**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 Payments Vision 2025 and the G20 roadmap. Banks are instructed to streamline processes to ensure timely intimation of payment information and credit to beneficiary accounts. The directions at paragraph 3 will be effective six months from the date of this circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must inform customers immediately upon receipt of cross-border inward transactions.
* Messages received after operating hours should be communicated at the start of the next business day.
* **Reconciliation Process:**
* Banks should reconcile and confirm credit in nostro accounts either on a near real-time basis or at periodic intervals, not exceeding thirty minutes.
* **Payment Crediting:**
* Banks must endeavor to 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 compliance.
* **Straight-Through Processing:**
* Banks may, based on risk assessment and FEMA guidelines, implement straight-through processing for crediting inward payments to resident accounts.
* **Digital Interface:**
* Banks may endeavor to provide a digital interface for customers to facilitate foreign exchange transactions, including submission of documents and monitoring.
* **Effective Date:**
* The directions at paragraph 3 will be effective six months from the date of this circular.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
**Impact:** Banks must implement new processes and systems to ensure faster and more transparent cross-border inward payments.
**Action Required:** Banks must update their reconciliation and payment processing procedures, customer communication strategies, and consider digital interface development to comply with the guidelines within six months of the circular date.
**Stakeholder: Bank Customers (Beneficiaries of Cross-Border Payments)**
**Impact:** Customers will experience faster and more transparent processing of cross-border inward payments.
**Action Required:** No direct action is required, but beneficiaries should expect to be informed more promptly about inward transactions and receive payments faster.
Key Entities Referenced
Payment and Settlement Systems Act 2007: The Act under which the directive regarding cross-border inward payments is issued.
Reserve Bank: The issuing authority for the guidelines on cross-border inward payments.
Payments Vision 2025: The Reserve Bank's document that aims to improve efficiency in cross-border payments.
FEMA: Regulations that banks must comply with when crediting inward payments.
G20: International forum whose roadmap is aligned with the efforts to improve 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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