**Executive Summary**
This document outlines guidelines from the Reserve Bank to facilitate faster cross-border inward payments, aligning with the G20 roadmap and the Reserve Bank's Payments Vision 2025. It addresses delays at the beneficiary bank and provides instructions for banks to streamline processes. The directions in paragraph 3 will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must inform customers of receipt of cross-border inward transactions immediately upon receiving the inward message, or at the start of the next business day for messages received after operating hours.
* **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 thirty minutes.
* **Crediting of Payments:**
* 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 compliance and other regulatory requirements.
* **Straight Through Processing:**
* Banks may implement a straight-through process for crediting inward payments to resident accounts, subject to risk assessment and FEMA guidelines.
* **Digital Interface:**
* Banks should endeavor to provide a digital interface for customers to facilitate foreign exchange transactions, including submission of documents/information and transaction monitoring.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).
**Impact Analysis**
**All Scheduled Commercial Banks**
* **Impact**
* Banks will need to update their processes to ensure faster notification and crediting of cross-border inward payments. This may involve changes to reconciliation procedures, customer communication systems, and digital interfaces.
* **Action Required**
* Banks must implement the guidelines outlined in the circular within six months of the date of the circular.
* Banks must update internal policies and procedures to comply with the new guidelines, paying particular attention to reconciliation and customer communication.
**Customers of Scheduled Commercial Banks**
* **Impact**
* Customers will benefit from faster and more transparent cross-border inward payments. They will receive quicker notification of payments and faster crediting to their accounts.
* **Action Required**
* No direct action is required from customers, but they should expect to see improvements in the speed and transparency of cross-border inward payments.
Key Entities Referenced
Reserve Bank: Issuer of guidelines concerning cross-border payments.
Payments Vision 2025: A Reserve Bank initiative aimed at improving the efficiency of cross-border payments.
Payment and Settlement Systems Act 2007: The legal basis (Section 10(2) read with Section 18) for the directive on cross-border payments.
FEMA: Refers to Foreign Exchange Management Act guidelines. Banks have to ensure compliance with extant FEMA guidelines.
Scheduled Commercial Banks: Banks to whom the guidelines regarding faster cross-border inward payments are addressed.
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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