Forex & International Banking

Foreign exchange, trade finance, export/import, and NRI banking.

Forex Trade Finance Export Import NRI Banking FEMA

Articles

Forex Liberalised Remittance Scheme (LRS): A Practical Guide

Understand how much money resident individuals can remit abroad each year under RBI's LRS, what it can be used for, and what banks check before releasing funds.

04 Sep 2026 · 2 min read Trade Finance MT 734 Explained: Advice of Refusal

How a bank formally refuses to honour documents presented under a Letter of Credit, and lists exactly why.

04 Sep 2026 · 2 min read Trade Finance MT 730 Explained: Acknowledgement (Documentary Credit)

How banks confirm receipt of a Letter of Credit message and report their own handling charges.

03 Sep 2026 · 2 min read Trade Finance MT 710 Explained: Advice of a Third Bank's Documentary Credit

What happens when an advising bank has to pass on a Letter of Credit it received through a channel other than SWIFT.

02 Sep 2026 · 2 min read Trade Finance MT 707 Explained: Amendment to a Documentary Credit

How changes to an already-issued Letter of Credit — a new expiry, a revised amount, added conditions — get communicated.

01 Sep 2026 · 2 min read Trade Finance MT 705 Explained: Pre-Advice of a Documentary Credit

Why an issuing bank sends a short heads-up before the full Letter of Credit follows as an MT 700.

31 Aug 2026 · 2 min read Trade Finance MT 420 Explained: Tracer (Collections)

The chaser message a remitting bank sends when it has not heard back on the status of a collection.

30 Aug 2026 · 2 min read Trade Finance MT 416 Explained: Advice of Non-Payment/Non-Acceptance

The SWIFT alert sent when a drawee refuses to pay or accept a draft under a documentary or clean collection.

29 Aug 2026 · 2 min read Trade Finance MT 410 Explained: Acknowledgement (Collections)

How the collecting bank confirms it has received the documents sent under a collection instruction.

28 Aug 2026 · 2 min read

Frequently Asked Questions

Yes. The LRS ceiling is an annual limit tied to the financial year (April–March) and resets at the start of each new financial year.

A mismatch is called a "discrepancy." The issuing bank can refuse payment until the discrepancy is corrected or the buyer waives it, so exporters should check documents carefully before presentation.

No. NRE accounts are meant for foreign income only. Income earned in India, such as rent or salary, should go into an NRO account.

Yes, IEC registration itself does not expire, though DGFT has introduced a requirement to periodically confirm/update IEC details online to keep it active.

A business generally needs a valid IEC to import commercially. Beyond that, some goods are freely importable while others need a specific licence or are subject to restrictions under the current Foreign Trade Policy.

Yes — FEMA governs all cross-border foreign exchange transactions by residents and non-residents in India, though many routine transactions are freely permitted within prescribed limits and reporting requirements.

Each resident individual, including minors (through a guardian), has their own separate LRS limit, so family members can each remit up to their individual ceiling.

No. An LC is a primary payment mechanism used to settle a trade, while a Bank Guarantee is a secondary commitment that is only invoked if the applicant fails to perform an obligation.

Not completely — NRIs can repatriate funds from an NRO account up to a specified limit per financial year, subject to applicable tax compliance and RBI/FEMA conditions.

Both refund embedded costs on exports, but they cover different components — drawback traditionally refunds customs duties on inputs, while RoDTEP was introduced to cover a broader range of previously non-refunded taxes and levies. Check current DGFT notifications for exact scope and rates.

HSN (Harmonized System of Nomenclature) is the international classification code for goods, and it determines the applicable customs duty rate and any product-specific regulatory requirements — accurate classification is essential to avoid clearance delays or penalties.

FEMA, enacted in 1999, replaced the older Foreign Exchange Regulation Act (FERA). The shift moved India's foreign exchange framework from a criminal-law-oriented, restrictive regime toward a civil, management-oriented approach aligned with economic liberalisation.