**Executive Summary**
This document, issued by the Reserve Bank of India, provides guidelines for Scheduled Commercial Banks to facilitate faster cross-border inward payments, aligning with the Payments Vision 2025 and the G20 roadmap. Banks are advised to improve processes related to informing customers, reconciling nostro accounts, and crediting payments. The directions outlined 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 cross-border inward transactions immediately upon receipt of the inward message, or at the start of the next business day if the message is received after operating hours.
* **Nostro Account Reconciliation:**
* Banks should reconcile and confirm credits in nostro accounts either on a near real-time basis or at periodic intervals, not exceeding thirty minutes, to expedite the process.
* **Payment Crediting:**
* Banks must 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 requirements.
* **Straight-Through Processing:**
* Banks may, based on risk assessment and subject to FEMA guidelines, implement a straight-through process for crediting inward payments to resident accounts.
* **Digital Interface:**
* Banks may endeavour to provide a digital interface for customers to facilitate foreign exchange transactions, including document submission and monitoring.
* **Effective Date**
* The directions in paragraph 3 will be effective six months from the date of this circular.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks**
* **Impact:** Banks must modify their existing processes and systems to comply with the new guidelines for faster cross-border inward payments.
* **Action Required:** Review and update processes for customer notification, nostro account reconciliation, and payment crediting in accordance with the guidelines; implement digital interface as necessary.
**Stakeholder: Customers of Scheduled Commercial Banks**
* **Impact:** Customers will benefit from faster and more transparent cross-border inward payment processing.
* **Action Required:** Monitor the updates made by their respective bank.
Key Entities Referenced
Payment and Settlement Systems Act 2007: Governs the regulation and supervision of payment systems in India. Section 10(2) and 18 are referenced for directive issuance.
FEMA: Referenced as the extant Foreign Exchange Management Act guidelines which banks must comply with.
Payments Vision 2025: The Reserve Bank's plan to enhance the efficiency of cross-border payments.
Scheduled Commercial Banks: Banks that are subject to this circular's guidelines on cross-border inward payments.
G20 roadmap: International effort to improve cross-border payments, which Payments Vision 2025 is aligning with.
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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