**Executive Summary**
This document from the Reserve Bank of India outlines guidelines to facilitate faster cross-border inward payments, aligning with the Reserve Bank's Payments Vision 2025 and the G20 roadmap. It focuses on streamlining processes at beneficiary banks to ensure timely notification and credit to the beneficiary's account. The directions in paragraph 3 will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Notification:**
* Banks must immediately inform customers upon receipt of cross-border inward transactions.
* Messages received after operating hours should be communicated at the start of the next business day.
* **Nostro Account Reconciliation:**
* Banks are advised to reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes.
* **Credit Timelines:**
* Banks should credit inward payments received during foreign exchange market hours on the same business day.
* Inward payments received after market hours should be credited on the next business day, subject to FEMA and other regulatory requirements.
* **Straight Through Processing (STP):**
* Banks, based on risk assessment and FEMA guidelines, may implement a straight-through process for crediting inward payments to resident accounts.
* **Digital Interface:**
* Banks may provide a digital interface for customers to facilitate foreign exchange transactions, including submission of documents and 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**
**All Scheduled Commercial Banks**
* **Impact**
* Banks must adjust internal processes to comply with the new guidelines for faster processing and customer notification of cross-border inward payments. This may require system upgrades, process re-engineering, and staff training.
* **Action Required**
* Implement changes to customer notification procedures.
* Enhance nostro account reconciliation processes.
* Ensure timely crediting of inward payments.
* Consider implementing a straight-through processing system.
* Consider providing a digital interface for customers.
**Customers Receiving Cross-Border Payments**
* **Impact**
* Customers will experience faster notification and crediting of cross-border payments, improving efficiency and transparency.
* **Action Required**
* Customers may need to utilise any new digital interfaces provided by their banks to facilitate and monitor foreign exchange transactions.
Key Entities Referenced
Payments Vision 2025: A document by the Reserve Bank of India that aims to bring efficiency in cross-border payments by making them cheaper, faster, more transparent, and more accessible.
Payment and Settlement Systems Act 2007: The legal basis for the directive, specifically Section 10(2) read with Section 18.
FEMA: Regulations governing foreign exchange in India; banks must comply with extant FEMA guidelines.
Reserve Bank: Issuer of the guidelines to commercial banks to facilitate faster cross-border inward payments.
G20: The cross-border payment improvements align with the roadmap of the G20.
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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