DGFT Seeks Comments on Draft SOP for NBFC Factor Inward Remittances and eBRC Reporting

Current development

The Directorate General of Foreign Trade (DGFT) has invited stakeholder comments on a draft Standard Operating Procedure for reporting Inward Remittance Messages (IRMs) connected with export transactions involving NBFC Factors. The consultation was issued through Trade Notice No. 20/2026-27 dated August 12, 2026 and is relevant to exporters, banks, NBFC Factors, Export Promotion Councils, trade bodies and professionals handling export-realisation compliance.

The proposed mechanism is intended to address a practical reconciliation issue in the electronic Bank Realisation Certificate (eBRC) ecosystem. Export receivables may be financed or purchased by an NBFC Factor before the overseas payment is ultimately received through the banking channel. Unless the remittance data clearly identifies the factoring arrangement, the inward-remittance record available for eBRC self-certification can become difficult to match with the underlying export invoice or shipping bill.

What the draft SOP proposes

For foreign-currency proceeds remitted by an NBFC Factor to an authorised dealer bank, the draft SOP proposes a prescribed reporting approach so that the remittance is identified as relating to an NBFC Factor transaction rather than being treated as an ordinary exporter-level inward remittance. The objective is to improve the quality of the remittance information available in the DGFT ecosystem and reduce incorrect or duplicate IRM creation.

The draft also deals with cases where an NBFC Factor releases funds in Indian rupees after discounting an export bill and there is no corresponding SWIFT message carrying the required inward-remittance information. In such situations, the customer seeking the relevant remittance information may need to approach the concerned Factor so that the transaction can be correctly mapped for eBRC purposes.

Once NBFC Factor-linked remittance information is available in the DGFT system, exporters are expected to use that data while self-certifying eBRCs by matching the remittance with the appropriate invoices or shipping bills. The proposal therefore sits at the intersection of export finance, banking operations and foreign-trade compliance rather than creating a new tax levy or a separate return.

Why exporters and finance teams should review the proposal

eBRC data is important for demonstrating realisation of export proceeds and for several foreign-trade processes that depend on reliable evidence of export earnings. A mismatch between the entity receiving funds, the remittance message and the original exporter can create avoidable reconciliation work, delay certification and complicate supporting documentation.

Exporters using factoring arrangements should therefore review how their current workflow captures the identity of the Factor, the authorised dealer bank, the export invoice, shipping bill and final inward remittance. Finance teams should also check whether internal records can reliably connect the amount initially received from the Factor with the later foreign-currency realisation that enters the banking system.

For NBFC Factors and banks, the consultation is operationally important because any final SOP may require consistent message narration, data fields or hand-offs between the Factor and the authorised dealer bank. Teams responsible for trade operations, treasury, compliance and eBRC support should examine whether their existing systems can produce and transmit the proposed information without manual gaps.

Thirty-day consultation window

DGFT has invited comments and suggestions within 30 days from the publication of Trade Notice No. 20/2026-27. The consultation is therefore still at the draft stage. Businesses should not treat the proposed SOP as a final mandatory operating rule until DGFT issues the final framework or a further communication.

Stakeholders considering a response should focus on implementation issues such as unambiguous identification of NBFC Factor transactions, treatment of rupee funding against export bills, prevention of duplicate IRMs, matching logic for eBRC self-certification, handling of partial realisations and the information exchange required among exporters, Factors and authorised dealer banks.

Practical significance for CAs and finance professionals

Chartered Accountants and finance professionals advising exporters should identify clients that use factoring or bill-discounting structures and assess whether their export-realisation records are readily reconcilable. This is particularly relevant where the party providing working-capital funding is different from the bank through which the eventual overseas proceeds are received.

The draft SOP also provides an opportunity for practitioners to flag situations that may create reconciliation or audit-trail difficulties before the procedure is finalised. Any submission should distinguish between the commercial funding leg and the actual export-proceeds realisation so that the final reporting mechanism preserves a clear link to the underlying export transaction.

Key takeaway

DGFT's August 12, 2026 Trade Notice opens consultation on a draft SOP for reporting inward remittances connected with NBFC Factors, with the aim of improving IRM identification and eBRC self-certification. Exporters, Factors, banks and their finance and compliance advisers should review the proposed workflow and consider submitting implementation feedback during the 30-day consultation period.