**Executive Summary**
This document provides guidelines from the Reserve Bank to all scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the G20 roadmap and the Reserve Bank's Payments Vision 2025. The guidelines aim to streamline processes at the beneficiary bank to ensure timely intimation and credit of payments. The directions outlined in paragraph 3 will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must inform customers of receipt of cross-border inward transactions immediately upon receiving the inward message.
* Messages received after operating hours must be communicated immediately at the start of the next business day.
* **Reconciliation and Credit:**
* Banks must reconcile and confirm credits in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes.
* Banks must endeavour 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 regulations.
* **Process and Technology:**
* Banks may implement straight-through processing for crediting inward payments to resident accounts, subject to risk assessment and FEMA guidelines.
* Banks may provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and transaction monitoring.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).
**Impact Analysis**
**Stakeholder: All Scheduled Commercial Banks**
* **Impact:** They need to update their processes to comply with the new guidelines for faster cross-border inward payments. This includes improving communication with customers, enhancing reconciliation practices, and potentially implementing new technologies.
* **Action Required:** Banks need to review and update their existing systems and procedures to align with the requirements outlined in the circular, including informing customers promptly, reconciling accounts more frequently, and expediting the crediting of funds. They also need to assess risks and implement a straight-through process if deemed appropriate.
**Stakeholder: Bank Customers Receiving Cross-Border Payments**
* **Impact:** Customers will benefit from faster and more transparent cross-border payment processes.
* **Action Required:** They should expect quicker notification of inward payments and faster crediting of funds to their accounts. Customers may also need to adapt to new digital interfaces for foreign exchange transactions provided by their banks.
Key Entities Referenced
Payment and Settlement Systems Act 2007: The Act under which the directive is issued.
Payments Vision 2025: The Reserve Bank's plan to enhance efficiency in cross-border payments.
FEMA: Foreign Exchange Management Act, referred to for compliance regarding foreign exchange transactions.
Scheduled Commercial Banks: The entities to whom these guidelines are addressed.
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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