**Executive Summary**
This document outlines guidelines issued by the Reserve Bank to all scheduled commercial banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and the G20 roadmap. The aim is to make cross-border payments cheaper, faster, more transparent, and more accessible. The directions in the document are effective six months from the circular’s date.
**Key Points / Main Content**
* **Customer Notification:**
* Banks must inform customers of the receipt of cross-border inward transactions immediately upon receipt of the inward message.
* Messages received after the close of operating hours should be communicated at the start of the next business day.
* **Nostro Account Reconciliation:**
* Banks should reconcile and confirm credit in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes, to avoid delays caused by reliance on end-of-day statements.
* **Payment Crediting:**
* Banks should credit inward payments received during foreign exchange market hours to the beneficiary's account 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.
* **Straight Through Processing:**
* Banks may implement a straight-through process for crediting inward payments to residents' 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 document submission and transaction monitoring.
**Impact Analysis**
**Impact**: All Scheduled Commercial Banks
* **Impact**: Banks need to adjust internal processes and systems to comply with the new guidelines for faster reconciliation, customer notification, and payment crediting. They may also need to invest in technology to provide a digital interface for customers.
* **Action Required**: Banks must implement the changes to their systems and processes within six months of the date of the circular to ensure compliance with the Reserve Bank's guidelines.
**Impact**: Customers Receiving Cross-Border Payments
* **Impact**: Customers will benefit from faster notification of inward payments and quicker crediting of funds to their accounts. They will also have access to digital interfaces for managing foreign exchange transactions.
* **Action Required**: Customers should familiarize themselves with the new procedures and utilize any digital interfaces provided by their banks for foreign exchange transactions.
Key Entities Referenced
Payment and Settlement Systems Act 2007: Governs payment systems in India, providing the legal framework for the Reserve Bank of India to regulate and supervise these systems.
Reserve Bank: Central bank issuing guidelines and overseeing the cross-border payment system.
Payments Vision 2025: A document that is aimed to bring efficiency in the cross-border payments aligning with the G20 roadmap to make them cheaper, faster, more transparent, and more accessible.
FEMA: Referenced as a set of regulatory requirements with which banks are required to comply when crediting inward 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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