**Executive Summary**
This circular from the Reserve Bank of India provides guidelines to scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and the G20 roadmap. The directive focuses on streamlining processes at the beneficiary bank. The instructions outlined in paragraph 3 will take effect six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must immediately inform customers of cross-border inward transactions upon receiving the inward message.
* Messages received after operating hours should be communicated at the start of the next business day.
* **Reconciliation and Crediting:**
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes, to expedite the process.
* Banks must 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 and Digital Interface:**
* Banks may implement straight-through processing for crediting inward payments to resident accounts, based on their risk assessment and FEMA guidelines.
* Banks may provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and transaction monitoring.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007 (Act 51 of 2007).
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Required to modify internal processes to expedite the crediting of cross-border inward payments and improve communication with customers.
* **Action Required:** Banks must update their systems and procedures to comply with the new guidelines within six months and ensure adherence to FEMA regulations.
**Stakeholder: Customers Receiving Cross-Border Payments**
* **Impact:** Will experience faster and more transparent processing of inward payments.
* **Action Required:** Customers should monitor transactions through the provided digital interface and submit required documents in a timely manner.
Key Entities Referenced
Payments Vision 2025: The Reserve Bank's scheme to improve cross-border payments.
Payment and Settlement Systems Act 2007: The act under which the directive to banks is issued, specifically Sections 10(2) and 18.
Foreign Exchange Management Act (FEMA): Referenced guidelines related to foreign exchange that banks must comply with.
Scheduled Commercial Banks: The entities to whom the guidelines are addressed, regarding faster cross-border inward payments.
G20: An international group that the Reserve Bank is aligning its policies to.
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