**Executive Summary**
This document outlines guidelines issued by the Reserve Bank to scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the Reserve Bank's Payments Vision 2025 and the G20 roadmap. Banks are advised to streamline processes at the beneficiary end to expedite credit to beneficiary accounts and improve transparency. The directions in paragraph 3 shall be effective six months from the date of this circular.
**Key Points / Main Content**
* **Customer Notification:**
* Banks must inform customers of cross-border inward transactions immediately upon receipt of the inward message.
* Messages received after operating hours must be communicated immediately at the start of the next business day.
* **Nostro Account Reconciliation:**
* Banks are advised to reconcile and confirm credit in the nostro account on a near real-time basis or at periodic intervals, ideally not exceeding thirty minutes, instead of relying solely on end-of-day statements.
* **Payment Crediting:**
* 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 compliance and regulatory requirements.
* **Straight-Through Processing:**
* Banks may implement straight-through processing for crediting inward payments to resident accounts, subject to FEMA guidelines and risk assessment.
* **Digital Interface:**
* Banks may provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and transaction monitoring.
* **Directive Information:**
* The directive, outlined in paragraph 3, will take effect six months from the date of this circular.
* This 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**
**All Scheduled Commercial Banks**
* **Impact**
* Banks are required to modify their processes for handling cross-border inward payments to align with the guidelines. This includes changes to customer notification procedures, nostro account reconciliation, payment crediting timelines, and potentially the implementation of straight-through processing and digital interfaces.
* **Action Required**
* Review and update internal procedures to comply with the guidelines, focusing on streamlining processes, improving communication, and expediting payment crediting. Implement necessary technological and operational changes.
**Bank Customers (Beneficiaries of Inward Payments)**
* **Impact**
* Customers will receive faster notifications of inward payments and quicker crediting of funds to their accounts, improving their access to and management of funds.
* **Action Required**
* Customers should be informed of the new, improved processes and the benefits they offer. Customers may need to adapt to new communication methods or digital interfaces provided by their banks.
Key Entities Referenced
Payments Vision 2025: A policy document of the Reserve Bank of India aimed at improving efficiency in cross-border payments.
Banks: Scheduled commercial banks that handle cross-border inward payments, subject to the guidelines in the circular.
Payment and Settlement Systems Act 2007: The Act under which the directive is issued, specifically Sections 10(2) and 18.
FEMA: Foreign Exchange Management Act, regulations which banks must comply with regarding crediting inward payments.
G20: The circular aligns with the G20 roadmap to make cross-border payments cheaper, faster, more transparent, and 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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