You received an export advance and have not shipped yet

What is your bank actually asking for on an export advance?

On the bank's letter the item is usually tagged IRM and described as advance toward export received, export details pending. It exists for one reason: foreign currency landed in your account under an export purpose code, and no shipment has yet been linked to it. The bank reported that inward remittance to EDPMS as it is required to under para C.2(1) of FED Master Direction No. 16/2015-16. The credit is now an open inward-remittance record, and the bank cannot close it until a shipment is utilised against it.

Read the letter in that light and it stops being alarming. The bank is not accusing you of anything. It is discharging its own follow-up duty under para C.2, and a letter is the only way it has to reach you. The words the letter uses ("regularisation", "Request Letter", "zeroizing these regulatory deviations") are the bank's operational vocabulary for closing an EDPMS record, not a finding against you.

Two things get confused with this item, and confusing them wastes weeks:

What this item is not

• Not an "advance against export bills". That is a lending product from your bank's export finance desk, where the bank advances you money against bills you have already drawn. It is a credit facility. Entirely different animal, entirely different desk.
• Not an EDPMS realisation item. That is the opposite case: goods have already left India and the payment has not arrived. That item is about money coming in. This one is about goods going out.

You have no independent view of EDPMS. Exporters cannot log in and read their own entries; the bank's letter is the only visibility you get. That makes the correct first move obvious: rather than guessing which credit the bank means, ask the branch for the credit date and the reference it is querying, and quote that reference back in your reply.

How long do you actually have to ship against the advance?

Take the rule first and the bank's figure second. Under FED Master Direction No. 16/2015-16 para C.2(1), which gives effect to Regulation 15 of Notification No. FEMA 23(R)/2015-RB dated 12 January 2016, an exporter who receives advance payment from an overseas buyer must ensure that shipment is made within three years from the date of receipt of the advance payment .

That three-year figure is recent. "Three years" was substituted for "one year" in para C.2(1) vide Notification No. FEMA 23(R)(7)/2025-RB dated 13 November 2025. So an exporter reading older guidance will find one year, and both numbers are real. One is simply superseded.

Now the letter's 360 days. No RBI provision anywhere uses 360 days for this obligation. The pre-November-2025 text was one year, which is 365 days. The current text is three years. A 360-day demand is therefore an internal bank monitoring trigger sitting roughly two years ahead of the statutory limit.

What do you do with that gap? A bank is entitled to monitor on its own schedule and to ask you for documents at any point. But "my bank says it is overdue" and "I am in breach of FEMA" are two different statements, and it is both reasonable and useful to write back citing para C.2(1) and asking the bank to confirm which period it is applying. That reply is cheap, it is polite, and it is on the record.

Two conditions ride along with the advance, and readers trip on them more often than on the deadline itself:

Conditions attached to an export advance under C.2(1)

• Interest ceiling. Interest payable on the advance, if any, must not exceed the reference rate (LIBOR, any other widely accepted rate, or an Alternative Reference Rate) plus 100 basis points. The alternative-reference-rate wording was inserted vide A.P. (DIR Series) Circular No. 13 dated 28 September 2021.
• Routing condition. The documents covering the shipment must be routed through the AD Category-I bank through whom the advance payment was received. This single condition is the root cause of most of the other-bank problems covered in section 5.

Does it matter whether the letter marks your item Outstanding or Overdue?

The letter uses a two-state binary, and it defines it itself:

That last cell is the whole point. The timeline the bank is measuring against is the bank's timeline. On an export advance, an item can be flagged Overdue at day 361 while the FEMA period under para C.2(1) still has more than two years to run.

What actually follows from each state is worth stating from the primary sources rather than from fear. Under para C.2, an AD bank must follow up efficiently where advances remain outstanding beyond the stipulated period on account of non-performance, must apply KYC and AML due diligence, and must refer doubtful cases and chronic defaulters to the Directorate of Enforcement, forwarding a quarterly statement of such cases to the concerned RBI Regional Office within 21 days from the end of each quarter.

