**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 advised to take specific actions to streamline processes and ensure timely intimation and credit of payments. The directions are effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must immediately inform customers of the receipt of cross-border inward transactions upon receiving the inward message.
* Messages received after operating hours should be communicated to the customer at the start of the next business day.
* **Reconciliation of Nostro Accounts:**
* Banks should reconcile and confirm credits in nostro accounts either on a near real-time basis or at periodic intervals, not exceeding thirty minutes.
* **Timely Credit of Payments:**
* Banks shall 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 implement a straight-through process for crediting inward payments to resident accounts, based on risk assessment and FEMA guidelines.
* **Digital Interface for Customers:**
* Banks may provide a digital interface to facilitate foreign exchange transactions, including submission of documents and monitoring.
* **Effective Date**
* The guidelines outlined in paragraph 3 will be effective six months from the date of the 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**
**Scheduled Commercial Banks**
* **Impact:**
* Banks must adjust their processes to comply with the guidelines for faster cross-border inward payments.
* They may need to update their systems and procedures for customer notification, nostro account reconciliation, payment crediting, and providing digital interfaces.
* **Action Required:**
* Implement the new guidelines within six months of the circular date.
* Review and update internal processes and systems.
* Train staff on the new requirements.
**Customers Receiving Cross-Border Payments**
* **Impact:**
* Customers should experience faster notification and crediting of cross-border inward payments.
* They may benefit from the availability of digital interfaces for foreign exchange transactions.
* **Action Required:**
* Monitor their inward payment transactions for improved processing times.
* Utilize the digital interfaces offered by banks for foreign exchange transactions.
Key Entities Referenced
Payments Vision 2025: A Reserve Bank initiative aimed at improving the efficiency of cross-border payments, aligning with the G20 roadmap.
Payment and Settlement Systems Act 2007: The legal basis (Section 10(2) read with Section 18) for the directive regarding cross-border inward payments.
FEMA: Foreign Exchange Management Act, referenced in the context of compliance for inward payments.
Banks: Addressed in the guidelines for facilitating faster cross-border inward payments.
G20: Referenced as a roadmap to making cross-border 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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