RBI Mandates New Norms for Efficient Cross-Border Payments

The Reserve Bank of India has directed banks to enhance their processes for cross-border payments by ensuring immediate customer notification upon receipt of funds and timely credit to beneficiaries. The central bank aims for same-day fund credit during forex hours and recommends digital interfaces for efficient transaction monitoring.

The Reserve Bank of India (RBI) has taken a significant step to streamline cross-border payment processes by mandating immediate customer notification once funds are deposited into their accounts. This directive aims to enhance the efficiency of inward payments and ensure timely credit to beneficiaries.

According to the RBI's new guidelines, banks are expected to inform customers of payment receipts immediately, or the following day if the transaction falls outside forex market hours. Additionally, nostro account reconciliation must occur within an hour of payment notification. The central bank is advocating for same-day fund credit within foreign exchange market hours.

The RBI's announcement follows stakeholder feedback on draft norms issued in 2025. Banks are encouraged to adopt straight-through processing based on risk assessments and to develop digital interfaces for better transaction monitoring and documentation. The new norms will be effective six months from the date of the issued circular, with a focus on compliance with FEMA and other regulations.

(With inputs from agencies.)