Authorised Dealer Code (AD Code): Meaning, Features, Examples, Format, and Application

Understanding the AD (Authorised Dealer) code is important for any business involved in international trade. This guide explains what the AD code is, why it is needed, and how to apply for it. You will learn how the AD code helps with customs clearance, ensures your business follows government rules, tracks foreign currency transactions, and makes import-export processes easier and more transparent.

What is an AD code?

An AD (Authorised Dealer) code is a 14-digit number given by a bank approved by the Reserve Bank of India (RBI). It is issued to a business for handling foreign exchange transactions. This code, which must be registered on the DGFT (Directorate General of Foreign Trade) portal, is required for customs clearance of international shipments and links the business’s import and export activities with its bank account for proper monitoring and compliance.

• Bank issuance: The AD code is issued by an authorised bank upon request by the exporter
• Mandatory for exports: It is essential for filing shipping bills and conducting export transactions through the customs portal
• DGFT linkage: The code must be registered with the DGFT to claim export incentives
• Customs verification: Helps customs track and validate export transactions

The AD code ensures compliance with regulatory requirements and facilitates smooth transactions within the import-export framework.

Example of AD code

An AD code is required for various export processes, including generating shipping bills and accessing the Indian Customs Electronic Gateway (ICEGATE) platform. For example, when an exporter files a shipping bill, the AD code is linked to verify the bank details and track foreign exchange inflows.

Practical example:

• An exporter registers the AD code issued by their bank with the ICEGATE portal
• While submitting a shipping bill, the AD code ensures the payment from the foreign buyer is credited to the correct bank account
• The customs department uses the AD code to validate the transaction and monitor compliance

This code ensures streamlined financial operations for export businesses and is mandatory for customs clearance. For more information, refer to our articles on ICEGATE and shipping bill.

• Customs clearance: The AD code is required when submitting shipping bills to customs authorities. It helps customs officials verify the legitimacy of the transaction and ensures compliance with export and import regulations.
• Foreign exchange tracking: The AD code allows for the tracking of foreign exchange transactions related to exports and imports. This helps the Reserve Bank of India (RBI) monitor the flow of foreign currency and ensures adherence to exchange control regulations.
• Regulatory compliance: The AD code ensures that businesses follow the legal requirements for international trade, helping to prevent illegal activities like money laundering and tax evasion.

Step 1: Get an AD code from your bank

• Contact an AD bank: Visit a bank authorised by the Reserve Bank of India (RBI) to handle foreign exchange.
• Submit an application: Fill out the AD code application form provided by the bank. Write a formal request letter to the branch manager and include all required business details.

Step 2: Collect the necessary documents

• Company documents:
  • Copy of your Importer Exporter Code (IEC)
  • Company PAN Card
  • GST Registration Certificate
  • Company’s cancelled cheque
  • ID proof of the Director/Proprietor/Partner
  • Class 3 Digital Signature Certificate (DSC)
• Bank document:
  • Bank Certificate (if required by your bank)

Step 3: Get the AD code letter

• After submitting your form and documents, the bank will check and verify them.
• Once approved, the bank will issue an official AD code letter on its letterhead. You’ll need this letter for the next step.

Step 4: Register your AD code on ICEGATE

• Log in to the ICEGATE portal.
• Go to the “Bank Account” section and choose “Foreign Remittance Account (Authorised Dealer Code)”.
• Click “Add New Bank Account”, enter your details, choose your customs location, and upload the AD code letter from your bank.
• Submit the information to complete your AD code registration.

The AD code is an integral part of India’s import-export framework, facilitating customs clearance, foreign exchange monitoring, and access to export incentives. Businesses must ensure accurate registration and compliance to streamline their international trade operations.

For exporters facing financial challenges, securing a business loan can help maintain cash flow and manage operations effectively.

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