**Executive Summary**
This document provides guidelines from the Reserve Bank to all Scheduled Commercial Banks to facilitate faster cross-border inward payments, aligning with the G20 roadmap and the Reserve Bank’s Payments Vision 2025. The circular advises banks on measures to streamline processes at the beneficiary bank to ensure timely intimation of payment information and credit to the beneficiary's account. The directions outlined in paragraph 3 become effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must inform customers immediately upon receipt of cross-border inward transaction messages.
* Messages received after operating hours should be communicated at the start of the next business day.
* **Reconciliation and Credit:**
* Banks should reconcile nostro accounts on a near real-time or periodic basis, with reconciliation intervals ideally not exceeding thirty minutes.
* Banks should credit inward payments received during foreign exchange market hours on the same business day; payments received after market hours should be credited on the next business day, subject to FEMA and other regulatory requirements.
* **Process and Technology:**
* Banks may implement a straight-through process for crediting inward payments, based on risk assessment and compliance with FEMA guidelines.
* Banks may endeavour to provide a digital interface for customers to facilitate foreign exchange transactions.
* **Legal Basis and Effective Date:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007.
* The directions in paragraph 3 are effective six months from the date of the circular.
**Impact Analysis**
**Scheduled Commercial Banks**
* **Impact**
* Banks are required to revise their processes for handling cross-border inward payments to ensure faster credit and customer notification.
* Banks are expected to enhance their reconciliation processes and consider implementing digital interfaces.
* **Action Required**
* Banks must implement the updated guidelines, including changes to reconciliation and notification procedures.
* Banks should assess their risk and technology infrastructure to implement straight-through processing and digital interfaces, and comply with all regulatory requirements.
**Bank Customers**
* **Impact**
* Customers will receive faster notification of cross-border payments.
* Customers can expect quicker crediting of inward payments to their accounts.
* **Action Required**
* Customers should be aware of the faster processing times and can monitor payments through digital interfaces, if provided by their bank.
Key Entities Referenced
Payments Vision 2025: A Reserve Bank initiative aimed at improving efficiency in cross-border payments.
Payment and Settlement Systems Act 2007: The act under which the directive regarding cross-border inward payments is issued.
FEMA: Foreign Exchange Management Act guidelines mentioned in the context of crediting payments.
Reserve Bank: The central bank issuing guidelines.
G20: The intergovernmental forum whose roadmap is aligned with the Payments Vision 2025.
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