The Role of Banks in the AD Code Registration Process

The RBI’s authorized banks serve as the mediator between the customs department and exporters. In short, the role of the banks is central as they are responsible for issuing the AD code certificate. During the AD code registration in India, banks play a crucial role. Imagine you are operating a specific footwear exportation. With a BIS license, you are also required to obtain an Authorized Dealer Code before starting exportation. In this situation, the banks that connect export-export dealings with the business’s current account. Through this guide, we will discover the roles of RBI’s authorized banks and why they are important for AD code bank account registration. 

What are the AD Code Certificate Features?

The role of banks is central to the AD Code registration process in India, as they are the entities authorized to issue this critical identifier to exporters. The AD Code, or Authorized Dealer Code, is a 14-digit unique code that links an exporter’s bank account to their foreign exchange transactions, enabling them to conduct international trade legally and smoothly.

• Access for International Trade: With the process of AD registration certificate apply online, the business gets authorization to conduct global trade. It serves as the individual detector issued by the bank. 
• Role of AD Code: Obtaining the authorized code means streamlining the customs clearance process as well as linking foreign exchange transactions. Banks connect the current banks of exporters with foreign exchange transaction activities.
• AD Code Format: The authorized dealer code contains a 14-character alphanumeric code.
• Approval  Authority: Authorized banks are the primary ones who issue the AD code registration certificate in a format structured by the Directorate General of Foreign Trade (DGFT). 
• Mandatory for Exporters: The code is mandatory for those who deal with export-import internationally. It is an essential element for smooth export operations.

The Importance of AD Code for Exporters

To generate the shipping bill on ICEGATE, customs clearance is important. If an exporter trades without an authorized dealer code, they an face the challenges. In the end, you will not get clearance from the customs department without this mandatory code. This element’s other function is to link the exporter’s current bank account with foreign exchange activities. It ensures that all export deals are routed through the right banking channel. 

How Banks Facilitate AD Code Registration?

The role of banks is not limited to as an intermediary, but they are more than that. Their major working function is to conduct verification, issue an AD code letter, and support the exporters for international trade. In detail:

Why Choosing the Right Bank Matters?

Not all banks offer the same level of services as provided by RBI’s authorized banks. The authorized banks are responsible for handling the AD code for import-export business.  The businesses should prefer banks that:

• They are approved by the RBI and negotiate in foreign exchange
• Have a strong trade finance history
• Responsible for providing support for the AD code registration process in ICEGATE
• Must update you time-to-time on regulatory changes

The Authorized Dealer Category-I Banks by the RBI

The Reserve Bank of India (RBI) has categorized a certain bank that deals in foreign exchange transactions under Category I. The banks under the AD Category-I are described as the highest authorized dealers for foreign transactions. The top ten banks that are authorized by the RBI are:

1. State Bank of India (SBI)
2. HDFC Bank
3. ICICI Bank
4. Axis Bank
5. Punjab National Bank (PNB)
6. Bank of Baroda
7. Canara Bank
8. Union Bank of India
9. Kotak Mahindra Bank
10. IndusInd Bank

User Query: AD Code Registration for New Export Houses

Final Thoughts  | AD Code for Import-Export Business

The AD code consists of more than just a single digit. This code is the golden key to unlock international market opportunities. In the journey of AD code registration, the banks serve as the primary gatekeeper who streamlines the process. Banks ensure that exporters align with specific foreign trade policies before registration. Ensure a seamless registration process for bank accounts related to AD codes with the expertise of LegalRaasta professionals. Our professionals assist you step-by-step to avoid delay or rejection. 

Check out our FAQs to quickly find answers and save time on support

1. What is the role of AD Banks?

Ans. The RBI’s authorized banks work as intermediaries between the sellers and buyers. It handles the foreign exchange currencies through a legal channel.

2. What is the procedure to acquire the AD code from the bank?

Ans. Visit to current bank and submit the required letter to obtain the AD code. 

3. What are the AD code registration fees?

Ans. There are no government fees included for the registration of the AD code. However, the exporters might need to pay professional fees for the service.

4. Who are AD category-1 banks?

Ans. RBI authorized several banks under the AD category I that have the power to conduct all types of foreign exchange.

5. Is AD code required for renewal?

Ans. No, the exporters don’t need to renew the AD code as it is valid for a lifetime. However, when an exporter converts or changes its bank, required to re-register for the AD code.