What is Purpose Code P0015?
P0015 is a bank-to-bank purpose code, used when an Indian Authorised Dealer (AD) bank receives a loan or draws on an overdraft facility from a foreign bank. This is an interbank borrowing at the institutional level – distinct from corporate ECBs (P0013) or NRI deposits (P0014).
Indian banks routinely borrow from foreign correspondent banks and international financial institutions to fund trade finance, foreign currency lending, and liquidity management. When these borrowings are drawn down and the funds arrive in India, the inward remittance is classified under P0015. It is a Capital Account transaction because it represents a financial liability of the Indian bank to the foreign lender.
See all RBI purpose codes
When to Use P0015
Use P0015 when an Indian AD bank is receiving the proceeds of a loan or overdraft from a foreign bank. Common scenarios:
- An Indian bank drawing on an overdraft facility with its overseas correspondent bank to fund short-term foreign currency requirements
- An Indian bank receiving proceeds of a term loan from a foreign bank to fund its trade finance book
- A draw-down on a foreign bank line of credit extended to the Indian AD bank for nostro account funding
- An Indian bank borrowing from a multilateral institution (IFC, ADB) or foreign development bank under a wholesale credit line
- Interbank borrowing by Indian banks from foreign banks under money market or repo arrangements
Quick check:
Is the borrower an Indian AD bank receiving a loan from a foreign bank? Use P0015. If it’s a corporate (not a bank) receiving a foreign loan, that’s an ECB under P0013.
Wrong Code? Use These Instead
|
If your money is from… |
Correct code to use |
|
Indian corporate receiving a foreign currency loan (ECB) |
P0013 |
|
Non-resident placing a deposit with an Indian bank |
P0014 |
|
Indian AD bank buying foreign currency from foreign banks/central banks |
P0016 |
|
FPI investing in Indian debt securities |
P0010 |
|
Foreign bank making equity investment in Indian bank |
P0006 |
Documents to Keep Ready
|
Document |
Why you need it |
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Interbank loan / credit facility agreement |
The loan or overdraft agreement between the Indian AD bank and the foreign bank |
|
Drawdown notice / utilisation request |
Formal notification of the drawdown amount and value date |
|
SWIFT MT202 / confirmation message |
Standard interbank payment confirmation for bank-to-bank transfers |
|
RBI / regulatory approval (if required) |
Certain categories of overseas borrowing by Indian banks may require RBI approval |
|
e-FIRA |
Official proof of inward remittance tagged P0015 – used in the bank’s balance sheet and RBI reporting |
|
Board / treasury approval |
Internal sanction for the borrowing as per the bank’s risk management policy |
What is an e-FIRA – and Why Does It Matter?
An e-FIRA (Electronic Foreign Inward Remittance Advice) is the official proof that foreign money entered India. It confirms the nature and purpose of the inflow, which matters for tax treatment, FEMA compliance, and audit trails.
Your bank generates it automatically once the funds land. You can usually download it from your internet banking portal or request it at your Forex desk. The e-FIRA will reflect the correct purpose code, which your CA or accounts team will reference during filings.
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Receive Inward Remittances Compliantly with Remit Circle
Getting the purpose code right on an inward remittance isn’t just a formality, a mismatch can cause payment holds, RBI queries, or incorrect tax treatment. Remit Circle is built to handle this for you.
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Frequently Asked Questions
Q: What is RBI purpose code P0015?
P0015 is used when an Indian Authorised Dealer bank borrows from a foreign bank - receiving a loan or drawing on an overdraft facility from an overseas correspondent or lending bank. It is an interbank borrowing code and applies only when the borrower is an Indian AD bank, not a corporate entity.
Q: What is the difference between P0015 and P0013?
P0013 is for External Commercial Borrowings by Indian corporates, NBFCs, and eligible non-bank entities from overseas lenders. P0015 is specifically for Indian AD banks borrowing from foreign banks - it is an interbank transaction at the institutional level. The RBI regulates both but under different frameworks: the ECB framework for P0013 and banking regulations for P0015.
Q: Do Indian banks need RBI approval to borrow from foreign banks under P0015?
Indian banks can borrow from foreign banks within limits set by the RBI. Short-term interbank borrowings (e.g., overnight or call money from overseas) are generally within the banks' delegated authority. Longer-term or larger borrowings may need RBI approval. The RBI's guidelines on overseas borrowings by banks specify the limits and approval requirements applicable to different borrowing categories.
Q: How does P0015 relate to a bank's nostro account management?
Indian banks maintain nostro accounts (their own accounts held at foreign banks in foreign currencies) for settlement of international transactions. When a foreign bank extends an overdraft on the nostro account or provides a credit line to fund it, the drawdown is tagged P0015 on the inward side. Active nostro management often involves short-term borrowings from correspondent banks, all classified under P0015.
Q: Is P0015 used for borrowings from multilateral institutions like the World Bank or IFC?
If the multilateral institution (IFC, ADB, DEG, etc.) is acting as a direct lender to the Indian bank - not through a bond issuance - and the Indian bank is the borrower, P0015 would generally apply. If the borrowing is structured as a bond or debt security, P0007 or P0013 may be more appropriate depending on the structure. Your treasury team and AD bank compliance officers should confirm the correct classification.
Q: How is P0015 borrowing treated on the Indian bank's balance sheet and RBI returns?
Borrowings under P0015 appear as foreign currency liabilities on the Indian bank's balance sheet. They are reported in the RBI's various returns on foreign currency assets and liabilities. The bank's ALCO (Asset-Liability Committee) typically monitors foreign currency borrowings against limits and the impact on the bank's net open position and liquidity coverage.
