RBI Draft Mandates Faster Cross-Border Inward Payments at Beneficiary Banks
SDG 8: Decent Work and Economic Growth | SDG 17: Partnerships for the Goals
Institutions: Reserve Bank of India (RBI) | Ministry of Finance
The Reserve Bank of India (RBI), under its Payments Vision 2025 and the G20 roadmap, has issued Draft Guidelines to all Scheduled Commercial Banks to enhance the speed and efficiency of cross-border inward remittances. The circular, which is currently open for feedback from stakeholders, focuses on eliminating delays at the beneficiary leg—the time taken from receipt of payment by the beneficiary bank till credit to the customer’s account. The goal is to make cross-border payments cheaper, faster, more transparent, and more accessible.
The draft mandates that banks streamline their internal processes through several key directions:
Real-time Reconciliation: Banks must undertake Nostro account reconciliation on a near real-time basis or at periodic intervals, with the reconciliation interval not normally exceeding thirty minutes.
Immediate Intimation: Banks shall inform their customer of the receipt of an inward transaction immediately upon receiving the inward message.
Same-Day Credit Target: Banks must endeavour to credit the inward payments received during foreign exchange market hours within the same business day.
Digital Interface: Banks should endeavor to provide a digital interface to customers for foreign exchange transactions, including the submission of documents and transaction monitoring.
This directive, once finalized, will represent a significant regulatory step under the Payment and Settlement Systems Act, 2007. It directly addresses a critical pain point for remittances—delays in the final credit leg—to boost worker confidence, formalize remittance channels, and enhance India’s competitiveness in the global payment system landscape.
What is the RBI’s Payments Vision 2025?→ The RBI’s Payments Vision 2025 is a comprehensive strategic document (2022–2025) aiming to establish India as a global powerhouse in the payments domain by driving a transformation that is safe, secure, fast, convenient, accessible, and affordable. Its core theme is ‘E-Payments for Everyone, Everywhere, Everytime’ (4Es). The vision is structured around five anchor goals—Integrity, Inclusion, Innovation, Institutionalisation, and Internationalisation—with the current draft guidelines specifically addressing the goal of Internationalisation by making cross-border payments cheaper and faster.
What is a Nostro Account?→ A Nostro Account (Latin for “ours”) is an account held by an Indian bank (the beneficiary bank in this context) in a foreign country, typically in that country’s currency, with another bank. Cross-border inward payments are first routed to the Indian bank’s Nostro account abroad before being credited to the final beneficiary’s account in India, making timely reconciliation of the Nostro account essential for speed.
Follow the full news here: Guidelines to facilitate faster cross-border inward payments (RBI Circular)