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FPS Section

Officer In-charge:      Shri Anurag Sikka, Senior Accounts Officer
Intercom No.:             115           Email id: fps[dot]pcdand[at]nic[dot]in

This Section deals with the following:


  1. Scrutiny of contracts related to procurement from foreign countries concluded by Ministry of Defence and headquarters of three services as well as Coast Guard and Joint Staff.
  2. Payment to foreign vendors as per the terms and conditions of the contracts- either through Letter of Credit (LC) or Direct Bank Transfer (DBT).
  3. Release of Deferred payments to Russia under agreement with erstwhile USSR.
  4. Adjustment of debit advices received from various banks and booking of expenditure to relevant code heads.
  5. Scheduling of invoices/receipt certificates to concerned PCsDA/CsDA for verification of ledger charge.

Frequently Asked Questions (FAQs):

Q. What is a Letter of Credit?

. A Letter of Credit is a written undertaking given by a bank on behalf of the buyer (Applicant) of goods or services to pay the seller (Beneficiary) of goods and services, a certain sum of money, provided he presents the documents stipulated in the credit within the validity of the credit.

Q. Please define the types of LC?

(i) Revocable LC    (ii) Irrevocable LC    (iii) Confirmed LC
        (iv) Revolving LC

Q. What are the documents to be enclosed with Advance Payment Case?

. The contract should contain the provision of advance payment.  Advance payment case has to be submitted to this office along with advance payment sanction by CFA (ink signed copy) advance bank guarantee (in case of waiver of same, the sanction by Defence Secretary to the effect may also be enclosed), Form 1A (in case of procurement cases), Form 2A (in all cases other than procurement) FEMA certificate and FFE release proforma.

Q. What are documents required for opening of LC?

. Contract (in original), Sanction by CFA (ink signed copy), Form-2 (Swift-700), Form-1A, Annexure-D, FEMA certificate, FFE releasing/ Noting, Forwarding memo.

Q. What are the documents required for Direct Bank Transfer cases?

Contract (in original), Sanction by CFA (ink signed copy), Form-2 (Swift-700), Forma-IA, Annexure-D, FEMA certificate, FFE releasing /Noting, Forwarding memo, invoices, airway bill, packing list and other documents as per Contract.

Q. How are amendment/ extension of LC carried out?

Directorate will prepare the case for amendment /extension duly supported by attested copies of CFAs approval, clearly specifying as to who will bear charges for the same.   

Q. What happens if delivery period expires and goods are not delivered?

. Directorate will propose the case for extending the Delivery Period duly supported by CFAs approval Such DP should clearly mention as to the same with Liquidated Damage or without LD. For cases without LD, the concurrence of IFA/MoD (F) needs to be obtained.

Q. What is the system of accounting?

. Accounting of the LC case will be made through booking of debit advice received from bank as class –I punching medium. In the cases of DBT, the class-I Voucher will be prepared at the time of authorizing the payment at the rate given in the FFE noting, after receiving the DA from the Bank the difference will be booked through class-II Voucher.