Receiving Emergent Ventures Grant Money in an Indian Bank Account
Winning an Emergent Ventures grant is the hard part. Getting the money into an Indian bank account should be easy, but it comes with one step most grantees are not ready for: the purpose code.
EV pays from abroad, so the money arrives in India as a foreign inward remittance. Before your bank credits it, the bank asks you which RBI purpose code describes the payment. Pick the wrong one and the credit gets held up, or your bank calls you to ask again.
What happened when I received mine
I received my grant in August 2023 as part of the 5th cohort of EV India. The grant funded my podcast, to make more episodes and better ones. I took it into my personal savings account.
When the bank asked for a purpose code, I asked a fellow EV India grantee what they had used. Their answer was P1302, "Personal gifts and donations". They had received their grant in their personal account under that code with no trouble.
My bank rejected it. Two days later the branch called to say P1302 only applies when an individual, such as a relative, sends the money. EV is an organisation, so the code did not fit. We went back to the RBI purpose code list and looked for something closer to what the money was actually for.
Best practices
- Use your personal account. An individual grant can go straight into your own savings account. You do not need a company or a separate account for it.
- Don't default to P1302. It is the code grantees reach for first, but banks can reject it because the sender is an organisation, not a person.
- Choose the code by what the money pays for. The bank wants the code that best describes the purpose of the remittance. These are the ones worth discussing with your bank:
- P1101 - Audio-visual and related services. Fits podcasts, video, film and other media projects.
- P1099 - Other services not included elsewhere. The general fallback when nothing else fits.
- P0029 - Capital transfer receipts, including investment grants from non-government bodies. Closest to "grant" in the list, but marked "exceptionally", so expect questions.
- P1302 - Personal gifts and donations. Only if your bank accepts it from an organisation.
- Agree the code with your bank before the money lands. Call your branch or relationship manager when EV confirms the transfer. Tell them who is sending it and what it is for, and settle the code then.
- Keep the paperwork handy. Have your EV award email and the RBI purpose code list ready. Your bank's own inward remittance form may use a slightly different version of the list.
- Expect a call. A first foreign credit often triggers a check from the bank. Answer quickly and the money clears quickly.
A word on tax
The purpose code is not just a bank formality. A gift code and a services code can be treated differently for income tax, so the code you pick can change how the grant is taxed. Talk to your CA before you choose, and keep a record of what you told the bank.
This post is based on my experience in 2023. Banks and RBI rules change, so check the current position with your bank. None of this is tax or legal advice.