Your bank sent a regulatory deviation letter. What now?

What is your AD bank actually asking you for?

A letter has arrived from your AD bank. It lists a handful of open items (a Bill of Entry not shared, an advance received but no shipment, a shipping bill with no realisation, an import payment not made) and asks you to cooperate in "zeroizing these regulatory deviations". Before anything else: this is not a penalty notice, not a show-cause notice, and not correspondence from the Reserve Bank of India. No one has been fined. Nothing has been referred anywhere.

What it is, is your bank discharging a follow-up duty that RBI places on it . On the import side, where evidence of import is not furnished within 3 months of the remittance, the AD bank must follow up rigorously over the next 3 months using various modes of communication, with at least one communication by registered letter (Master Direction 17/2016-17, para C.10(i)). That registered letter is very often the one on your desk. On the export side, where an exporter neither realises the proceeds within the stipulated period nor applies for extension, the AD bank must report the matter to the concerned RBI Regional Office, and laxity by AD banks in following up realisation "will be viewed seriously by the Reserve Bank, leading to the invocation of the penal provision under FEMA, 1999" (Master Direction 16/2015-16, paras C.15(ii) and C.15(iii)).

A deviation , in this vocabulary, is an entry sitting open in IDPMS (imports) or EDPMS (exports) where the two legs of the transaction (the money and the goods) have not been matched and settled against each other. Money went out but no Bill of Entry arrived. Goods went out but no credit arrived. The system holds both halves separately and waits for someone to tie them together.

One honest caveat up front, because it shapes the whole page: a bank letter states the bank's own monitoring trigger, which is not always the statutory limit. On the letter these pages are built from, three of the four stated figures do exactly that. Two of them are tighter than FEMA requires, and one is looser. Tighter is merely annoying. Looser is dangerous, because your bank's screen will keep printing "within timeline" after the legal date has passed.

The rest of this guide does five things in order: read the status column, identify which of the four item types each row is, find the deadline that actually binds, triage the rows against each other, and assemble the pack. A reply that lands inside the bank's own window is almost always cheaper (in chasing, in charges, in the tone of the next letter) than one that arrives after it.

Outstanding or overdue. What does each word mean on your letter?

The letter sorts every row into one of two buckets, and it uses the two words in a precise, narrow sense:

• Outstanding. Items outstanding but still within the stipulated timeline for submission.
• Overdue. Items which have crossed that timeline.

This is not the loose commercial sense of "overdue bills" you will have met in a receivables ledger, where overdue simply means the customer has not paid on the due date. Nor is it the 180-day post-shipment credit reclassification sense used in bank finance, where an export bill turns overdue for the purpose of interest and asset classification. Say it plainly to yourself before reading further: on this letter, both words describe the state of a regulatory entry, not the state of a debt.

The operating rule follows directly: read Outstanding as "the bank has not escalated yet" , never as "I am compliant". The bank is telling you about its own follow-up state. Compliance is a separate question you have to answer with a calendar.

The two labels also carry very different consequences, and it is worth being clear which kind of trouble each one is. An Overdue tag is usually a documentation problem, and documentation problems in this area are conspicuously curable: late lodgment of export documents is condonable by the AD bank itself, without prior RBI approval, where it is satisfied with the reasons for the delay (MD 16/2015-16, para C.7), and extension of time for settlement of import dues is grantable by the AD bank up to six months at a time (MD 17/2016-17, para B.5.4). A silently passed FEMA date , by contrast, is a contravention. Something that has to be regularised through the relief routes or, failing that, compounded. The label that looks worse is generally the easier one to fix.

Which of the four deviation types is on your letter, and when is it really due?

Ignore the acronyms for a moment. Every row on the letter is one of four physical situations, and you can identify each one from the trade itself without knowing what IDPMS stands for:

The identification test

• Money went out before goods arrived. You paid an advance for an import and the Bill of Entry has not been shared. The letter calls this the BOE item.
• Money came in before goods left. You received an advance against an export and have not shipped yet. The letter calls this the IRM item.
• Goods left and money has not come in. You exported and the proceeds have not been realised. The letter calls this the EDPMS item.
• Goods arrived and money has not gone out. You imported and have not paid. The letter calls this the IDPMS item.

