RBI tightens rules to speed up inward cross-border payments

MUMBAI: The Reserve Bank of India (RBI) on Thursday tightened rules governing how banks process inward cross-border payments, seeking to reduce delays in crediting funds to beneficiaries and align India’s payments framework with the G20 roadmap for faster and more transparent global transfers.

The central bank said delays often arise at the beneficiary bank stage, after the funds reach the bank but before they are credited to the customer’s account, slowing the overall speed of cross-border payments.

“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 notified in the revised rules on Thursday.

The new framework will come into effect after six months.

Under the revised rules, banks must inform customers immediately upon receiving a message that an inward cross-border payment has been credited to them. Messages received after the close of operating hours must be communicated to customers at the start of the next business day.

The regulator also addressed delays caused by reconciliation practices. RBI said several banks rely on end-of-day statements of their nostro accounts to confirm receipts, which can postpone crediting funds to beneficiaries.

To expedite the process, banks have been directed to reconcile and confirm credits in their nostro accounts more frequently—either on a near real-time basis or at periodic intervals. “The reconciliation interval should normally not exceed one hour,” RBI said.

This represents a relaxation from draft norms issued in October 2025, which had proposed capping the reconciliation window at thirty minutes.

A nostro account is a bank account held by a domestic bank in a foreign bank, denominated in that foreign country’s currency. Such accounts are used to facilitate international trade and cross-border transactions, and allows banks to manage foreign currency liquidity and process payments without the need for foreign branches.

These guidelines will accelerate inward remittances by mandating hourly nostro reconciliation, same-day crediting during forex market hours, straight-through processing (STP) for individuals, and digital customer interfaces, said Utkarsh Bhatnagar, partner, Cyril Amarchand Mangaldas. "Implementation will require banks to upgrade real-time reconciliation systems, adopt automated STP infrastructure, and roll out digital platforms within six months, creating valuable opportunities to modernize operations and enhance customer experience.”

RBI also urged banks to “endeavour” to credit inward payments received during foreign exchange market hours within the same business day, and those received after market hours on the next business day.

The central bank said banks may put in place straight-through processing for crediting inward payments to accounts of individual residents, based on their risk assessment and subject to compliance with Foreign Exchange Management Act, 1999 guidelines.

It also urged banks to provide customers with a digital interface for foreign exchange transactions, including submission of documents or information and monitoring of transactions.