What Is AD CODE Registration?
The AD Code registration on ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange Gateway) is a process through which Authorized Dealer (AD) banks in India are registered with the customs department for facilitating international trade transactions. AD Code stands for Authorized Dealer Code, which is a unique code assigned to banks by the Reserve Bank of India (RBI) to conduct foreign exchange transactions.
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Why AD CODE Is Required?
Foreign Exchange Transactions: AD codes are essential for banks authorized by the Reserve Bank of India (RBI) to deal in foreign exchange transactions. These transactions include remittances, payments for imports, receipts from exports, and other cross-border financial activities.
Customs Clearance: AD codes are used in customs declarations, such as the Bill of Entry (import declaration) and Shipping Bill (export declaration), to specify the authorized bank through which foreign exchange transactions related to imports and exports will be conducted. Customs authorities verify the AD code to ensure compliance with foreign exchange regulations.
Exchange Control Regulations: AD codes help enforce exchange control regulations and monitor cross-border transactions. The RBI regulates foreign exchange transactions in India to maintain stability in the foreign exchange market, prevent illegal activities such as money laundering and terrorism financing, and ensure compliance with international standards.
Documentary Requirements: Many regulatory authorities, including customs departments, require importers and exporters to provide the AD code of their authorized bank when submitting documents for customs clearance. The AD code serves as proof of the bank’s authorization to handle foreign exchange transactions on behalf of its customers.
Taxation and Reporting: AD codes facilitate taxation and reporting of foreign exchange transactions by providing a standardized identifier for banks involved in international trade. It helps tax authorities and regulatory bodies track and monitor cross-border transactions for regulatory compliance, taxation purposes, and economic analysis.
Transparency and Accountability: AD codes contribute to transparency and accountability in international trade transactions by establishing a clear and standardized process for identifying the banks responsible for handling foreign exchange transactions. This helps ensure traceability and accountability in the movement of funds across borders.
How To Register for AD Code?
Eligibility Check: Ensure that you meet the eligibility criteria for ICEDGATE registration. Typically, importers, exporters, and customs brokers engaged in international trade activities are eligible to register.
Authorized Signatory: Identify an authorized signatory within your organization who will be responsible for completing the registration process and interacting with the customs authorities on behalf of your company.
Digital Signature Certificate (DSC): Obtain a Class 3 Digital Signature Certificate (DSC) from a licensed Certifying Authority (CA) in India. The DSC is required for secure online authentication and digital signing of electronic documents submitted on ICEDGATE.
Visit the ICEDGATE Portal: Access the ICEDGATE portal through the official website of the Indian Customs (https://www.icegate.gov.in/). Click on the “Register” or “New User Registration” link to initiate the registration process.
Fill Registration Form: Complete the registration form provided on the ICEDGATE portal with accurate details about your organization, including name, address, contact information, and business particulars. Ensure that the information provided matches the details mentioned in your DSC.
Upload Documents: Upload scanned copies of supporting documents required for registration, such as:
- PAN Card
- GST Registration Certificate (if applicable)
- Importer Exporter Code (IEC) Certificate
- Bank Account Details
- Digital Signature Certificate (DSC)
- Letter of Authorization (LOA) from the authorized signatory
Verify Information: Review the information entered in the registration form and uploaded documents for accuracy and completeness. Make any necessary corrections or additions before proceeding.
Submit Registration: After verifying the details, submit the registration form along with the required documents through the ICEDGATE portal. Upon successful submission, you will receive a unique registration reference number.
Approval Process: The Indian Customs authorities will review your registration application and documents. Once the verification process is complete, you will receive an approval notification via email or SMS.
Login Credentials: Upon approval, you will be provided with login credentials (User ID and Password) to access the ICEDGATE portal and start using the e-filing services for customs declarations.
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Frequently Asked Questions
Eligibility Check: Ensure that your bank is eligible to obtain an AD Code. AD Codes are typically issued to banks authorized by the RBI to deal in foreign exchange transactions.
Documentation and Application: Contact the designated department within your bank responsible for handling foreign exchange transactions or compliance matters. Obtain the necessary application form and guidance on the documentation required for obtaining an AD Code.
Submit Application: Complete the application form accurately and submit it along with the required supporting documents to the relevant department or authority within your bank. The documents required may include:
- Application form for AD Code issuance.
- Authorization letter from the bank’s management/board.
- Proof of identity and address of the bank.
- PAN card of the bank.
- KYC (Know Your Customer) documents of the bank.
- Any other documents as specified by the RBI or the bank.
Verification and Approval: The bank’s compliance department or designated authority will verify the application and supporting documents to ensure compliance with regulatory requirements. Upon successful verification, the application will be forwarded to the RBI for approval.