Type 1. Advance import paid, Bill of Entry pending

The bank typically states 90 days from the date the import payment was made. The regulation is expressed in months, not days: the AD bank may allow a reasonable time "not exceeding three months from the date of remittance" for you to submit evidence of import (MD 17/2016-17, para C.7.1(ii)), and where nothing is furnished within 3 months it must follow up rigorously over the next 3 (para C.10(i)). There is a wider outer limit as well: where goods against an advance legitimately arrive later, physical import must be made within six months (three years for capital goods) from the date of remittance, with documentary evidence furnished within fifteen days of the close of that period (para C.1.3). Three calendar months is 89 to 92 days depending on where in the year you start, so a flat 90-day system trigger flags some items marginally early. Two things worth knowing: the evidence-of-import obligation applies irrespective of the value of foreign exchange remitted or paid (para C.7.1(i)) (the USD 200,000 and USD 5,000,000 thresholds govern whether a standby letter of credit or guarantee is needed for the advance (paras C.1.1 and C.1.4), not the evidence deadline) and EDI auto-download of the Bill of Entry (para C.8(iii)) removes the paper, not your duty to furnish the BoE number, port code and date.

Type 2. Export advance received, shipment pending

The bank typically states 360 days from the inward remittance date. The rule is three years from the date of receipt of the advance, substituted into para C.2(1) of MD 16/2015-16 by Notification No. FEMA 23(R)(7)/2025-RB dated 13 November 2025. Even the text it replaced said one year. No version of this rule has ever said 360 days. That is a bank monitoring trigger and nothing more. The statutory period comes with conditions worth reading before you rely on the slack: interest payable on the advance is capped at the reference rate for the currency plus 100 basis points, the documents covering the shipment must be routed through the AD bank through whom the advance was received, and once three years have passed no remittance towards refund of the unutilised advance or towards interest may be made without the prior approval of the Reserve Bank (proviso to para C.2(1)).

Type 3. Export made, realisation pending

The bank typically states 270 days from the shipment date. The rule is nine months from the date of export , and it applies to all exporters, including SEZ units, Status Holder Exporters, EOUs, EHTPs, STPs and BTPs (MD 16/2015-16, para A.2(i)). Nine calendar months is 273 to 276 actual days, so 270 is a conservative rounded proxy that always falls a few days short of the legal date. Which is the safe direction for a trigger to err. Two carve-outs sit alongside it: goods exported to a warehouse established outside India carry a fifteen-month realisation period (para A.2(iii)), and exports to Bharat Mart run nine months from the date of sale from the warehouse (para A.2(iv)).

This type carries a second, entirely separate obligation that the letter also flags: export documents must be lodged with the AD bank within 21 days from the date of export . The rule appears in parallel for non-EDI ports, EDI ports, export by post, and direct dispatch by Status Holder and SEZ exporters (paras B.1(iv), B.2(ii), B.3(ii) and C.10(ii)(b)).

Type 4. Import made, payment pending

The bank typically states 180 days from the Bill of Entry date. The rule is that "remittances against imports should be completed not later than six months from the date of shipment " (MD 17/2016-17, para B.5.1(i)). That differs from the bank's figure in both the unit and the start date, and it is the only one of the four rows where the bank's number gives you more time than FEMA allows. Before you concede a breach, check one thing: deferred payment arrangements including suppliers' and buyers' credit (up to three years for capital goods, and up to one year or the operating cycle whichever is less for non-capital goods) are treated as trade credits governed by the ECB, Trade Credits and Structured Obligations Master Direction, and are not six-month items under B.5.1 at all (para B.5.2).

Go deeper on your row

• Advance import remittance and BoE evidence. For the Type 1 row.
• Export advance with shipment pending. For the Type 2 row.
• EDPMS reporting and the export regularisation document pack. For the Type 3 row.
• IDPMS with import payment pending. For the Type 4 row.

