Reserve Bank of India directs banks to notify customers immediately and reconcile nostro accounts at least hourly to speed up inward cross-border payments

The Reserve Bank of India has issued directions to scheduled commercial banks to streamline the beneficiary-bank stage of cross-border inward payments, aiming to reduce delays between receipt of an inward payment message and credit to the beneficiary’s account in line with Payments Vision 2025 and the G20 cross-border payments roadmap. Banks must inform customers immediately upon receipt of a cross-border inward message, with messages received after operating hours to be communicated at the start of the next business day. To address delays caused by reliance on end-of-day nostro statements, banks are expected to reconcile and confirm nostro credits frequently on a near real-time or periodic basis, with intervals normally not exceeding one hour. Banks should endeavour to credit inward payments received during foreign exchange market hours within the same business day and those received after market hours on the next business day, subject to compliance with the Foreign Exchange Management Act (FEMA) and other regulatory requirements. The directions also allow straight-through processing for crediting inward payments to individual resident accounts based on banks’ risk assessments and FEMA compliance, and encourage provision of digital interfaces for foreign exchange transactions, document submission, and transaction monitoring. The directions take effect six months from issuance of the circular and are issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007.