Guidelines to facilitate faster cross-border inward payments
The Reserve Bank of India issued notification RBI/2026-27/08 on April 9, 2026, establishing guidelines to accelerate the processing of cross-border inward payments at beneficiary banks in India.
Banks are now required to: (1) immediately notify customers upon receiving cross-border inward transactions; (2) undertake nostro account reconciliation on a near real-time basis or at intervals not exceeding one hour; and (3) credit inward payments received during forex market hours within the same business day.
The directive becomes effective six months from the date of issue — i.e., from October 9, 2026.
The directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007.
This initiative aligns with the RBI's Payments Vision 2025 and the G20 Roadmap for Enhancing Cross-Border Payments, which targets cheaper, faster, more transparent, and more accessible cross-border payments globally.
Cross-Border Payments Architecture: How Remittances Reach India
When funds are sent from abroad to India — whether as remittances from the Indian diaspora, business payments, or investment returns — they travel through a chain of correspondent banks before reaching the beneficiary's account in an Indian bank. The key bottleneck identified by the RBI is the 'beneficiary leg' — the time taken from when the payment arrives at the Indian beneficiary bank to when the customer's account is actually credited. This delay results from end-of-day (rather than real-time) nostro account reconciliation practices.
Key Details
- Nostro account: An account that a bank holds in a foreign currency with a correspondent bank abroad. When a cross-border payment arrives, it is first credited to the Indian bank's nostro account at its overseas correspondent, and then transferred to the beneficiary's domestic account — a process that historically required end-of-day batch reconciliation.
- SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the global messaging network that banks use to send cross-border payment instructions; India's banks are major SWIFT participants.
- India is the world's largest remittance-receiving country; FY25 remittances were approximately $129 billion.
- Delays in crediting remittances directly hurt migrant families who depend on timely fund transfers for immediate needs (medical, rent, school fees).
The RBI guideline mandates near-real-time nostro reconciliation (hourly at most) — addressing the primary delay point in the inward payment journey — so that customers are credited the same day rather than the next business day.
RBI Payments Vision 2025 and its Cross-Border Mandate
The RBI's Payments Vision 2025 is a multi-year strategic framework for developing India's payment and settlement systems, with five focus areas: Integrity, Inclusion, Innovation, Institutionalisation, and Internationalisation. The internationalisation pillar specifically targets cross-border payment efficiency, aligning with India's G20 commitments and the growing importance of international remittances to India's external sector.
Key Details
- Payments Vision 2025 was released in 2022 and covers the period up to 2025 (with extensions anticipated).
- Key metrics under Vision 2025: achieving a three-fold increase in the number of digital payment transactions; ensuring payment infrastructure reaches every corner of India; making India's payment systems interoperable internationally.
- The Vision document explicitly supports India's participation in the G20 cross-border payments roadmap — adopted at the 2020 Saudi Arabian G20 Presidency, under which FSB (Financial Stability Board) and CPMI (Committee on Payments and Market Infrastructures) are leading implementation.
- The G20 roadmap's quantitative targets for cross-border payments by 2027: global average cost below 3% of transaction value; 75% of retail payments completed within one hour; end-to-end payment transparency.
The April 2026 guidelines on near-real-time nostro reconciliation and same-day crediting are a direct implementation step under the Payments Vision 2025 cross-border efficiency mandate.
G20 Roadmap for Cross-Border Payments: India's Role
The G20 Roadmap for Enhancing Cross-Border Payments was developed by the FSB and CPMI and adopted at the G20 in 2020. It has three building blocks: (1) improving existing payment infrastructures (including extending RTGS operating hours and adopting ISO 20022 messaging standards); (2) creating interlinking of faster payment systems across borders; and (3) exploring common platforms for cross-border payments. India, as a major G20 economy and the world's largest remittance recipient, has a strong stake in the roadmap's success.
Key Details
- ISO 20022: A global messaging standard for financial transactions that carries richer data than legacy SWIFT formats — enabling better fraud detection, straight-through processing, and regulatory compliance.
- India's UPI has been internationalised through bilateral linkages: UPI-PayNow (Singapore), UPI-PromptPay (Thailand), UPI-Bhutan QR, and several others — consistent with the G20 interlinking objective.
- The Payment and Settlement Systems Act, 2007 (PSS Act) — specifically Section 10(2) and Section 18 — empowers the RBI to issue directions to authorised payment system operators.
- FEMA (Foreign Exchange Management Act, 1999) governs all foreign exchange transactions in India, including cross-border remittance receipts; banks must ensure FEMA compliance before crediting inward payments.
India's April 2026 RBI circular on faster cross-border inward crediting is a concrete, domestic-level implementation of the G20's multilateral commitment — demonstrating how global financial governance commitments translate into national regulatory action.
- RBI Notification: RBI/2026-27/08, dated April 9, 2026.
- Effective date: October 9, 2026 (six months from issue).
- Legal authority: Payment and Settlement Systems Act, 2007 — Section 10(2) read with Section 18.
- Key requirement: Nostro reconciliation at near-real-time or at intervals not exceeding one hour (vs. the earlier end-of-day practice).
- Same-day crediting: Inward payments received during forex market hours must be credited to beneficiary accounts within the same business day.
- India's remittances in FY25: approximately $129 billion — world's largest remittance-receiving nation.
- G20 cross-border payments target: Global average cost below 3% of transaction value by 2027; 75% of retail payments within one hour.
- RBI Payments Vision 2025: Five pillars — Integrity, Inclusion, Innovation, Institutionalisation, Internationalisation.
- UPI bilateral linkages (as of 2026): Singapore (PayNow), Thailand (PromptPay), Bhutan, Nepal, UAE, and others.
- FEMA, 1999: Governs foreign exchange management in India; all inward remittances must be FEMA-compliant before domestic crediting.