P0022 Purpose Code: Receipts on account of other investment in ADRs/GDRs

Purpose code P0022 is used when money comes into India from investment in American or Global Depositary Receipts backed by shares in an Indian company.

What is the P0022 purpose code?

Purpose code P0022 covers money entering India from investment made through depositary receipts. An ADR or GDR is an instrument issued and traded on an overseas market that represents shares in an Indian company, letting foreign investors take exposure without dealing on Indian exchanges directly. The money reaches India when the receipts are issued and the proceeds are remitted to the company, which is what this code records rather than any later trading in the receipts abroad. Under RBI FEMA guidelines, this inward payment is classified under Capital Account and reported accordingly.

When to use P0022 purpose code?

Use P0022 when investment made through an ADR or GDR programme is remitted into India. It is the correct RBI receipt code for depositary receipt inflows, as opposed to money invested directly into the company's shares. The instrument the foreign investor actually bought is what settles the code, not the fact that Indian equity sits underneath it.

When to use a different code:

• Use P0009 when the money is foreign portfolio investment made directly in Indian equity shares
• Use P0006 when the money is foreign direct investment in India in equity
• Use the matching S-code when you are sending money abroad rather than receiving money

Who typically uses P0022 purpose code

Indian listed companies that have raised money abroad through a depositary receipt programme, together with the depositary and AD banks that handle and report the proceeds. This is a narrow, company-level code, since running an ADR or GDR programme is something only a small number of large Indian issuers do.

Examples of transactions covered under P0022 purpose code

• Proceeds remitted to an Indian company after an issue of American Depositary Receipts
• Money received in India from a Global Depositary Receipt offering made on an overseas exchange
• Funds transferred to the Indian issuer following a further tranche under an existing depositary receipt programme
• Investment proceeds routed to India through the depositary bank administering the programme

When NOT to use P0022 purpose code

• The foreign investor bought Indian equity shares directly rather than depositary receipts (use P0009)
• The money is foreign direct investment into the company's equity rather than a depositary receipt inflow (use P0006)
• The money is dividend or other income on the underlying shares rather than investment coming in, which reports under the income codes
• You are sending money abroad rather than receiving (use the matching S-code)

Documents required for P0022 purpose code

To receive a payment under P0022, keep the following documents ready so your bank can verify the transaction and report it correctly under FEMA.

How is a P0022 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Complete the issue: The depositary receipts are issued on the overseas market against shares in the Indian company.
2. Receive the proceeds: The depositary remits the money raised into the company's Indian bank account.
3. Declare the purpose: State the purpose of the inward remittance on your bank's form.
4. Submit supporting documents: Provide the issue documents, the depositary confirmation, and KYC so the bank can verify the transaction.
5. Get your FIRA: Once processed, your FIRA is issued as proof and the payment is reported under FEMA.

Common mistakes to avoid while using P0022 purpose code

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Coding it as direct equity investment: Using P0009 or P0006 because Indian shares sit underneath the receipts, when the investor bought depositary receipts rather than the shares themselves.
2. Mixing proceeds with income: Applying P0022 to dividends or other income on the underlying shares, when this code records investment coming in rather than returns going out.
3. Code and document mismatch: The code not matching what the issue documents describe, which flags the payment.
4. Incomplete documents: Missing the depositary agreement or the depositary bank's confirmation, so the bank holds funds until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an inward code for an outward payment: Applying a receipt code to money you're sending out instead of the matching outward code.

How Skydo helps you receive international business payments

P0022 covers capital account transactions, which Skydo does not process. If you also invoice foreign clients for goods or services, here is how Skydo helps you get paid.

1. Complete onboarding: Share PAN, Aadhaar, and Indian bank details. Setup is fully online.
2. Get virtual account details: Receive account details in USD, GBP, EUR and other currencies your clients pay in.
3. Your client pays like a local: They send a domestic transfer in their own country, no SWIFT and no wire fee on their end.
4. FIRA is generated automatically: Free e-FIRA on every payment, stored in your dashboard for GST and audits.
5. INR settles within 24 hours: Mid-market rate with a flat, visible fee, no FX markup.