Reserve Bank of India Instructs Banks to Expedite Inward Foreign Payments with Enhanced Alert System and One-Hour Reconciliation

Reserve Bank of India Issues New Directives for Cross-Border Payments

The Reserve Bank of India (RBI) has issued a directive to banks to streamline their processes for inward cross-border payments, aiming to ensure faster customer notification and timely credit to beneficiaries. According to a notification issued by the central bank, banks are now mandated to inform customers immediately once a payment is made into their accounts. In cases where a payment happens outside of forex market hours, they will have to inform the customer the next day.

The RBI has also sought the reconciliation of nostro accounts within an hour, as per the notification. To further facilitate foreign exchange transactions, the central bank has encouraged lenders to endeavour to credit funds within the same business day during foreign exchange market hours. Additionally, it has recommended the adoption of straight-through processing based on risk assessment, and the development of digital interfaces to facilitate foreign exchange transactions, including submission of documents or information, and monitoring of transactions.

These new norms were issued after examining the feedback received from stakeholders on the draft norms issued on October 29, 2025. The new changes will be effective after six months from the issue of the circular, as stated by the RBI. As per the new norms, banks need to inform their customers immediately after the receipt of a message related to cross-border inward payments, but are not mandated to credit the amount immediately.

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The circular also requires intermediary banks to inform the beneficiary bank of the receipt of cross-border inward transactions without delay. Furthermore, banks may implement straight-through processing (STP) based on their own risk assessment, FEMA, and other regulatory requirements. There is no restriction in extending STP to customers other than individuals, subject to adherence to risk management and FEMA requirements.