Why is an FIRA/FIRC needed?

The FIRC and FIRA documents were instituted by the RBI to prevent money-laundering activities. Because of this, exporters or service providers who transact with foreign entities have to prove that their transaction is a legitimate one, and the FIRA or FIRC is a way to document the ultimate seller so that their payments aren’t withheld by their bank or flagged as a false positive.