Under para C.15, where an exporter neither realises proceeds within the stipulated period nor applies for extension, the AD bank must report the matter to the concerned Regional Office of the Reserve Bank; and laxity by the AD bank itself in following up realisation is viewed seriously and can lead to invocation of the penal provisions under FEMA, 1999. That last sentence is the real reason these letters get written at all. The bank has its own exposure.

The current test in para C.28(1) is conduct. An exporter is caution-listed by the Reserve Bank on the recommendation of the AD bank, based on track record with the bank and with investigative agencies, where the exporter has come to the adverse notice of the ED, CBI, DRI or any other law enforcement agency, and/or is not traceable, and/or is not making sincere efforts to realise export proceeds.

If it does happen, para C.28(2) sets the consequence plainly: a caution-listed exporter's shipping documents may be handled by an AD bank only against evidence of advance payment received or an irrevocable letter of credit covering the full value of the proposed exports; otherwise AD banks are not to handle the documents at all, and prior Reserve Bank approval is needed before issuing guarantees for a caution-listed exporter. For a working exporter that is close to a trading freeze.

Which documents regularise the advance, and what does each one prove?

This is the core of the reply. Work the bank's own list item by item, and for each one understand what fact it establishes. Because a reader who knows what a document proves can substitute correctly when the exact paper is missing.

What each document is doing in the pack

• Request Letter. The spine of the pack. It carries the credit reference and instructs the bank which advance to link to which shipment. Without it the bank has a pile of paper and no instruction.
• e-FIRC. Proves that foreign currency actually reached India: in what amount, on what value date, from which remitter, under which purpose code. This is where your date of receipt of advance comes from.
• Commercial invoice. The declared value against which everything else is measured. Note that para B.1(iv) expressly requires an extra copy of the invoice to accompany the shipping documents.
• Bill of lading, airway bill or motor transport document. Proves the goods physically left India, and on what date. That date is the date of export, and both the 21-day and the nine-month clocks in section 7 run from it. Road exporters at land borders: the motor transport document is your transport evidence.
• Shipping bill, Exchange Control copy. The customs declaration of the export at an EDI port. Where the EC copy is not printed and shipping bill data is integrated with EDPMS, para B.2(ii) dispenses with the requirement to submit it.
• EDF duplicate. The equivalent declaration at a non-EDI port. The AD bank holds the duplicate EDF until proceeds are realised, under para C.15(ii). If the duplicate is lost, para B.1(vii) provides the route of a Customs-certified copy.
• SOFTEX. The declaration for software and ITES exports, which have no shipping bill because nothing crosses a customs frontier physically.
• Packing list. Supporting detail on contents and quantities, where the bank asks for it.

What if another bank handled your export documents?

First, why this mismatch arises at all. Para C.2(1) contemplates the advance-receiving bank and the document-handling bank being the same bank. That is exactly what the routing condition says. The EDF scheme makes the same assumption from the other side: proceeds are expected through the AD bank named in the EDF, and that bank holds the duplicate EDF until realisation under para C.15(ii). When the advance lands at one bank and the shipping bill goes through another, the regulation's assumption breaks, and the gap has to be closed with evidence.

The bank's letter gives you two options, and they do different jobs.

The second row is the mirror-image case, and you will meet it on the same letter. Where the money landed at Bank B but the shipping bill sits with Bank A, Bank A needs to know that Bank B has not already used that credit to close something of its own. The non-utilisation letter is what says so. Without it, nothing prevents the same remittance being applied twice.

What if you cannot ship against the advance at all?

The bank's letter never mentions this branch, but plenty of readers are in it: the order was cancelled, the buyer walked away, the goods were never made. The money is sitting in your account and no shipment is coming.

