RBI Issues Norms To Speed Up Cross-Border Inward Payments

The guidelines are part of the RBI’s Payments Vision 2025, which aligns with the G20 roadmap to make cross-border payments faster, cheaper, more transparent, and accessible. A key challenge identified by the RBI lies at the beneficiary end—specifically, the time taken by banks to process and credit funds after receiving payment messages. Key Directions for Banks To streamline processes, the RBI has issued several operational directives for banks. These include notifying customers immediately upon receiving cross-border payment messages, with those received after banking hours to be communicated at the start of the next business day. Reconciliation of nostro accounts used for foreign currency transactions is to be carried out on a near real-time basis or at intervals not exceeding one hour. Banks are expected to credit funds received during foreign exchange market hours on the same day, and those received after hours on the next business day, subject to regulatory compliance. Lenders may also implement straight-through processing (STP) systems for faster credit based on risk assessment and regulatory norms, and are encouraged to develop digital interfaces to facilitate foreign exchange transactions, including document submission and transaction tracking. Clarifications on Stakeholder Feedback The RBI clarified that immediate customer notification does not imply instant credit of funds, which remains subject to compliance with foreign exchange regulations and due diligence requirements. It also noted that STP systems can be extended beyond individual accounts to corporate customers, subject to risk management frameworks. Implementation The new guidelines will come into effect six months from the date of issuance, allowing banks time to upgrade systems and processes. The directive has been issued under the provisions of the Payment and Settlement Systems Act, 2007, reinforcing its regulatory mandate to improve payment efficiency in the country. (KNN Bureau)