Which item on the letter do you deal with first?

Not in the order the bank printed them. The printed order reflects how the bank's report was generated, not how near each real deadline is or how irreversible each outcome would be. Work in this order instead.

Rank 1. The IDPMS import payment row. It is the only row where the bank's own screen under-warns you. Six months from the bill of lading date can expire weeks before the bank's 180-days-from-BoE date, and nothing in the letter will tell you that has happened. Recompute this row today, before you open any other envelope.

Rank 2. Any export shipping bill approaching nine months from the date of export. The extension route under para C.20 has to be applied for, and the AD bank has to record the extension in EDPMS. Asking before the date has passed is a routine request; asking after it has passed is a different and weaker conversation.

Rank 3. The advance import evidence row. Three months from the remittance is what triggers the bank's rigorous follow-up and the registered letter. It also tends to be the cheapest row to close: furnishing the BoE number, port code and date is often enough on its own.

Rank 4. The 21-day lodgment items. These look alarming on a letter and are expressly curable: where documents are presented after 21 days, AD Category-I banks may handle them without prior RBI approval provided they are satisfied with the reasons for the delay (para C.7). Paperwork, not jeopardy.

Rank 5. The export advance row. It carries by far the most slack now that the statutory period is three years. The bank's 360-day figure sits roughly two years ahead of what FEMA requires, so this row is a conversation with your bank, not a race against a regulation.

What goes in the pack, and what does each document prove?

The pack has a spine, and everything else hangs off it. The spine is the Request Letter : the covering instruction that identifies which remittance or shipping bill is to be regularised and how it is to be linked. Without it the bank has a pile of paper and no instruction about what to do with it. Every other document in the pack is evidence supporting the link the Request Letter asserts. Quote the bank's own reference on it, and the IRM or FINW reference where the bank asks for one.

Now take each supporting document and ask not "is it required" but what does it prove. That is the question the bank officer is actually answering.

What each document proves

• e-FIRC. That foreign currency actually reached India through the banking channel: in what amount, on what value date, from which remitter, under which purpose code. It is the receipt-side proof. AD banks report the electronic FIRC to EDPMS wherever it is issued (MD 16/2015-16, para C.2(1)), and an eBRC can only be generated from EDPMS data (para C.30).
• Commercial invoice. The declared value, the buyer, the terms and the currency. It is the figure realisation is measured against. Para B.1(iv) of MD 16/2015-16 expressly requires an extra copy of the invoice to accompany the shipping documents.
• Bill of Lading / Airway Bill / motor transport document. That the goods physically left India, and on what date. That date fixes the date of export from which both the nine-month realisation clock and the 21-day lodgment clock run. And on the import side, the date of shipment from which the six-month payment clock runs. The motor transport document is the land-border equivalent of the bill of lading; use it where the consignment moved by road across a land customs station.
• Shipping Bill, Exchange Control copy. That Customs cleared the consignment for export, at EDI ports. Where the EC copy is not printed in terms of CBEC Circular No. 55/2016-Customs dated 23 November 2016 and shipping bill data is integrated with EDPMS, the requirement to submit it is dispensed with (para B.2(ii)).
• EDF. The same proof at non-EDI ports. The mechanics matter: Customs retains the original and returns the duplicate to you; the duplicate together with the relative shipping documents and an extra copy of the invoice goes to the AD bank named in the EDF within 21 days of export (para B.1(iv)); the AD bank holds the duplicate until the full export value is realised (para C.15(ii)); and where the duplicate is lost, a copy certified by Customs is acceptable (para B.1(vii)).
• SOFTEX. That a software or ITES export occurred, in the absence of any physical shipping bill.
• Packing list. That the invoice value ties to a physical consignment. Label this one honestly to yourself: it is AD bank documentation practice, not a Master Direction requirement.

