Cross-border payments: RBI for same-day credit, Pg17.

Key Highlights:

• The Reserve Bank of India (RBI) has proposed measures to expedite cross-border payments, aiming for same-day credit to recipients.
• Banks will be mandated to credit inward remittances received during foreign exchange market hours on the same business day.
• Remittances received after market hours should be credited on the next business day, according to the draft circular.
• The RBI aims to eliminate delays between a bank's receipt of funds and the credit to the beneficiary's account.

Detailed Insights:

• The RBI's proposal addresses the challenge of delays in crediting beneficiaries' accounts after the receipt of cross-border payments by banks.
• Banks are encouraged to implement 'straight-through' automated systems for direct credit of inward payments after risk assessment.
• Digital platforms for document uploads and transaction tracking are recommended to enhance customer experience and transparency.
• Immediate notification of cross-border inward transactions to customers upon receipt is also part of the proposed measures.

Key Concepts Involved:

• Cross-border Payments: Transactions where the payer and recipient are in different countries.
• Inward Remittances: Money sent from abroad into a country.
• Straight-Through Processing (STP): Automated processing of transactions without manual intervention.