You can move your export business to a different AD bank, but you cannot just open a new account and forget the old one. Every invoice already declared on an EDF sits as an entry in EDPMS against the bank you filed with, and those entries still need to be closed. A clean switch means planning the cut-over date, telling clients the new bank details at the right moment and agreeing with both banks how the leftovers will be handled.
Key takeaways
- Your AD bank is normally the bank where the foreign money lands. Change where clients pay, and your AD bank for new invoices changes too.
- Open EDPMS entries filed with the old bank do not move automatically. Ask both banks how they want them dealt with.
- Pick a clean cut-over month. Invoices dated before it go to the old bank; invoices dated after it go to the new one.
- Do not close the old account until every open entry has been realised and closed, or until both banks confirm another arrangement.
- Get a new AD code from the new branch before you file your first EDF there.
Why exporters switch banks
The reasons are usually commercial: a better forex rate, lower charges, a relationship manager who actually answers, a bank that accepts EDFs through a channel that suits you, or simply a move to a new city. Sometimes an investor or parent company wants all accounts consolidated with one bank.
None of these is a regulatory problem. FEMA does not lock you into one AD bank. What it does require is that each export is declared and tracked until the money comes in, and that tracking lives with a specific bank.
What actually stays with the old bank
When you file an EDF, the bank enters it into EDPMS within 5 working days. From then on, that bank expects to see the matching inward remittance, or a declaration that it has been received, before it closes the entry. For invoices up to ₹10 lakh, the bank may close the entry on your declaration that the money has been realised. Above that, it typically wants the invoice, payment evidence and matching instructions.
So if you switch banks while clients still owe you money on old invoices, you have a mismatch: the EDF is with Bank A, but the money may end up at Bank B. That is the core issue to plan around.
Whether an open entry can be transferred from one AD bank to another, and how, is something you need to ask both banks. Each bank publishes its own policies on how it accepts EDFs, and the handling of transfers is not something we can describe uniformly. Do not assume either way.
A sensible switching plan
| Step | When | What to do |
|---|---|---|
| 1 | Two months before | Open the current account at the new bank, complete KYC, get the AD code |
| 2 | Two months before | List every open export invoice: date, client, amount, EDF month, due date |
| 3 | One month before | Meet both banks; ask how open entries should be handled after the switch |
| 4 | Cut-over month | Change bank details on all invoices dated from the 1st of that month |
| 5 | Cut-over month | Email clients the new details with a clear effective date |
| 6 | Following months | File EDFs for new invoices with the new bank; keep chasing old invoices into the old account |
| 7 | Once old entries close | Close the old account with a closure letter and a no-dues confirmation |
The cleanest arrangement is usually to let old invoices be paid into the old account and new invoices into the new one, running both accounts in parallel for a few months. That keeps each EDF matched to the bank that holds it.
Worked example
Tarn Digital Pvt Ltd, a Jaipur agency, banks with Bank A and decides to move to Bank B from 1 January 2027.
On 15 November 2026 it lists its open invoices:
- October 2026: three invoices totalling USD 21,000, on the October EDF filed with Bank A. One has been paid.
- November 2026: two invoices totalling EUR 9,400, to go on the November EDF (due 30 December 2026) with Bank A.
- December 2026: invoices still to come, also for Bank A.
Tarn's plan:
- Opens the Bank B account in November and gets its AD code in writing.
- Keeps Bank A's details on all invoices dated up to 31 December 2026.
- From 1 January 2027, every invoice carries Bank B's details. The January EDF, due 2 March 2027, goes to Bank B.
- Writes to every client in mid-December: "For invoices dated on or after 1 January 2027, please pay to the new account below. Earlier invoices remain payable to our existing account."
- Keeps Bank A open until the last 2026 invoice is realised and closed, around mid-2027 at the latest given the 9-month realisation window.
When one client mistakenly pays an October invoice into Bank B, Tarn tells both banks immediately and asks how to match it. That is the exception you will almost certainly hit, and early disclosure is the fix.
The letters you will need
Switching banks generates paperwork. These templates cover most of it:
- AD code request letter for the new branch
- Bank account closure letter for the old bank, once entries are clear
- No dues certificate request to confirm nothing is outstanding
You may also need a board resolution for the new account and updated authorised signatory details. Your new bank will tell you exactly what it needs for account opening.
Things that commonly go wrong
Clients pay the wrong account. Some clients store your bank details once and never look again. Repeat the change in invoice footers, emails and payment reminders for several months.
The old account gets closed too early. If an old client pays after closure, the money may bounce or take weeks to trace. Keep the old account until you are sure.
Purpose codes change. A new bank may tag remittances differently. Check the first few FIRAs from the new bank and request a correction if the purpose code is wrong.
Different EDF channels. Your old bank may have taken EDFs by email; the new one may want them through a trade portal or at the branch. Ask on day one.
This is general information, not legal or tax advice. If you have a large book of open receivables, involve your CA in planning the cut-over.
Frequently asked questions
Can I have two AD banks at the same time?
Yes. Many exporters use more than one bank. Each bank handles the EDFs for exports whose proceeds it receives, so you may file one EDF per bank each month. Keep your records clear about which invoice went to which bank.
Will my open EDPMS entries transfer to the new bank automatically?
Do not assume they will. Entries are created by the bank you filed with. Ask both banks how open entries should be handled; the simplest approach is often to let old invoices be paid into the old account until they close.
Do I need a new AD code when I change banks?
Yes. The AD code identifies the bank branch handling your export transactions. Get it from the new branch before filing your first EDF there. It is different from IFSC and SWIFT codes.
What if a client pays an old invoice into my new bank account?
Tell both banks promptly, with the invoice and EDF details, and ask how they want it matched. Keep the FIRA from the new bank. Early disclosure makes the reconciliation far simpler.
When can I safely close my old export account?
Once every EDPMS entry filed with that bank is realised and closed, or once both banks have confirmed another arrangement in writing. Ask for a no-dues confirmation before you submit the closure letter.
Bottom line
Changing your AD bank is routine if you treat it as a planned cut-over, not a one-day event. Get your new AD code first, then generate your first EDF for the new bank with the free EDF form generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.