Why is a Bank Certificate Required to Get an IEC Code?

Last Updated at: Feb 03, 2021
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IEC Code
In a recent notification, the DGFT has asked for attention of all exporters and importers regarding the proposed rollout of its digital IEC platform. Among other things, it said that only the Aadhaar e-sign of the proprietors/directors/partners as mentioned on their IEC may be used for Aadhaar based authentication.

An IEC Code, better known as the Import Export Code, is mandatory for all entrepreneurs who wish to start an import or export business in India. The Director-General of Foreign Trade is the body responsible for issuing the IEC code to businesses in India. This 10-digit code remains valid for the business’s lifetime and enables the company to send and receive products from abroad. The process of applying for the IEC code has undergone changes in recent years. One question that most business owners have is why the DGFT requires a bank certificate for IEC code processing. In this article, we will go over the need for a bank certificate for IEC code processing and the format of bank certificate for issuance of IEC code. 

  1. What is the IEC Code?

  2. When do businesses require an IEC Code?

  3. Process of obtaining an IEC Registration?

  4. What are the documents required for IEC Registration?

  5. Benefits of IEC Registration?

  6. What is the format of a bank certificate for issuance of IEC?

What is the IEC Code?

The Import Export Code is one of the most necessary licenses or registrations that an import or export business can have in India. Issued by the DGFT, this code enables businesses in India to send products to and receive goods from foreign nations. It is a unique ten-digit code that has lifetime validity, making the process of application and usage easy and straightforward. The IEC code also enables export and import businesses to avail various benefits offered by the DGFT.

When do businesses require an IEC Code?

Import and export businesses require an IEC code in the following situations and circumstances;

  • Importer wishes to clear their shipments from the customs authorities
  • Importer wishes to send money abroad via financial institutions or banks 
  • Exporter wishes to send shipments through customs
  • Exporter receives foreign currency as payment into their bank account directly 

As per the government’s latest order, the IEC code is no longer mandatory for traders who have a GST registration. In such cases, they may use their PAN card for import and export purposes. Additionally, the IEC Code is not mandatory when the goods that have been exported or imported are for personal purposes and not intended for sale. IEC Registration is also not mandatory for any exporting or importing done by the departments or ministries of the Indian government or by notified charitable institutions. 

get iec code 

What is the process of obtaining an IEC Registration?

  1. First and foremost, business owners must prepare an application in the specified format. The form, known as the Aayaat Niryaat Form Number 2A (ANF2A) must be filed to the respective DGFT Regional office.
  2. Next, the applicant must prepare and obtain all the required documents which serve as proof of identity, address and business registration. These documents must be sent along with Form ANF2A.
  3. You may make use of a Digital Signature Certificate to file the application with the DGFT, and so it is best if you apply for one. 
  4. Once you have filed an application, you will have to pay the required processing fee for IEC Registration.
  5. Lastly, the executives at the DGFT Office will review and verify your documents, and once they approve it, you will receive an IEC Code from the government.

What are the documents required for IEC Registration?

The applicant must upload scanned copies of the supporting documents onto the DGFT’s official portal. The only file formats allowed by the website are GIF and PDF and files in any other format will not be allowed or uploaded.

IEC Code Registration requires the following documents mandatorily:

  • Bank Certificate or Pre-printed cancelled cheque from the bank
  • Aadhar card / Passport / Voter ID
  • Address proof of the business: Rent Agreement or Electricity Bill or Property Registration document for the place of business
  • In case no address proof is not in the name of the company, submit a NOC from the owner of the premises

Photographs, Pan Cards and Passports may upload as GIFs whereas sale deeds, MoUs, Bank certificates and registration certificates must be in the PDF format. Additionally, the Aadhaar card, Driving License, Cancel Cheque and Voter ID may upload either as a GIF or as a PDF.

The following documents are not now mandatory for IEC code registration;

  1. Digital Signature Certificate
  2. Copy of PAN Card 
  3. Photograph

While a DSC may not be mandatory, if an application is authorised using a Digital Certificate, the applicant does not have to send a physical application to the DGFT Regional Authority.

What are the benefits of IEC Registration?

  1. Business Expansion: An IEC registration enables you to grow your business and expand into foreign markets with ease.
  2. Government Benefits: Allows your business to avail the benefits offered by the Customs authorities, DGFT and the Export Promotion Council.
  3. Returns: The IEC Registration is a simple process that does not require businesses to file any returns. Hence, once you receive the allotment, you do not have to follow up with any other process as it has lifetime validity.
  4. Processing: The government has made the process of IEC registration quick and simple. The entire process takes only ten to fifteen days, and almost all of it occurs online.
  5. Perpetual: One of the best things about the IEC code is that it remains effective for the lifetime of an entity. Hence, it requires no renewal and no further processing or paperwork. 

What is the format of a bank certificate for issuance of IEC?

Here’s a quick look at a sample request letter for a bank certificate for IEC code registration. The bank certificate for IEC Code registration must be on a formal letterhead of the bank and must be by a Bank Manager. The bank certificate is mandatory if you do not have a copy of the Cancelled Cheque. The following points must be followed by submitting a bank certificate for IEC code processing.

  1. Must be printed on an official Letter Head of Bank
  2. It should follow the format mentioned below. Applicants must not change the format and language used.
  3. The photograph affix must have stamp and sign by the applicant.
  4. The Bank Certificate must contain the IFSC Code of Bank.
  5. The certificate must be made in favour of the Regional DGFT Authority. 

________________________________________________________________________

 Reference Number: _ _ _ _ _ _ _

 To

_ _ _ _ _ _ _ _ _ _ _

_ _ _ _ _ _ _ _ _ _ _

_ _ _ _ _ _ _ _ _ _ _

(Issuing authority’s Full name and address)

Respected Sir/ Madam

_ _ _ _ _ _ _ _ (Name of the bank and the bank branch) certifies that Mr/Ms _ _ _ _ _ _ _ _ _ _ _ (Account Holder’s full name and Address) is / or are maintaining a Savings / or Current Bank Account (tick the applicable option) No: _ _ _ _ _ _  with us, since _ _ _ _ _ (Date of opening account).

Attach a recent, passport size photograph of the account holder

 

             (Issuing Authority/Bank Manager rank or above Signature)

Name _ _ _ _ _ _

Designation _ _ _ _ _ _

Bank’s IFSC Code: _ _ _ _ _ _

 Date: _ _ _ _ _

 Place: _ _ _ _ _

(Banks’ official Stamp)