**Executive Summary**
This document outlines guidelines issued by the Reserve Bank to all scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and G20 roadmap. Banks are advised to streamline processes at the beneficiary end to ensure timely payment and credit to the beneficiary's account. The directions specified in paragraph 3 of the circular will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Notification:**
* 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.
* **Reconciliation Process:**
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals.
* Reconciliation intervals should not exceed thirty minutes.
* **Payment Credit Timelines:**
* 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 requirements.
* **Straight-Through Processing:**
* Banks may, based on risk assessment and FEMA guidelines, implement straight-through processing for crediting inward payments.
* **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**
**Scheduled Commercial Banks**
* **Impact:** Affected because banks must adapt operational processes to expedite the reconciliation of nostro accounts and faster credit of inward payments, along with providing the notification to customers.
* **Action Required:** Review and update internal processes for reconciliation, customer communication, and payment crediting to ensure compliance with the new guidelines, potentially investing in technological upgrades for reconciliation.
**Customers Receiving Cross-Border Payments**
* **Impact:** Affected because this will result in faster notification and crediting of inward payments, improving the efficiency of international transactions.
* **Action Required:** Customers do not have any explicit action, but they should expect and monitor for quicker updates on inbound payments.
Key Entities Referenced
Payments Vision 2025: A Reserve Bank initiative aiming to improve efficiency in cross-border payments.
Payment and Settlement Systems Act 2007: The Act under which the directive to facilitate faster cross-border payments is issued (specifically Section 10(2) read with Section 18).
FEMA: Foreign Exchange Management Act guidelines to which the crediting of inward payments is subject.
Reserve Bank: Issuer of the guidelines to commercial banks.
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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