**Executive Summary**
This document provides guidelines to all 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 directed to streamline processes to ensure timely intimation and credit of payment information. 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 of the receipt of cross-border inward transactions immediately upon receiving the inward message.
* For messages received after operating hours, customers must be informed at the start of the next business day.
* **Reconciliation:**
* Banks should reconcile and confirm credits in nostro accounts either in near real-time or at periodic intervals, with reconciliation intervals not exceeding thirty minutes.
* **Crediting Payments:**
* Banks must endeavor to credit inward payments received during foreign exchange market hours on the same business day to the beneficiary's account.
* Inward payments received after market hours should be credited on the next business day, subject to FEMA and other regulatory requirements.
* **Straight Through Processing & Digital Interfaces:**
* Banks, based on risk assessment and FEMA guidelines, may implement a straight-through process for crediting inward payments to resident accounts.
* Banks may endeavor to provide digital interfaces for customers to facilitate foreign exchange transactions, including submission of documents and monitoring.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Banks must modify their internal processes and systems to comply with the new guidelines for faster cross-border inward payments.
* **Action Required:** Banks need to implement the changes described in the document, including updating customer communication protocols, streamlining reconciliation processes, and adhering to timelines for crediting payments. The implementation of the new guidelines should be completed within six months from the issue date of this document.
**Stakeholder: Customers Receiving Cross-Border Payments**
* **Impact:** Customers will receive faster notification and crediting of inward cross-border payments, improving efficiency and transparency.
* **Action Required:** No direct action is required, but customers should be aware of the new timelines and communication protocols for receiving funds.
Key Entities Referenced
Payments Vision 2025: A Reserve Bank initiative to improve cross-border payments efficiency.
Payment and Settlement Systems Act 2007: The Act under which the directive regarding faster cross-border payments is issued.
FEMA: Foreign Exchange Management Act guidelines that banks must comply with when crediting inward payments.
G20: The G20 roadmap that this directive aligns with to make cross-border payments cheaper, faster, and more accessible.
Reserve Bank: The issuing authority of the guidelines for faster cross-border payments
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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