The governing constraint is the proviso to para C.2(1). Where the exporter is unable to make the shipment, partly or fully, within three years from the date of receipt of the advance payment, no remittance towards refund of the unutilised portion of the advance, and no remittance of interest on it, may be made after expiry of that period without the prior approval of the Reserve Bank .

Partial cases are common and need to be tracked as two things at once. An advance can be part-utilised by a smaller shipment with the balance refunded. The shipped half then follows the document pack in section 4 and the clocks in section 7; the unshipped half follows this section, on its own timeline running from the same credit date. Do not let the two collapse into one line in your file.

What should you tell the bank in the meantime? Put a short written note on record: the credit and its date, the amount unutilised, the reason the shipment has not happened, and the intended route. Ship by a stated date, or refund by a stated date. That note is exactly what evidences sincere effort under the C.28(1) conduct test discussed in section 3, and it costs an afternoon.

One honest caveat. Whether your AD bank permits a particular refund remittance is its own decision, taken on its own due diligence and its own KYC and AML checks under para C.2. This section tells you what the rule allows, what to prepare, and what to ask. It cannot promise you an outcome, and any adviser who does is guessing.

Once you ship, which deadlines start and what closes the entry?

Shipping does not end the file. It swaps one open item for the next two, and this is where most exporters collect a second letter.

First clock: documents to the AD bank within 21 days from the date of export. This applies across all four channels, so nobody should think it is only an EDI-port rule. Para B.1(iv) for non-EDI ports (duplicate EDF with shipping documents and an extra invoice copy), para B.2(ii) for EDI ports with its EC-copy dispensation, para B.3(ii) for exports by post, and para C.10(ii)(b) for Status Holder Exporters and SEZ units dispatching documents direct, where the duplicate EDF goes to the AD bank within 21 days from the date of shipment.

Second clock: realisation within nine months from the date of export under para A.2(i). Nine months applies to all exporters, including SEZ units, Status Holder Exporters, EOUs, and EHTP, STP and BTP units. There is no separate longer period for any of them. Two live exceptions exist, and neither is about who you are: goods exported to a warehouse established outside India get fifteen months from the date of shipment under para A.2(iii), and goods exported to Bharat Mart in the UAE may be realised within nine months from the date of sale of the goods from the warehouse rather than the date of shipment, under para A.2(iv) read with A.P. (DIR Series) Circular No. 03 dated 23 April 2025. The COVID-era fifteen-month relaxation applied only to exports made up to 31 July 2020 and is spent.

The bank's 270 days is a rounded-down proxy for nine months. Nine calendar months is 273 to 276 actual days depending on where in the year you start, so day 270 always falls a few days short. Working to it is safe and conservative; treating day 271 as a breach is over-tight.

Finally, the legitimate exits before an item ever becomes overdue. Under para C.20(i), AD Category-I banks may extend the realisation period beyond the stipulated period by up to six months at a time, irrespective of invoice value, where the transaction is not under investigation and non-realisation was for reasons beyond the exporter's control; for an extension beyond one year from the date of export, the exporter's total outstanding must not exceed USD 1 million or 10 per cent of average export realisations of the preceding three financial years, whichever is higher. Extensions are reported in EDPMS under para C.20(iii). And for entries of Rs 10 lakh or less per entry or bill, para C.31 allows closure on your own declaration of realisation.

Every path through this letter starts with two facts you already hold: the date the advance landed and whether goods have left India against it. Fix those two, and the rest is mechanical. The deadline follows from the credit date, the document pack follows from whether and how you shipped, and the two-option other-bank route follows from the AD code on the shipping bill. What you must not do is treat the bank's quoted figure as the law, because on this item type it is not. </> } steps= , , , , , , ]} />

A Coimbatore engineering exporter receives an advance of USD 48,000 from a German buyer on 4 February 2026, credited at Bank A, which reports the inward remittance to EDPMS. On 3 August 2026 Bank A sends a regulatory deviation letter listing the credit under IRM (advance toward export received, export details pending) and quotes 360 days from the inward remittance date. The exporter has shipped USD 30,000 worth of goods on 18 June 2026 through an EDI port, but the shipping documents went to Bank B. USD 18,000 of the advance is still unshipped. </> } result= >

Your reply-to-the-bank checklist for an open export advance

Work down this list the same day the letter arrives. It is sequenced so the longest-lead item (step 5) is started before you spend time on anything you control yourself.

