RBI Mandates Same-Day Credit for Inward Remittances to Boost Efficiency
RBI mandates payment of inward remittances on same business day
The Economic Times
Image: The Economic Times
The Reserve Bank of India (RBI) has mandated that banks credit inward remittances received during foreign exchange market hours to beneficiary accounts on the same business day. This move aims to enhance the efficiency of remittance processing, as currently only 8-10% of such transactions are credited promptly, compared to 75% in the United States.
- 01RBI mandates same-day credit for inward remittances during market hours.
- 02Less than 10% of remittances in India are credited promptly, significantly lower than the US.
- 03Banks have six months to comply with the new regulations.
- 04Real-time reconciliation of nostro accounts is required to reduce delays.
- 05India remains the world's largest recipient of remittances, exceeding $135 billion in 2025.
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The Reserve Bank of India (RBI) has issued a circular requiring banks to credit inward remittances received during foreign exchange market hours to beneficiary accounts on the same business day. Currently, only 8-10% of these remittances are processed quickly, in stark contrast to the 75% efficiency seen in the United States. To enhance efficiency, banks have been given six months to implement this requirement. Additionally, the RBI has directed banks to reconcile and confirm credits in their nostro accounts at least every 30 minutes or in real-time. This change aims to address delays caused by banks relying on end-of-day statements for confirming receipts. In 2025, India is projected to remain the world's largest recipient of remittances, totaling over $135 billion, underscoring the importance of these funds in supporting individual consumption and managing external sector risks.
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This regulation is expected to significantly improve the speed at which remittances are credited, benefiting recipients and enhancing financial inclusion.
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