CBIC Automates IFSC Code Registration to Boost India’s Trade Facilitation

Posted by Written by Dezan Shira & Associates Reading Time: 3 minutes

India’s indirect tax and customs board, CBIC, has introduced an automated approval system for IFSC and bank account registration under Customs, streamlining export processes, reducing manual checks, and enhancing ease of doing business for Indian exporters.

The Central Board of Indirect Taxes and Customs (CBIC) has rolled out a system-based automatic approval mechanism for registering Indian Financial System Codes (IFSC) and incentive-linked bank accounts under the customs system. As per the Union Ministry of Finance, the update aims to streamline export-related processes, reduce manual intervention, and improve the ease of doing business for Indian traders.

What’s new in the automated approval system

Find Business Support
Need Help with Trade Compliance in India? Explore how DSA can support

With the new auto-approval mechanism, CBIC has eliminated repetitive manual checks across multiple customs locations. The system will now automatically approve registration requests for the same bank account and IFSC combination linked to an Importer Exporter Code (IEC) if it has already been approved at any one customs port.

Key operational highlights include:

  • The workflow for submission remains the same on the ICEGATE portal.
  • Manual verification by port officers is no longer required for repeated registrations.
  • The system will continue to validate all approved bank account details through the public financial management system (PFMS) to ensure accuracy and authenticity.

This automation marks a shift toward data-driven interoperability across customs systems, ensuring quicker turnaround times.

Key benefits for exporters

The system-based auto-approval mechanism is expected to deliver several operational advantages:

  • Faster processing of bank account and IFSC registration requests.
  • Uniform approval process across multiple customs locations.
  • Timely credit of export incentives, including integrated goods and services tax (IGST) refunds and duty drawbacks.
  • Lower compliance costs and reduced administrative burden.
  • Improved trade facilitation, in line with India’s digital transformation goals.

ALSO READ: Transshipment and Due Diligence in India’s Trade Compliance Landscape

Background

Related Reading
Navigating India’s Export-Import Landscape: Customs, Trading, and Industrial Clusters

Exporters are required to register their authorized dealer (AD) code and IFSC details on the ICEGATE portal to receive export-related incentives such as IGST refunds, duty drawback, and rebates directly into their declared bank accounts.

As per Instruction No. 25/2023-Customs (dated July 28, 2023), exporters can register their incentive bank accounts for each port via ICEGATE. Applications submitted before 2 PM IST are processed on the same day, while those submitted later are processed by 2 PM IST the next working day.

Previously, exporters had to seek approval for the same IEC and bank account-IFSC combination at every customs port, resulting in duplicated efforts and delays in receiving incentives.

CLICK HERE TO READ MORE: Free Trade Warehousing Zones in India

Towards a more efficient customs ecosystem

The automation has been implemented through the ICEGATE platform. By minimizing bureaucratic touchpoints and standardizing processes across ports, the reform supports India’s broader objective of enhancing export competitiveness and advancing digital customs modernization.

Industry experts view the initiative as a technology-driven reform that can further strengthen operational efficiency and accelerate incentive disbursals. It also reflects India’s goal of improving the ease of doing business and fostering a more supportive environment for exporters.

Understanding the IFSC code

The IFSC is an 11-character alphanumeric identifier assigned to each bank branch that participates in India’s electronic payment systems. It plays a vital role in enabling online fund transfers through National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement (RTGS), and Immediate Payment Service (IMPS), ensuring accuracy and efficiency in routing transactions.

In the context of customs operations, the IFSC code is critical for processing duty payments, refunds, and export–import-related financial transactions, ensuring that funds are credited or debited to the correct bank branch.

Structure of the IFSC code

The IFSC follows a standardized format consisting of three distinct parts.

Component

Description

Example

First 4 characters

Represent the bank code (alphabetic)

SBIN

5th character

Always a ‘0’ (reserved for future use)

0

Last 6 characters

Denote the unique branch code (alphanumeric)

001234

Example: SBIN0001234

This structure helps uniquely identify every participating branch across the Indian banking network, supporting seamless and secure electronic transactions, including those linked to customs and trade activities.

About Us

India Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Delhi, Mumbai, and Bengaluru in India. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Vietnam, Indonesia, Singapore, Malaysia, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.

For a complimentary subscription to India Briefing’s content products, please click here. For support with establishing a business in India or for assistance in analyzing and entering markets, please contact the firm at india@dezshira.com or visit our website at www.dezshira.com.