Same-day actions

Frequently asked questions

I received an advance from my buyer but have not shipped yet. How long do I actually have?

Three years from the date of receipt of the advance payment. That is the period in FED Master Direction No. 16/2015-16 para C.2(1), which gives effect to Regulation 15 of Notification No. FEMA 23(R)/2015-RB. The period was substituted from one year to three years vide Notification No. FEMA 23(R)(7)/2025-RB dated 13 November 2025. Two conditions ride along with it: interest on the advance, if any, must not exceed the reference rate plus 100 basis points, and the documents covering the shipment must be routed through the AD Category-I bank through whom the advance was received.

My bank's letter says 360 days from the inward remittance date. Is that the RBI rule?

No. No RBI provision uses 360 days for shipment against an export advance. The current period under para C.2(1) is three years from the date of receipt of the advance, and even the pre-November-2025 text said one year, which is 365 days. A 360-day figure in a bank letter is an internal monitoring trigger the AD bank uses to follow up early, not the statutory limit. The bank is entitled to monitor on its own schedule and to ask you for documents, but being past the bank's trigger is not the same as being in breach of FEMA. Write back citing para C.2(1) and ask the bank to confirm which period it is applying.

My export documents went to a different bank from the one that received the advance. How do I close the entry?

The querying bank can close its entry on one of two things: a letter from the other bank stating the export documents have been handled at its end, or the BRC or eBRC issued by that bank for the shipment. The BRC is the stronger evidence, because under para C.30 an eBRC can only be generated from EDPMS data, so its existence proves the entry is closed in EDPMS at that bank. Nothing requires the two banks to correspond with each other, so the burden of producing the letter or the BRC sits on the exporter. Start the request at the other bank the same day the query arrives, because it is the longest-lead item in the pack. For entries of Rs 10 lakh or less, para C.31 allows closure on your own declaration of realisation instead.

What happens if I cannot ship at all and have to refund the advance to my buyer?

Remit the refund before the three-year period expires. The proviso to para C.2(1) says that where the exporter is unable to make the shipment, partly or fully, within three years from the date of receipt of the advance, no remittance towards refund of the unutilised portion and no remittance of interest on it may be made after expiry of that period without the prior approval of the Reserve Bank. So the refund is a bank-level transaction while you are inside the period and an RBI approval case the day after. Interest, if any, is capped at the reference rate plus 100 basis points. Whether your AD bank permits a particular refund remittance is still its own decision on its own due diligence.

Will I be caution-listed just because this advance has been sitting open?

Not on age alone. The old automatic trigger, where an exporter was caution-listed if a shipping bill stayed open for more than two years in EDPMS, was removed by A.P. (DIR Series) Circular No. 03 dated 9 October 2020. The current test in para C.28(1) is conduct: caution-listing follows where the exporter has come to the adverse notice of the ED, CBI, DRI or another law enforcement agency, and/or is not traceable, and/or is not making sincere efforts to realise export proceeds. A documented, answered letter is itself evidence of sincere effort. Silence is what converts an administrative item into a conduct finding. If caution-listing does happen, para C.28(2) means shipping documents can then only be handled against advance payment received or a full-value irrevocable letter of credit.

Sources & citations

• [RBI FED Master Direction No. 16/2015-16. Export of Goods and Services](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10395). Paras A.2, B.1, B.2, B.3, C.2, C.7, C.10, C.15, C.20, C.28, C.30, C.31

Update history

• 2026-08-14 First published.