On the import side the letter asks for a much smaller pack, and it is worth saying exactly how small: a Request Letter, the invoice and a Bill of Entry copy. Or simply the BoE details in the bank's prescribed format. What the bank actually needs from the Bill of Entry is three fields: the BoE number, the port code and the date , so it can settle the BoE against the Outward Remittance Message in IDPMS. Bills of Entry from EDI ports are downloaded by the bank from "BOE Master" in IDPMS using the AD code you declared, and submission of the hardcopy Exchange Control copy has been discontinued. But the furnishing duty survives the paperless process (para C.8(iii)).

What if the money or the documents went through a different bank?

The regulation contemplates one bank throughout. Where an advance has been received, the documents covering the shipment are to be routed through the AD bank through whom the advance was received (MD 16/2015-16, para C.2(1)). Proceeds are to come through the AD bank named in the EDF, which holds the duplicate until the full export value is realised (para C.15(ii)). The design assumes the money and the paper meet in the same place.

In practice they often do not. The buyer remits to whichever account you last gave them, or a treasury change moves your collections, and the credit lands at Bank B while Bank A holds the shipping bill and writes you the deviation letter. That mismatch cannot be argued away. It has to be cured evidentially, and the two odd-looking asks in the letter are exactly that cure.

Route 1. Close it at the bank that wrote to you

Obtain two things from the receiving bank: the original e-FIRC for the credit, and a written letter of non-utilisation confirming that it has not applied that inward remittance against any other shipping bill in EDPMS. Lodge both with the querying bank, which can then utilise the credit against its own shipping bill and close the entry.

Route 2. Accept that it was closed at the other bank

Sometimes the entry has already been regularised elsewhere. In that case obtain from the receiving bank either a BRC or eBRC covering the shipment, or a letter stating that the export documents were handled at its end, and give that to the querying bank as evidence. The eBRC carries particular weight here: since an eBRC can only be generated from EDPMS data (para C.30), its existence is itself evidence that the entry was closed in EDPMS.

Nothing obliges the two banks to correspond with each other. The burden of producing the e-FIRC, the non-utilisation letter or the BRC sits entirely on you, and a bank that has no live relationship with you is a slow correspondent. Plan for two to three weeks of chasing, and start the day the letter arrives rather than the day you finish the rest of the pack.

And what about the FINW reference?

The letter may ask you to quote a FINW reference number in the Request Letter. Be straight about what that is: the term appears nowhere in Master Direction 16/2015-16 or in the caution-listing circular, and no RBI, DGFT or ICEGATE source defines it. It is best understood as your bank's or EDPMS's message-level reference for the Foreign INWard remittance record (commonly the Inward Remittance Message, the IRM) which you quote so the bank can match a specific credit to a specific shipping bill. Because the format is bank-specific, confirm the exact reference with the bank that issued the credit rather than constructing something that looks plausible. Never treat it as a regulatory identifier.

What if you cannot close the item within the deadline?

FEMA has relief routes built into it, and using one is a normal compliance act rather than an admission of default. Exporters and importers apply for extensions every day and banks grant them every day. What is genuinely dangerous is silence. An item that runs past its date with nothing on file explaining why.

Meridian Polymers, Ahmedabad, imports a container of polymer resin from Rotterdam, invoice USD 92,000, on 60-day supplier credit that slipped when a quality dispute opened. The bill of lading is dated 4 February 2026. The container reaches Mundra and the Bill of Entry is filed and assessed on 3 March 2026. Payment has still not gone out. On 10 August 2026 the AD bank's regulatory deviation letter lands, listing the entry under IDPMS. Imports made, payment pending, with status

Outstanding

and the note "payment to be made within 180 days from BOE date". </> } result= >

Count the bank's clock first, then FEMA's.

On an air consignment cleared the next day, the two dates would have been within a day of each other and the discrepancy would never have shown. The gap here is created entirely by ocean transit.

