An AD bank is a bank that RBI has authorised to deal in foreign exchange, and "Category-I" is the full licence that covers exports, imports and inward remittances. For a service exporter, your AD bank is normally the bank where your foreign client's money lands, and it is the bank that receives your EDF, records it in RBI's monitoring system and closes it once you are paid.
Key takeaways
- AD stands for Authorised Dealer; Category-I banks can handle the full range of foreign exchange business.
- Most scheduled commercial banks with a current account offering are AD Category-I banks.
- Under the 2026 Regulations, service exporters outside an SEZ file their EDF with the AD bank.
- Each AD branch handling exports has an AD code, which is different from IFSC and SWIFT codes.
- The AD bank enters your EDF into EDPMS within five working days and matches incoming payments to it.
The plain meaning
Foreign exchange in India is regulated under FEMA. Ordinary people and businesses cannot simply trade currencies or receive export payments however they like; transactions go through entities RBI has authorised. Banks with the broadest authorisation are called Authorised Dealer Category-I banks, usually shortened to AD banks.
In daily life you rarely think about it. When a US client wires USD 5,000 to your current account, your bank converts it, issues a FIRA or advice showing the purpose code, and credits rupees. It can do that because it is an AD bank.
Why the AD bank matters more from October 2026
Under the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, the AD bank became the central point of contact for most service exporters.
| Exporter type | Who receives the EDF |
|---|---|
| Services other than software, outside an SEZ | AD bank |
| Software, outside an SEZ | AD bank or STPI (AD banks are now specified authorities on par with STPI) |
| Any unit in an SEZ | SEZ Development Commissioner |
For software firms this is a real change. Previously SOFTEX forms often went through STPI. Now an AD bank can receive the same declaration directly, and STPI certification is no longer mandatory. Our article on STPI after SOFTEX explains what software parks still do.
What your AD bank does with your export
Think of the AD bank as RBI's local monitor for your exports. The sequence goes like this:
- You submit the EDF, listing each invoice raised in the month.
- The bank enters it into EDPMS (Export Data Processing and Monitoring System) within five working days, as Regulation 18 requires.
- Your client pays. The money arrives through SWIFT, SEPA, ACH via a virtual account, or a platform payout.
- The bank matches the payment to the right invoice entry.
- The entry closes. For invoices up to ₹10 lakh this can happen on your declaration of realisation; above that, the bank uses the invoice, payment evidence and your matching instructions.
- eBRC. Once realisation is matched, an electronic Bank Realisation Certificate can be generated.
The bank also has discretion. It may accept a delayed EDF for reasonable cause and may extend the nine-month realisation period on a reasoned request.
Category-I versus other categories
RBI uses other categories for narrower roles, such as money changers and entities handling limited types of transaction. For exporters, the distinction is simple: you need a Category-I bank, because only that licence covers export receipts and EDF processing. If you bank with a large public or private sector bank, it almost certainly holds Category-I authorisation. A small cooperative bank may not, so check before routing export receipts there.
The AD code: your branch's export identity
Every AD bank branch that handles export transactions has an AD code. The EDF asks for it in field 1.6.
| Code | What it identifies | Used for |
|---|---|---|
| AD code | The AD bank branch for export transactions | EDF, export reporting |
| IFSC | A bank branch for domestic transfers | NEFT, RTGS, IMPS |
| SWIFT/BIC | A bank for international messaging | Receiving foreign wires |
These are three different codes and people mix them up constantly. Ask your branch for the AD code in writing; our AD code request letter gives you a ready format. The glossary entry on AD code has the short version.
Choosing and using your AD bank
Most exporters do not consciously choose an AD bank; they simply use the bank where their current account sits. That works well, provided a few things are true.
Money and EDF go to the same bank. The EDF should go to the bank where the foreign payment for those invoices is received, because that is where matching happens. If clients pay into two banks, you may end up dealing with two AD banks.
The branch knows you export. Tell your relationship manager that you invoice foreign clients and ask how the bank accepts EDFs. Under Regulation 19, every bank must publish its own acceptance policy, and the channel differs: some use branches, some email, some a net-banking trade portal.
You keep the paper trail. Save FIRAs, SWIFT advices and acknowledgements of every EDF you submit.
Consider Vellore Edtech LLP, which receives most of its payments into an ICICI current account but has one Australian client who pays into a Kotak account opened years ago. Its October 2026 invoices are seven to ICICI-paying clients and one to the Australian client. The cleanest approach is to ask the Australian client to switch to the ICICI account. Failing that, Vellore should ask both banks how they want the invoices declared before it files. Our article on using multiple banks for exports covers this in more depth.
This is general information, not legal or tax advice. If your structure is unusual, talk to your bank's trade desk or your CA.
Frequently asked questions
What is the meaning of AD bank in exports?
An AD bank is an Authorised Dealer Category-I bank licensed by RBI to handle foreign exchange transactions, including export receipts. For service exporters it is usually the bank where foreign payments land, and it receives and processes the EDF.
Is my regular current-account bank an AD bank?
If it is a major public or private sector bank, it very likely is. Ask the branch whether it is an AD Category-I bank and which branch holds the AD code for your account. Smaller cooperative banks may not be authorised.
Is the AD code the same as the IFSC?
No. The IFSC identifies a branch for domestic transfers, the SWIFT code identifies a bank for international wires, and the AD code identifies the branch for export transactions. The EDF asks for the AD code specifically.
Can I file my EDF with any AD bank?
The EDF should normally go to the bank that receives the foreign money for the invoices declared, because that bank matches payments against the entries. If payments come into more than one bank, ask each how to handle it.
Does the AD bank charge for processing the EDF?
Banks set their own charges and publish their own policies. Check your bank's schedule of charges or ask your relationship manager rather than assuming a fee or no fee.
Bottom line
Your AD bank is the bank that sees both sides of your export: the declaration going in and the money coming back. Find its AD code, confirm how it accepts EDFs, and route payments there consistently. Then prepare the form 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.