In order to facilitate the receipt of foreign inward remittances directly into the bank accounts of the beneficiaries, it has been decided to allow foreign inward remittances received under Rupee Drawing Arrangement (RDA) to be transferred to KYC-compliant beneficiary bank accounts through electronic modes, such as NEFT, or IMPS subject to the procedure and conditions mentioned therein.
As per Para 6 of the Statement on Developmental and Regulatory Policies issued on August 5th 2022, it has been decided to allow foreign inward remittances received under the Rupee Drawing Arrangement (RDA), to be transferred to the KYC-compliant bank account of the biller (beneficiary) through Bharat Bill Payment System (BBPS), subject to the conditions mentioned in Para 3 of A.P. (DIR Series) Circular No.120 dated April 10th 2014.
The procedure to be followed for the purpose will be as under:
Foreign inward remittances received by the AD Cat-I Bank (termed as ‘Partner Bank’) having RDA with Non-Resident Exchange Houses may be credited directly to the account of the beneficiary held with a bank other than the AD Cat-I Bank (termed as ‘Recipient Bank’) electronically, subject to the following conditions:
- The Recipient Bank will credit the amount transferred by the Partner Bank only to the KYC-compliant bank accounts.
- In respect of the bank accounts which are not KYC-compliant, the Recipient Bank shall carry out KYC/CDD of the recipient before the remittance to such account is credited or allowed to be withdrawn.
- The Partner Bank (i.e. the AD Cat-I Bank receiving foreign inward remittance through non-resident exchange houses under RDA) shall appropriately mark the direct-to-account remittances to indicate to the Recipient Bank that it is a foreign inward remittance.
- The Partner Bank shall ensure that accurate originator information and necessary beneficiary information is included in the electronic message while transferring the fund to the Recipient Bank. This information should be available in the remittance message throughout the payment chain, i.e., the Non-Resident Exchange House, the Partner Bank and the Recipient Bank. The Partner Bank should add an appropriate alert in the electronic message indicating that this is a foreign inward remittance and should not be credited to a KYC non-compliant account.
- The identification and other documents of the recipient shall be maintained by the Recipient Bank as per the provisions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. All other requirements under KYC/AML/CFT guidelines issued by the Reserve Bank of India from time to time shall be adhered to by the Partner Bank.
- The Recipient Bank may seek additional information from the Partner Bank and shall report suspicious transactions to the FIU-IND with details of the Partner Bank through which they received the remittances.
The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law