**Executive Summary**
This document from the Reserve Bank of India provides guidelines 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 for timely notification and credit of inward payments. The directions outlined in paragraph 3 become effective six months from the circular's date.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must immediately inform customers of received cross-border inward transactions upon receipt of the inward message.
* Messages received after operating hours should be communicated immediately at the start of the next business day.
* **Reconciliation:**
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes, to avoid delays caused by reliance on end-of-day statements.
* **Payment Credit:**
* Banks must endeavour to credit inward payments received during foreign exchange market hours within 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 & Digital Interface:**
* Banks may implement straight-through processing for crediting inward payments to resident accounts, based on risk assessment and FEMA compliance.
* Banks may endeavor to provide a digital interface for customers to facilitate foreign exchange transactions (including document submission and monitoring).
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Requires changes to operational procedures for handling cross-border inward payments.
* **Action Required:** Implement revised procedures for customer notification, reconciliation, and payment credit within six months of the circular's date. Consider implementing straight-through processing and digital customer interfaces.
**Stakeholder: Bank Customers (Beneficiaries of Inward Payments)**
* **Impact:** Benefits from faster notification and credit of cross-border inward payments.
* **Action Required:** Monitor payment processing times and engage with banks if improvements are not observed. Consider utilizing digital interfaces for foreign exchange transactions if available.
Key Entities Referenced
Payment and Settlement Systems Act 2007: The legal framework under which the directive regarding faster cross-border inward payments is issued.
Reserve Bank: The issuing authority of guidelines to facilitate faster cross-border inward payments.
Payments Vision 2025: A Reserve Bank initiative to enhance efficiency in cross-border payments.
FEMA: Foreign Exchange Management Act. Banks must comply with FEMA requirements.
Scheduled Commercial Banks: The entities to which these guidelines are directed.
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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