**Executive Summary**
This document provides guidelines from the Reserve Bank to scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and the G20 roadmap. The instructions detailed in paragraph 3 will be effective six months from the date of this circular. Banks are advised to streamline processes to ensure timely notification and credit of payments to beneficiary accounts.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must inform customers immediately upon receipt of cross-border inward transactions.
* Messages received after operating hours must be communicated at the start of the next business day.
* **Reconciliation of Nostro Accounts:**
* Banks should reconcile and confirm credits in nostro accounts on a near real-time basis or at periodic intervals, not exceeding 30 minutes, to avoid delays.
* **Crediting of Payments:**
* Banks shall credit inward payments received during foreign exchange market hours to the beneficiary's account within the same business day.
* 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 straight-through processing for crediting inward payments to resident accounts, following 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.
* **Legal Basis and Effective Date:**
* The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007.
* The directions will be effective six months from the circular's date.
**Impact Analysis**
**Stakeholder:** Scheduled Commercial Banks
* **Impact:** Banks must adapt their internal processes to comply with the new guidelines, including adjustments to reconciliation procedures, customer notification protocols, and payment crediting timelines. They may also choose to implement digital interfaces for customers.
* **Action Required:** Banks need to review their existing systems and procedures, implement necessary changes to meet the guidelines, and ensure compliance with FEMA and other relevant regulations.
**Stakeholder:** Customers of Scheduled Commercial Banks (Beneficiaries of Cross-Border Payments)
* **Impact:** Customers will benefit from faster and more transparent cross-border payment processing, including quicker notification and crediting of funds.
* **Action Required:** Customers should be aware of the changes and may need to adapt to new digital interfaces provided by banks for foreign exchange transactions.
Key Entities Referenced
Payments Vision 2025: Reserve Bank's initiative aiming to improve efficiency in cross-border payments aligning with the G20 roadmap.
Payment and Settlement Systems Act 2007: Act cited as the legal basis for the directive regarding faster cross-border inward payments.
FEMA: Referenced as a set of guidelines that banks must comply with when processing inward payments.
Reserve Bank: The issuing entity of the guidelines.
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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