The Reserve Bank of India has issued new directions to banks to reduce delays in crediting cross-border inward remittances. The move aims to improve the speed, transparency, and customer experience of foreign exchange transactions. It comes amid concerns that many banks depend on end-of-day nostro account statements, which slows down reconciliation and final credit to beneficiaries.
Key RBI Directions
- Banks must reconcile and confirm credits in nostro accounts more frequently.
- The process should be near real-time or at periodic intervals.
- The reconciliation gap should normally not exceed one hour.
- Banks should credit inward payments received during foreign exchange market hours on the same business day.
- Payments received after market hours should be credited on the next business day, subject to FEMA and other rules.
Impact on Beneficiaries
- Customers should receive immediate intimation when a cross-border inward transaction is received.
- If a message arrives after bank operating hours, it should be communicated at the start of the next business day.
- The new framework is expected to reduce waiting time for remittances.
- It may also improve certainty for individuals and businesses receiving foreign funds.
Digital Interface Requirement
- Banks have been asked to provide a digital interface for foreign exchange transactions.
- The interface should support submission of documents and information.
- It should also allow customers to monitor the status of transactions.
- The measure is intended to make cross-border payment processing more efficient and user-friendly.
Regulatory Significance
- The guidelines strengthen operational efficiency in the banking system.
- They align with broader efforts to modernise payment infrastructure in India.
- They also reinforce compliance with FEMA and related regulatory requirements.
- The directions are important for faster remittances, better reconciliation, and improved customer service.