ORM (Outward Remittance Message) is an electronic record used by Indian banks to report payments made to overseas suppliers or other foreign beneficiaries. It contains details such as the amount, currency, beneficiary, and purpose of the payment.
ORM is mainly used to track and monitor foreign exchange payments related to imports and other eligible transactions. For import transactions, the ORM can be linked with the relevant import data in the banking system to help confirm that the overseas payment has been properly accounted for.
How It Works:
- The importer makes an overseas payment.
- The bank processes the remittance.
- ORM is generated for the payment.
- Payment details are recorded.
- ORM is matched with the relevant transaction.
Benefits:
- Tracks overseas payments
- Supports import compliance
- Helps reconcile payments
- Maintains a clear transaction record
Example:
An Indian importer pays $25,000 to a supplier in Japan. The bank records the payment through an ORM, which can be linked to the related import transaction.