**Executive Summary**
This circular from the Reserve Bank of India outlines guidelines for Scheduled Commercial Banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and G20 roadmap. Banks are advised to streamline processes to ensure timely intimation of payment information and credit to the beneficiary's account. The guidelines specified in para 3 will be effective six months from the date of the circular.
**Key Points / Main Content**
* **Customer Communication:**
* Banks must inform customers immediately upon receiving cross-border inward transaction messages.
* Messages received after operating hours must be communicated at the start of the next business day.
* **Reconciliation:**
* Banks should reconcile and confirm credits in nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes.
* **Crediting Payments:**
* Banks should endeavour to credit inward payments received during foreign exchange market hours on the same business day.
* Inward payments received after market hours should be credited on the next business day, subject to FEMA and other regulatory compliance.
* **Straight-Through Processing:**
* Based on risk assessment and FEMA compliance, banks may implement straight-through processing for crediting inward payments to resident accounts.
* **Digital Interface:**
* Banks may provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and transaction monitoring.
* **Legal Basis:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Required to modify internal processes and systems to comply with the new guidelines, focusing on faster notification, reconciliation, and crediting of cross-border payments.
* **Action Required:** Review current processes, update systems, train staff on new procedures, and ensure compliance with FEMA guidelines.
**Stakeholder: Bank Customers (Beneficiaries of Cross-Border Payments)**
* **Impact:** Expected to experience faster and more transparent processing of cross-border inward payments.
* **Action Required:** Monitor payment timelines and report any discrepancies to their respective banks.
Key Entities Referenced
Payment and Settlement Systems Act 2007: Act under which the directive to expedite cross-border inward payments is issued.
Payments Vision 2025: Reserve Bank's vision document that aims to improve cross-border payment efficiency.
FEMA: Foreign Exchange Management Act, which banks must comply with when crediting inward payments.
All Scheduled Commercial Banks: The target audience and implementing entities of the guidelines.
Reserve Bank: Issuer of the Payment 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
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