**Executive Summary**
This document provides guidelines from the Reserve Bank of India (RBI) to Scheduled Commercial Banks regarding faster cross-border inward payments. These guidelines are in line with the RBI's Payments Vision 2025, aiming to improve efficiency, speed, transparency, and accessibility of cross-border payments. The directions outlined in paragraph 3 of the document 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 transactions (or at the start of the next business day for messages received after operating hours).
* **Reconciliation of Nostro Accounts:**
* Banks should reconcile and confirm credit in their nostro accounts on a near real-time basis or at periodic intervals, not exceeding thirty minutes, instead of relying on end-of-day statements.
* **Payment Crediting:**
* Banks shall endeavour to 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 other regulatory compliance.
* **Straight-Through Processing:**
* Banks may, based on risk assessment and compliance with FEMA guidelines, implement straight-through processing for crediting inward payments to resident accounts.
* **Digital Interface:**
* Banks may endeavour to provide digital interfaces for customers to facilitate foreign exchange transactions, including submission of documents/information and monitoring of transactions.
* **Legal Basis and Effective Date:**
* The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007.
* The directions in paragraph 3 will be effective six months from the date of the circular.
**Impact Analysis**
**Scheduled Commercial Banks**
* **Impact:** Banks must adjust internal processes for customer communication, nostro account reconciliation, and payment crediting to comply with the new guidelines. They may also need to invest in or modify digital interfaces for customers.
* **Action Required:** Banks must review and update their procedures and systems to meet the requirements outlined in the circular, particularly concerning customer notification, reconciliation frequency, and payment processing times.
**Customers Receiving Cross-Border Payments**
* **Impact:** Customers should experience faster notification and crediting of cross-border inward payments, resulting in improved efficiency and transparency.
* **Action Required:** Customers may need to utilise any digital interfaces provided by banks to submit required documents or monitor transactions.
Key Entities Referenced
Payment and Settlement Systems Act 2007: Act under which the directive regarding faster cross-border inward payments is issued.
Reserve Bank: Issuer of the guidelines for faster cross-border inward payments.
Payments Vision 2025: RBI's vision document that aims to bring efficiency in cross-border payments.
FEMA: Refers to guidelines related to the Foreign Exchange Management Act, compliance to which is required.
G20: Referenced as the international forum with a roadmap to make cross-border payments cheaper, faster, and more accessible.
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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