**Executive Summary**
The Reserve Bank issued guidelines 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 directive aims to streamline processes at the beneficiary bank to ensure timely intimation of payment information and credit to the beneficiary's account. The guidelines outlined in paragraph 3 shall be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* 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, to avoid delays from relying on end-of-day statements.
* **Payment Crediting:**
* Banks should 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 regulatory requirements.
* **Automated Processing:**
* Banks may implement a straight-through process for crediting inward payments to individual residents' accounts, contingent on 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.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Banks are required to modify their operational procedures for handling cross-border inward payments to align with the new guidelines, focusing on quicker customer notification, faster nostro account reconciliation, and timely crediting of funds.
* **Action Required:** Banks must review and update their systems, processes, and customer communication protocols to comply with the guidelines within six months of the circular date. This includes potentially upgrading technology, adjusting reconciliation practices, and establishing digital interfaces.
**Stakeholder: Customers Receiving Cross-Border Payments**
* **Impact:** Customers should experience faster and more transparent receipt and crediting of cross-border payments. They may also gain access to improved digital interfaces for managing foreign exchange transactions.
* **Action Required:** Customers should expect and can request quicker notifications and credit of inward payments. They may also need to adapt to new digital platforms offered by banks for foreign exchange transactions.
Key Entities Referenced
Payment and Settlement Systems Act 2007: Act under which the directive to facilitate faster cross-border payments is issued.
Reserve Bank: The issuer of the guidelines, responsible for regulating banks.
Payments Vision 2025: A Reserve Bank initiative aiming to improve efficiency in cross-border payments.
FEMA: Foreign Exchange Management Act, compliance with which is required when crediting inward payments.
G20: The guidelines align with the G20 roadmap to make payments cheaper, faster, more transparent, and more accessible.
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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