RBI Authorized Dealer (AD Bank)
A bank authorized by the Reserve Bank of India to deal in foreign exchange. All legitimate international payments to India must flow through AD banks.
What is an Authorized Dealer Bank?
An Authorized Dealer (AD) bank is a financial institution licensed by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA) to deal in foreign exchange transactions.
All legitimate international payments coming into India must be processed through an AD bank. This ensures proper regulatory reporting and compliance with RBI guidelines.
Categories of Authorized Dealers
| Category | Description | Examples |
|---|---|---|
| AD Category I | Full-service commercial banks | SBI, HDFC Bank, ICICI Bank, Axis Bank |
| AD Category II | Select cooperative banks, regional rural banks | Limited forex services |
| AD Category III | Non-bank entities | Money changers, select NBFCs |
Most freelancers' payments are processed through AD Category I banks.
Why It Matters for Freelancers
When you receive international payments through an AD bank:
- The transaction is recorded in the RBI's EDPMS system
- A FIRA certificate can be issued as proof
- Proper purpose codes are assigned
- Your payment is fully compliant with FEMA regulations
FaiirPe processes all payments through RBI-authorized AD Category I banks, ensuring full compliance.
Related Terms
- FEMA — the regulation governing foreign exchange
- FIRA — the remittance certificate issued by AD banks
- Purpose Code — transaction classification codes
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