic inward remittance messages. It will eliminate banks' need for manual intervention and reduce the time it takes to generate and submit eBRCs.
- Integration with other systems: The new eBRC system is integrated with the DGFT's other export-related systems, such as the Shipping Bill and SOFTEX systems. It will make it easier for exporters in India to generate eBRCs and ensure that all of the required information is complete and accurate.
- Real-time reporting: The new eBRC system provides real-time reporting to the DGFT on the status of eBRCs. It will help the DGFT track the exports' progress and identify any potential problems.
Benefits of the Upgraded eBRC System
Enhanced security: To preserve the integrity and confidentiality of eBRCs, the new system will include improved security components such as digital signatures and encryption. It will aid in the prevention of certificate fraud and misuse.
Integrated with other trade systems: To further simplify and speed the export process, the new eBRC system will be combined with other trade systems such as Shipping Bills and SOFTEX forms.
Conclusion
The upgraded eBRC system is a welcome development for exporters. It is expected to reduce transaction time and costs, simplify reconciliation, and promote ease of doing business in general. Exporters should take advantage of the new system and start self-certifying their eBRCs at the earliest. So that was all for the Electronic Bank Realisation System. An electronic bank realization certificate is a significant source of financial information and an economic indicator, in addition to helping exporters claim export incentives under the FTP and GST refunds on service exports. Suppose you want to learn more, have questions regarding eBRC, or need an updated list of Exporters in India. In that case, you can reach out to our dedicated experts at Eximpedia. app and book a free live demo in minutes.
