Purpose codes for foreign payments

Your bank reports every foreign exchange payment into or out of India to RBI with a purpose code: a five-character code, a letter and four digits, that says what the money is for. RBI's current list came with A.P. (DIR Series) Circular No. 84 of 29 February 2012, and banks report under it through RBI's FETERS system.

You give the code to your bank in its request letter when you receive or send money. The bank uses it to report the transaction, so a wrong code gives RBI a wrong picture of your trade. If two codes seem to fit, ask your bank which one it will report before you send the money.

• Codes starting with P are for money coming into India, receipts, such as an export payment.
• Codes starting with S are for money going out, payments, such as paying a supplier abroad.
• The two digits after the letter are RBI's purpose group: 01 for goods, 02 for transport, 08 for computer and information services, 10 for other business services, and so on.
• Within a group, the last two digits pick the exact purpose: in group 01, P0102 and P0103 are two different kinds of export receipt.
• Many codes come in pairs: P1006 and S1006 are both business and management consultancy, one for money in and one for money out.

• P0102: realisation of export bills sent on collection (full invoice value), other than Nepal and Bhutan.
• P0103: advance receipts against export contracts, other than Nepal and Bhutan.
• S0101: advance payment against imports, other than Nepal and Bhutan.
• S0102: payment towards imports, settlement of invoice, other than Nepal and Bhutan.
• P0109 and S0109: exports to and imports from Nepal and Bhutan.
• P0108 and S0108: the export and import legs of a merchanting trade.
• P1505 and S1505: deemed exports and deemed imports, between SEZs, EPZs and the domestic tariff area.

• P0802 and S0802: software consultancy and implementation.
• P0807: off-site software exports; S0807: off-site software imports.
• P1006 and S1006: business and management consultancy and public relations.
• P1002 and S1002: trade-related services, commission on exports or imports. S1020 is commission agent services. Ask your bank which one fits your agent's contract.
• S0203 and S0204: freight on imports and freight on exports, shipping companies. S0209 and S0210 are the same for airline companies.
• P0602 and S0602: freight insurance on imports and exports of goods.
• P0701 and S0701: bank charges, collection charges and LC charges.

1. 1Decide the direction: money in (P) or money out (S).
2. 2Decide what it pays for: goods, a service, freight, insurance or a fee.
3. 3For goods, decide whether it is an advance or a settlement after shipment or import.
4. 4Search the code, read RBI's full description, and confirm it with your bank before the transfer.
5. 5Keep the code with your copy of the bank's request letter and the invoice, so your records match what the bank reported.

RBI discontinued two codes, P0105 and P0107, in 2016. If an old template still shows them, update it.