**Executive Summary**
This document from the Reserve Bank provides guidelines to scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and the G20 roadmap. Banks are advised to take specific actions related to customer notification, reconciliation of nostro accounts, and crediting of payments. The directions at paragraph 3 will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Notification:**
* Banks must inform customers of receipt of cross-border inward transactions immediately upon receipt of the inward message.
* Messages received after operating hours should be communicated at the start of the next business day.
* **Nostro Account Reconciliation:**
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals, with the interval not exceeding thirty minutes.
* **Payment Crediting:**
* Banks should endeavor to credit inward payments received during foreign exchange market hours on the same business day, and payments received after market hours on the next business day, subject to FEMA and other regulatory compliance.
* Banks may implement a straight-through process for crediting inward payments to residents, subject to risk assessment and FEMA guidelines.
* **Digital Interface:**
* Banks may endeavour to provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and transaction monitoring.
* **Effective Date:**
* The directions outlined in paragraph 3 will be effective six months from the date of the circular.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007 (Act 51 of 2007).
**Impact Analysis**
**Scheduled Commercial Banks**
* **Impact:** Banks must adjust their processes to comply with the new guidelines for customer notification, nostro account reconciliation, and payment crediting.
* **Action Required:** Review and modify existing processes to align with the guidelines, including updating systems and training staff, and implement the required changes within six months from the circular date.
**Customers Receiving Cross-Border Payments**
* **Impact:** Customers will receive quicker notification of inward payments and faster crediting of funds to their accounts.
* **Action Required:** Monitor payment times and report any delays to their respective banks to ensure compliance.
Key Entities Referenced
Payments Vision 2025: A Reserve Bank initiative aiming to improve efficiency in cross-border payments.
Payment and Settlement Systems Act 2007: The act under which the directive is issued, specifically Section 10(2) read with Section 18.
FEMA: Foreign Exchange Management Act, referenced for compliance regarding crediting inward payments.
Reserve Bank: The central bank issuing the guidelines.
G20: The circular aims to align with the G20 roadmap for cross-border payments.
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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