Allocation of AD Code: Once approved by the RBI, the bank will be allocated a unique AD Code. This code will be used to identify the bank in all foreign exchange transactions, including import and export activities.
Integration with Systems: The bank’s internal systems and processes will be updated to incorporate the newly allocated AD Code. This includes integration with electronic systems for processing foreign exchange transactions and compliance reporting.
Foreign Exchange Dealers: Entities that are specifically licensed or authorized by the RBI to operate as foreign exchange dealers are required to obtain an AD Code. These entities may include authorized money changers (AMCs), full-fledged money changers (FFMCs), and other non-bank entities engaged in foreign exchange transactions.
Primary Dealers: Primary dealers, also known as PDs, are financial institutions authorized by the RBI to participate in government securities auctions and conduct transactions in the secondary market. PDs are required to obtain an AD Code to facilitate foreign exchange transactions related to their operations.
Exporters and Importers: While exporters and importers themselves are not required to obtain AD Codes, they typically conduct foreign exchange transactions through banks that have AD Codes. Exporters and importers need to provide the AD Code of their authorized bank when submitting documents for customs clearance and trade transactions.
Other Entities: Certain other entities engaged in specific types of transactions, such as remittances, outward investments, and foreign currency loans, may be required to obtain an AD Code depending on the nature and volume of their foreign exchange transactions.
Application Form: Complete the designated application form for AD Code issuance provided by the RBI or the authorized institution.
Authorization Letter: A letter of authorization from the bank’s management or board of directors authorizing the application for AD Code issuance.
Proof of Identity and Address of the Bank: Documents verifying the identity and address of the bank, such as:
- Certificate of Incorporation
- Memorandum and Articles of Association
- Business License or Registration Certificate
- Address Proof (e.g., utility bills, lease agreement)
PAN Card of the Bank: Copy of the Permanent Account Number (PAN) card issued to the bank by the Income Tax Department.
KYC Documents: Know Your Customer (KYC) documents of the bank, including:
- Identity proof (e.g., Aadhaar card, passport, voter ID)
- Address proof (e.g., Aadhaar card, passport, utility bills)
- Recent passport-size photographs of authorized signatories
Bank Account Details: Details of the bank’s current account, including the account number, branch name, and IFSC code.
Business Details: Information about the bank’s business activities, scope of operations, and clientele, including:
- Nature of banking services offered (e.g., commercial banking, forex services)
- Target market segments (e.g., retail customers, corporate clients)
- Annual turnover and transaction volume related to foreign exchange transactions
Other Documents: Additional documents as may be required by the RBI or the authorized institution, such as:
- Certificate of Foreign Exchange Transactions (CFET) issued by the bank
- Letter of Undertaking (LUT) or Bank Guarantee (BG) if applicable
- Any other documents specified in the application form or guidelines provided by the RBI or the authorized institution
Facilitates Foreign Exchange Transactions: An AD Code enables banks to conduct foreign exchange transactions, including remittances, payments for imports, receipts from exports, and other cross-border financial activities on behalf of their customers.
Compliance with Regulatory Requirements: Having an AD Code ensures compliance with regulatory requirements set by the RBI and other regulatory authorities governing foreign exchange transactions in India. Banks with AD Codes are authorized to operate in the foreign exchange market and are subject to regulatory oversight.
Enhanced Credibility and Trust: An AD Code enhances the credibility and trustworthiness of banks in the eyes of customers, counterparties, and regulatory authorities. It signifies that the bank is authorized and capable of handling foreign exchange transactions in a compliant and secure manner.
Streamlined Customs Clearance: Exporters and importers can provide the AD Code of their authorized bank when submitting documents for customs clearance. This helps streamline the customs clearance process and facilitates smooth and efficient trade transactions.
Improved Efficiency and Speed: With an AD Code, banks can process foreign exchange transactions more efficiently and quickly, reducing processing times and improving customer service levels. Electronic systems and platforms for foreign exchange transactions are often integrated with AD Codes for seamless processing.
Access to Foreign Exchange Markets: Banks with AD Codes have access to the foreign exchange markets, allowing them to participate in currency trading, hedging, and other financial activities to manage foreign exchange risk and optimize liquidity.
Expansion of Business Opportunities: Having an AD Code opens up new business opportunities for banks, including serving customers engaged in international trade, facilitating cross-border investments, and offering a wide range of forex services to corporate and retail clients.
Supports Economic Growth and Development: The availability of AD Codes supports economic growth and development by facilitating international trade, capital flows, and investments. It contributes to the integration of the Indian economy with global markets and promotes cross-border economic activities.