The Reserve Bank's Payments Vision 2025 aims to bring efficiency in the cross- border payments aligning with the G20 roadmap for cross-border payments that has set targets for achieving cheaper, faster, more transparent, and more accessible cross-border payments.
The speed of the cross-border payments is affected by several factors. One of the challenges with speed of payments is experienced at the beneficiary leg i.e., the time taken from receipt of the payment at the beneficiary bank till credit to the beneficiary account.
Review of the extant process for inward cross-border payments indicated the need for streamlining the processes at the beneficiary bank for ensuring timely intimation of payment information and credit to the beneficiary's account. Accordingly, banks are advised as under:
- 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 banks shall be informed to customer immediately at the start of the next business day.
- 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 delay in crediting funds to the beneficiary's account. To expedite this process, banks are advised to undertake reconciliation and confirmation of credit in the nostro account frequently either on near real time basis or at periodic intervals. The reconciliation interval should normally not exceed one hour.
- 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.
- Banks may, based on their risk assessment and subject to compliance with extant FEMA guidelines, put in place straight through process for crediting the inward payments to the account of individual residents.
- 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.
The directions at para 3 above shall be effective six months from the date of this circular.
The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).
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