**Executive Summary**
This document provides guidelines to all scheduled commercial banks to facilitate faster cross-border inward payments, in alignment with the Reserve Bank's Payments Vision 2025 and the G20 roadmap. The guidelines aim to streamline processes at the beneficiary bank to ensure timely notification and credit of payments. The directions outlined in paragraph 3 will be effective six months from the date of this circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must immediately inform customers upon receipt of cross-border inward transaction messages. Messages received after operating hours should be communicated immediately at the start of the next business day.
* **Reconciliation of Nostro Accounts:**
* Banks should reconcile and confirm credits in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes.
* **Crediting of Payments:**
* Banks should credit inward payments received during foreign exchange market hours on the same business day. Payments received after market hours should be credited on the next business day, subject to FEMA compliance and other regulatory requirements.
* **Straight-Through Processing:**
* Banks may implement straight-through processing for crediting inward payments to resident accounts, subject to risk assessment and FEMA guidelines.
* **Digital Interface:**
* Banks may endeavor to provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and transaction monitoring.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Required to update their processes to align with the guidelines for faster reconciliation and crediting of cross-border payments. May need to invest in technological upgrades to meet requirements for real-time reconciliation and digital interfaces.
* **Action Required:** Implement the outlined changes within six months from the date of this circular, including adjustments to customer communication, nostro account reconciliation, payment crediting procedures, and digital interface development.
**Stakeholder: Customers Receiving Cross-Border Payments**
* **Impact:** Should experience faster and more transparent cross-border payment processing, with quicker notifications and credits to their accounts.
* **Action Required:** No direct action required. They should expect to see improvements in the speed and efficiency of cross-border inward payment processing.
Key Entities Referenced
Payment and Settlement Systems Act 2007: The Act under which the directive regarding cross-border inward payments is issued, specifically Sections 10(2) and 18
Payments Vision 2025: The Reserve Bank's plan that the guidelines for faster cross-border payments align with.
FEMA: The Foreign Exchange Management Act. Banks are required to comply with FEMA guidelines when processing inward payments.
G20: The G20 roadmap is referenced as an alignment point for cross-border payments efficiency.
Scheduled Commercial Banks: Addressees of the guidelines concerning cross-border inward 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
2