**Executive Summary**
This document provides guidelines to scheduled commercial banks for facilitating faster cross-border inward payments, aligning with the Reserve Bank's Payments Vision 2025 and the G20 roadmap. Banks are advised to streamline processes to ensure timely intimation and credit of payments. The directions outlined in paragraph 3 will become effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication and Reconciliation:**
* Banks must inform customers of received cross-border inward transactions immediately upon receipt of inward messages, or at the start of the next business day for messages received after operating hours.
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes, instead of relying solely on end-of-day statements.
* **Payment Crediting:**
* Banks should credit inward payments received during foreign exchange market hours on the same business day, and payments received after market hours on the next business day, subject to FEMA and regulatory compliance.
* Banks may implement a straight-through process for crediting inward payments to residents’ accounts, based on risk assessment and FEMA guidelines.
* **Digital Interface:**
* Banks may strive to provide a digital interface to customers for 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 outlined in paragraph 3 will become effective six months from the date of this circular.
**Impact Analysis**
**Stakeholder:** Scheduled Commercial Banks
* **Impact:** Banks need to adjust their operational processes for cross-border inward payments.
* **Action Required:** Update systems and procedures to ensure timely customer notification, faster nostro account reconciliation, and expedited payment crediting, as well as consider developing digital interfaces for customers.
**Stakeholder:** Customers of Scheduled Commercial Banks
* **Impact:** Customers will experience faster and more transparent cross-border inward payments.
* **Action Required:** Customers will benefit from faster processing, but may not be required to take any action.
Key Entities Referenced
Payment and Settlement Systems Act 2007: Governs payment and settlement systems in India and is the legal basis for the directive.
Reserve Bank: The issuing authority for the guidelines, responsible for regulating banks.
Payments Vision 2025: A policy document of the Reserve Bank aiming to improve cross-border payments.
FEMA: Foreign Exchange Management Act; referenced as a compliance requirement for banks.
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