DGFT Draft SOP: NBFC Factoring IRMs

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DGFT draft SOP for reporting IRMs related to NBFC factoring transactions
DGFT's draft SOP explains how factoring-related remittances should be reported and reconciled.

DGFT Wants Your Input: New SOP for Exporters Using NBFC Factoring to Get Paid

📌 Source: DGFT, Ministry of Commerce & Industry | Date: 12 August 2026 | Trade Notice No. 20/2026-27

If you export through a factoring arrangement — meaning an NBFC (Non-Banking Financial Company) pays you upfront for your invoices and collects from the buyer later — this notice is about how that payment gets recorded, and it directly affects how fast you can self-certify your eBRC.

DGFT has issued a draft SOP for how NBFC Factors and AD-I Banks should report Inward Remittance Messages (IRMs) linked to factoring transactions. Stakeholders can send feedback to DGFT before the draft is finalised..

The short version: NBFC Factors will now use a standard SWIFT message tag — "AD-AD(P0092) EXP FACTORING PROCEED" — when remitting factoring proceeds to your bank. This is intended to prevent AD-I Banks from creating an IRM against those factoring proceeds and help exporters match the remittance with the relevant export records.

What Changes Under This SOP

eBRC self-certification only works cleanly when the remittance data matches your invoice or shipping bill. The issue is mainly about correctly identifying factoring-related remittances. The draft SOP sets out how those transactions should be identified so exporters can match the remittance details with the relevant invoice or Shipping Bill.

The draft SOP addresses this by standardising the message used for factoring proceeds before the transaction reaches the bank.

What Changes Under This SOP

ScenarioWhat Happens Now
Factor remits proceeds in foreign currencyUses standard SWIFT tag "AD-AD(P0092) EXP FACTORING PROCEED" so your AD-I Bank doesn't wrongly create a separate IRM
Factor discounts your export bill, releases funds in INRNo SWIFT message is generated. If you approach your bank asking them to create an IRM against these INR funds, they'll redirect you to the Factor instead
AD-III entities (factoring agencies) remitting fundsMust follow the prescribed process and correctly identify factoring-related transactions
eBRC self-certificationExporters can view NBFC Factor-linked IRMs directly on the DGFT portal and match them against invoice/Shipping Bill records

What This Looks Like in Practice

Example: Say you have sold an export invoice to an NBFC Factor and the Factor pays you part of the value upfront. Under the old process, the bank may not have clearly identified the incoming funds as factoring proceeds. Under the old process, your bank might not have clearly known this was a factoring proceed versus a fresh export payment — sometimes leading to confusion or duplicate IRM entries when you tried to self-certify your eBRC. Under this SOP, the Factor's SWIFT message now carries a specific tag identifying it as a factoring proceed, so your bank processes it correctly the first time, and you can match it against your Shipping Bill on the DGFT portal without having to resolve the transaction details separately with the bank..

A Related Change Worth Knowing

RBI has also notified the Foreign Exchange Management (Authorised Persons) Regulations, 2026, which expand the permitted activities of AD Category II entities to include foreign trade transactions up to ₹25 lakh per transaction. These entities may also be non-bank entities. Once RBI issues licences to applicants, these entities will also start handling reconciliation activities within the DGFT system — meaning more players besides traditional banks may soon be part of your export payment chain.

Who Should Actually Respond to This Notice

This is a draft SOP open for comments — not yet final. If you regularly use factoring to get paid for exports, or you're a bank/NBFC handling these transactions, this is your window to flag issues before the process locks in.

  • 📤 Exporters using factoring: Check if this SOP covers edge cases in your specific payment flow — especially if you use multiple Factors or mixed currency arrangements.
  • 🏦 Banking & financial institutions: Review the SWIFT tagging requirement for operational feasibility on your end.
  • 🏢 Export Promotion Councils & Commodity Boards: Consolidate member feedback before the 30-day window closes.
The bottom line: if factoring is part of how you get paid for exports, The draft SOP is aimed at making eBRC reconciliation more straightforward by helping exporters match factoring-related remittances with the relevant invoice or Shipping Bill records. But it is still a draft. Comments are open until  (30 days from 12 August), sent to ebrc-dgft@gov.in with the subject line "Comments on Draft SOP for reporting of IRMs pertaining to NBFC Factors."

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Frequently Asked Questions (FAQs)

Q1. Is this SOP already in effect?
No. This is a Draft Trade Notice. Stakeholders have been invited to provide feedback before the notice is finalised. It becomes effective only after DGFT reviews feedback and issues a final notice.

Q2. What is an IRM and why does it matter for factoring?
An Inward Remittance Message (IRM) is the remittance record used in the eBRC reconciliation process. For factoring transactions, correctly identifying the remittance helps exporters match it with the relevant invoice or Shipping Bill.

Q3. Where do I send feedback on this draft SOP?
Email ebrc-dgft@gov.in with the subject line "Comments on Draft SOP for reporting of IRMs pertaining to NBFC Factors," within 30 days of the 12 August 2026 publication date.

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Disclaimer: All information in this post is sourced from DGFT Trade Notice No. 20/2026-27 dated 12 August 2026, Ministry of Commerce & Industry, Government of India. This is a draft notice open for stakeholder comments and subject to change. This post is for informational and awareness purposes only.