What Is Local Collection Account?

Most clients find it easiest to pay a local account. A local collection account gives you account details that look local to them, such as a domestic account number and bank code. The client makes a normal domestic transfer, for example by ACH in the US, SEPA in the euro area or Faster Payments in the UK. The issuer receives the money, then sends it on to your account in India, usually after converting it to rupees. The local transfer is only the first leg. The payment still has to reach an Indian bank and be recorded as an inward remittance. You can read more about the main rails on the local collection accounts page.

For example, a UK client of an Indian illustrator would rather not pay an international wire fee. The illustrator shares a GBP account number and sort code from her provider. The client pays by a domestic UK transfer, and the provider forwards the amount to the illustrator's Indian bank account.

• Cost: A domestic transfer is often cheaper for the client than an international wire. The total cost to you still depends on the exchange rate and any fees on the second leg. See FX markup.
• Speed: A local transfer can be quick, but the second leg to India has its own timeline. Ask the provider about both.
• FEMA: Export proceeds must be realised within the period set in Regulation 5 of the FEMA Export and Import Regulations, 2026. Check with your AD bank how a payment collected locally is recorded against your export entry.
• GST: A supply is an export of services under section 2(6) of the IGST Act only if payment is received in convertible foreign exchange, or in rupees where RBI permits. Keep the remittance advice for the final credit.
• Bank compliance: The AD bank that credits you can ask for the invoice and purpose of the payment, whatever route the money took.

The client pays the local account. The issuer then settles the amount to you through an Indian AD bank.

1. You ask your bank or provider for local account details in the client's currency.
2. You put these details on your invoice with your name as beneficiary.
3. The client pays them through a domestic transfer in the client's country.
4. The issuer receives the funds and matches them to you, often through a virtual account number.
5. The issuer sends the funds to your Indian bank account, converting to rupees where needed.
6. Your AD bank credits you, records the inward remittance and can issue an advice.

You use it by sharing the local details on your invoice and checking the second leg to India before relying on it. Terms vary by provider and bank.

1. Confirm the currency and country of the account you need, based on where your client banks.
2. Check who issues the account and whether the final credit reaches an Indian AD bank.
3. Ask for the fee schedule, the exchange rate method and the expected time for both legs.
4. Put the account details on the invoice exactly as issued.
5. Download the remittance advice for the final credit in India and file it with the invoice.
6. Review the total cost on a sample payment before you move all clients to the account.

A wire transfer is a single international payment from the client's bank to yours. A local collection account splits the journey into a local transfer and a second transfer to India.

• Same as a wire: The client pays locally, but the payment still has to reach India as an inward remittance.
• No FEMA rules: The final credit follows FEMA like any export receipt. Ask your AD bank how it is recorded.
• Always free: The second leg and currency conversion can carry charges. Compare the amount you receive.
• Only banks offer it: Some regulated non-bank entities also offer them. Ask about the issuer and the Indian AD bank.
• Holds your money: The details are for receiving and passing on funds. Ask whether balances can be held and for how long.

• Virtual account: A unique account number linked to a real account, used to identify each payer.
• Nostro and vostro accounts: Accounts banks hold with each other to settle cross-border payments.
• FX markup: The margin added to the exchange rate when converting foreign currency.
• SWIFT MT103: The SWIFT message format used for a single customer credit transfer.
• FIRA: A bank advice confirming that a foreign payment was credited to your account.
• EEFC account: A foreign currency account in India for eligible exporters.

Every rule and definition on this page is linked to its official source, checked on the dates below.

1. RBI, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB), Regulation 2(1)(b) and Regulation 5 (checked 9 Oct 2026)
2. IGST Act, 2017, Section 2 (Definitions), Section 2(6), export of services (checked 9 Oct 2026)