RBI Directs Banks To Speed Up Inward Foreign Payments With Instant Alerts, One-Hour Reconciliation

Mumbai, April 9: The Reserve Bank of India (RBI) has issued new guidelines to improve the processing of inward cross-border payments by banks. The objective is to ensure faster customer notifications and quicker crediting of funds to beneficiaries.

Immediate Customer Notifications

Banks are now required to notify customers as soon as a payment is credited to their accounts. In cases where payments occur outside foreign exchange market hours, customers must be informed on the next business day to maintain transparency and keep customers updated promptly.

Timely Reconciliation and Same-Day Crediting

The RBI has mandated that reconciliation of nostro accounts be completed within one hour. Additionally, lenders are urged to credit funds on the same business day during foreign exchange market hours whenever possible.

Encouragement to Implement Straight-Through Processing and Digital Platforms

Banks are encouraged to adopt straight-through processing (STP) after completing necessary risk assessments. The central bank also advises the development of digital platforms to streamline foreign exchange transactions, including digital document submission and transaction monitoring.

Background and Effective Date

These guidelines follow stakeholder feedback on draft norms issued on October 29, 2025. The new regulations will be effective six months after the circular’s release, allowing banks adequate time for implementation.

Additional Clarifications and Compliance

Under the updated norms:

  • Banks must notify customers immediately upon receiving messages related to inward cross-border payments; however, immediate crediting is not mandatory.
  • Intermediary banks should promptly inform beneficiary banks upon receipt of such transactions.
  • Banks should make efforts to credit inward payments on the same day, in compliance with the Foreign Exchange Management Act (FEMA) and other applicable regulations.
  • STP adoption is at banks’ discretion based on internal risk evaluations, FEMA guidelines, and regulatory requirements.
  • STP services can be extended beyond individual customers if risk management and FEMA obligations are satisfied.

Key Takeaways

  • RBI mandates immediate customer alerts for inward foreign payments.
  • Reconciliation of nostro accounts must be completed within one hour.
  • Banks should aim for same-day crediting during foreign exchange market hours.
  • Straight-through processing is encouraged following proper risk assessments.
  • New regulations to be effective six months after circular issuance.

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