Extension of the export realisation period

AD Category-I banks may extend the period beyond the stipulated period by six months at a time , irrespective of invoice value, subject to the transaction not being under investigation by the Directorate of Enforcement, the CBI or another agency, the bank being satisfied that non-realisation was for reasons beyond your control, and your declaration that the proceeds will be realised during the extended period. For extension beyond one year from the date of export, the total outstanding must not exceed USD 1 million or 10% of the average export realisations of the preceding three financial years, whichever is higher. With no amount restriction where you have filed suit abroad against the buyer. Extensions are recorded in EDPMS (para C.20).

Extension of time for import payment

Your AD Category-I bank may itself grant extension of time for settlement of import dues up to six months at a time, to a maximum of three years, without any reference to RBI , where the reasons are genuine and the importer is not under investigation (para B.5.4). This is a branch-level conversation, not a Mumbai one.

Write-off where the money will never come

On the export side, para C.23 permits self-write-off of 5% of export proceeds for ordinary exporters and 10% for Status Holder Exporters, and write-off of 10% by the AD bank. Each reckoned cumulatively against the total export proceeds realised in the preceding calendar year, and each subject to the amount being outstanding for more than a year, documentary evidence of best efforts to realise, and your being a KYC and AML compliant customer of the bank for at least six months. On the import side the tolerances are narrower but real: an AD bank may close a Bill of Entry or Outward Remittance Message in IDPMS involving write-off up to 5% of invoice value where the declared amount varies from the actual remittance for operational reasons (para C.8(x)), and may close where the difference arises from quality issues, short shipment or destruction of goods (para C.8(xi)).

The fear you probably arrived with: caution-listing

Automatic caution-listing at two years is gone . The old rule caution-listed an exporter whose shipping bill remained open beyond two years in EDPMS. It was replaced by A.P. (DIR Series) Circular No. 03 dated 9 October 2020, and the test is now conduct: an exporter is caution-listed by RBI only on the AD bank's recommendation, based on adverse notice from the Directorate of Enforcement, CBI, DRI or another agency, untraceability, or not making sincere efforts to realise proceeds (para C.28(1)). The age of the entry is no longer the trigger.

It still costs a great deal if it happens. A caution-listed exporter's shipping documents may be handled by an AD bank only against 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 (para C.28(2)). Prior RBI approval is needed before a bank issues guarantees on your behalf, and export claims cannot be remitted while you are listed (para C.22(i)). In working terms it makes normal trade terms unavailable.

One more mechanism worth correcting: the standalone BEF Statement to RBI was required only up to the half year ended December 2017 and stands discontinued, and AD banks must continue to follow up outward remittances made for import until the entry is settled or closed. An unsettled Outward Remittance Message does not lapse or age out (paras C.8(xvi) and C.10(ii)). So "they will report you in the next statement" is no longer literally the mechanism. RBI sees the open item in IDPMS continuously, which is both less dramatic and less forgiving.

Your reply pack, checked line by line

Nothing new below. This is the whole guide compressed into something you can execute today, in order.

The pack itself

• Request Letter quoting the bank's reference, and the IRM/FINW reference where the bank asks for one
• e-FIRC. The original where the credit landed at a different bank
• Commercial invoice
• Transport document matched to mode. Bill of Lading for sea, Airway Bill for air, motor transport document for a land border
• Shipping Bill EC copy if an EDI port; EDF duplicate if a non-EDI port
• SOFTEX if software or ITES
• Packing list if applicable
• For import rows: Bill of Entry copy, or the BoE number, port code and date in the bank's prescribed format
• Extension request under C.20 or B.5.4 for anything that will not close in time
• Write-off request with documentary evidence of best efforts where the money will never come
• Declaration for every entry at or under Rs 10 lakh

Where to go next

• IDPMS with import payment pending. The row with the shortest real deadline on your letter.
• Advance import remittance and BoE evidence. What "evidence of import" actually means and how little of it you may need.
• Export advance with shipment pending. The three-year rule, the interest cap and the refund trap.
• The export regularisation document pack. The full pack and the other-bank instruments in detail.
• EDPMS reporting. How closure works end to end, so the next letter is shorter.

Update history

• 2026-08-14 First published.