NEWS
RBI introduces tighter norms to speed up inward cross-border remittances
RBI’s directives include immediate customer intimation and and faster reconciliation of nostro accounts to reduce delays in crediting funds to beneficiaries.
RBI’s directives include immediate customer intimation and and faster reconciliation of nostro accounts to reduce delays in crediting funds to beneficiaries.
The Reserve Bank of India (RBI) on Thursday tightened rules for banks to process inward cross-border remittances.
The directives include immediate customer intimation and and faster reconciliation of nostro accounts to reduce delays in crediting funds to beneficiaries.
The central bank said delays often occur at the end of the beneficiary bank to credit funds after receiving payment messages.
“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,” RBI said.
The revised rules will come into effect after six months.
Banks will have to inform customers immediately upon receipt of inward cross-border payment messages.
Messages received after the close of operating hours must be communicated to customers at the start of the next business day.
The RBI said several banks rely on end-of-day nostro account statements to confirm and reconcile receipts, which can delay crediting funds to beneficiaries.
Banks have accordingly been directed to undertake reconciliation and confirmation of credits in the nostro account more frequently — either on a near real-time basis or at periodic intervals, with the gap not exceeding one hour.
“Banks shall endeavour to credit the inward payments received during 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,” the RBI said.
The RBI has also allowed banks to put in place straight-through processing for crediting inward payments to the accounts of resident individuals based on their risk assessment and subject to compliance with Foreign Exchange Management Act (FEMA), 1999 guidelines.
The RBI also urged banks to provide digital interfaces to customers to facilitate foreign exchange transactions, including submission of documents or information and monitoring of transactions.
