Streamlining IEC Applications with NPCI-Based Bank Account Validation

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, Government of India, has introduced a significant update to the Importer Exporter Code (IEC) application and modification process. Effective February 2026, DGFT has implemented integration with the National Payments Corporation of India (NPCI) for real-time validation of bank account details. This move aims to enhance the authenticity and efficiency of the IEC ecosystem, ensuring a seamless and trusted trade facilitation framework.

What is IEC and Why is Bank Account Validation Important?

The Importer Exporter Code (IEC) is a mandatory business identification number required for any entity involved in import or export activities in India. It is issued by DGFT and serves as a key document for international trade. Accurate bank account details linked to IEC are crucial for financial transactions, compliance, and transparency in trade operations.

To strengthen the IEC ecosystem, DGFT has now integrated its systems with NPCI, enabling real-time validation of bank account details provided during IEC issuance or modification. This ensures that the bank accounts linked to IEC are authentic and correctly matched with the applicant’s PAN and name as per bank records.

Key Features of the NPCI-Based Workflow

The NPCI-based workflow introduces a fully digital and automated process for validating bank account details. Here are the highlights of the revised system:

Declaration of Active Bank Accounts: Applicants must declare all active bank accounts linked to their PAN during IEC application or modification.
Real-Time Validation: Bank account details are transmitted to NPCI for validation, ensuring accuracy and authenticity.
Automatic Processing: Applications are processed based on the validation status received from NPCI, which can be “Success,” “In Progress,” or “Failed.”

Revised Workflow for IEC Applications and Modifications 

The updated process for IEC applications and modifications is as follows:

1. Application Type: Apply for IEC / Modify IEC 

Validation Status: Success (for all bank accounts)
- The application proceeds as per the normal workflow.

2. Validation Status: In Progress (none of the validations fail) 

The application is placed under automatic review.
It is auto-approved upon successful validation.
If validation fails, the application is marked as rejected.

3. Application Type: Modify IEC 

Validation Status: In Progress (none of the validations fail)
- The application is placed under automatic review.
- It is auto-approved upon successful validation.
- If validation fails for any bank account, the application is marked as “Deficient.”
- The applicant must modify the bank account details and respond to the deficiency.
- If validation fails again, the application will be rejected.

4. Validation Status: Failed (for any bank account) 

Applications for IEC issuance or modification cannot be submitted until correct bank details are provided.

Periodic Updates for “In Progress” Status 

For applications with a validation status of “In Progress,” the system will periodically fetch updated status from NPCI. This ensures that the process remains dynamic and applicants are informed of the latest validation results.

What Should Stakeholders Do? 

To ensure smooth processing of IEC applications and modifications, stakeholders are advised to:

Verify the correctness of bank account details.
Ensure that PAN, name, and bank account details match the records maintained by the bank.
Address any discrepancies before submitting IEC applications or modification requests.

In case of difficulties during submission or updates, stakeholders can reach out to the DGFT Helpdesk for assistance.

Conclusion

The integration of NPCI-based bank account validation into the IEC application process is a significant step towards digitization and transparency in India’s trade ecosystem. By automating the validation process, DGFT aims to reduce errors, enhance trust, and streamline trade operations for exporters and importers. This initiative reflects the government’s commitment to leveraging technology for ease of doing business and fostering a robust trade environment.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: DGFT

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