**Executive Summary**
This document contains guidelines from the Reserve Bank to all scheduled commercial banks regarding faster cross-border inward payments, aligning with the Payments Vision 2025 and G20 roadmap. It advises banks on streamlining processes to ensure timely notification and credit of payments to beneficiary accounts. The directions outlined in paragraph 3 will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Notification and Reconciliation:**
* Banks must inform customers of cross-border inward transactions immediately upon receipt of the inward message, or at the start of the next business day for messages received after operating hours.
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals not exceeding thirty minutes, instead of relying solely on end-of-day statements.
* **Payment Crediting Timelines:**
* Banks should credit inward payments received during foreign exchange market hours within the same business day and payments received after market hours on the next business day, adhering to FEMA and other regulatory requirements.
* Banks may implement a straight-through process for crediting inward payments to resident accounts, subject to risk assessment and FEMA compliance.
* **Digital Interface Enhancement:**
* Banks may provide digital interfaces to customers for foreign exchange transactions, including document submission and transaction monitoring, within a reasonable timeframe.
* **Legal Basis and Effective Date:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007.
* The directions in paragraph 3 are effective six months from the date of this circular.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
**Impact:** Banks must adjust their internal processes to comply with the new guidelines, potentially requiring changes to their notification systems, reconciliation procedures, and customer-facing interfaces.
**Action Required:** Banks need to implement the advised changes to ensure faster and more efficient processing of cross-border inward payments within six months of the circular date, as well as comply with outlined customer notifications and the stipulated reconciliation procedures.
**Stakeholder: Customers of Scheduled Commercial Banks (Beneficiaries of Inward Payments)**
**Impact:** Customers should experience faster notification and crediting of cross-border inward payments.
**Action Required:** No direct action is required from customers; however, they should expect and monitor for improvements in the speed and transparency of inward payment processing.
Key Entities Referenced
Payments Vision 2025: A Reserve Bank initiative aiming to improve the efficiency of cross-border payments.
Payment and Settlement Systems Act 2007: The act under which the directive regarding cross-border inward payments is issued.
FEMA: Guidelines that banks must comply with when crediting inward payments.
Reserve Bank: The issuing authority of guidelines for cross-border payments.
G20: Referenced international roadmap to make cross-border payments cheaper, faster, more transparent and more accessible.
DPSS.CO.ID.No / 06.08.017 / 2025-26 DD-MM-YYYY
The Chairman / Managing Director / Chief Executive Officer
All Scheduled Commercial Banks
Madam / Dear Sir,
Guidelines to facilitate faster cross-border inward payments
The Reserve Bank’s Payments Vision 2025 aims to bring efficiency in the cross-border
payments aligning with the G20 roadmap to make them cheaper, faster, more
transparent, and more accessible.
2. The speed of cross-border payments is affected by several factors. One of
these factors is the delay at the beneficiary leg i.e., the time taken from receipt of the
payment at the beneficiary bank till credit to the beneficiary account. Streamlining the
processes at the beneficiary bank would ensure timely intimation of payment
information and credit to the beneficiary’s account.
3. Accordingly, banks are advised as under:
a. Banks shall inform their customer of the receipt of cross-border inward
transactions immediately on receipt of inward message. Messages received
after close of operating hours of the individual banks shall be informed to the
customer immediately at the start of the next business day.
b. It is observed that several banks rely upon end-of-day statements of the nostro
account for confirming and reconciling receipts in nostro accounts, resulting in
delayed credit. To expedite this process, banks are advised to undertake
reconciliation and confirmation of credit in the nostro account either on near real
time basis or at periodic intervals. The reconciliation interval should normally not
exceed thirty minutes.
c. Banks shall endeavour to credit the inward payments received during the
foreign exchange market hours within the same business day to the
beneficiary’s account, and credit the inward payments received after market
hours on the next business day, subject to compliance with the extant FEMA
and other regulatory requirements.d. Banks may, based on their risk assessment and subject to compliance with
extant FEMA guidelines, put in place a straight through process for crediting
inward payments to the account of individual residents.
e. Banks may, within a reasonable time frame, endeavour to provide digital
interface to their customers to facilitate foreign exchange transactions, including
submission of documents or information, and monitoring of transactions.
4. The directions at para 3 above shall be effective six months from the date of
this circular.
5. The directive is issued under Section 10(2) read with Section 18 of Payment
and Settlement Systems Act 2007, (Act 51 of 2007).
Yours faithfully,
(Gunveer Singh)
Chief General Manager-in-Charge
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