What changed
The circular now permits foreign inward remittances received under MTSS to be electronically transferred by the Partner Bank to a beneficiary’s KYC‑compliant account held with a Recipient Bank, subject to marking the transfer as a foreign inward remittance and providing required originator and beneficiary details.
What it means for you
The facility allows direct electronic credit of MTSS remittances to beneficiary accounts at Recipient Banks, with the Partner Bank marking the transfer as a foreign inward remittance and ensuring KYC/AML/CFT compliance; Recipient Banks must verify KYC compliance and may report suspicious transactions to FIU‑IND.
What you must do
- Ensure your bank's MTSS systems can tag electronic transfers as foreign inward remittances with appropriate alerts.
- Verify that beneficiary accounts at Recipient Banks are KYC compliant before crediting direct-to-account remittances.
- Include accurate originator and beneficiary information in all electronic remittance messages throughout the payment chain.
- Train staff on the new procedure and update internal MTSS guidelines to reflect the direct-to-account facility.
Who it affects
Indian Agents under MTSS (Partner Banks), Recipient Banks holding beneficiary accounts, Overseas principals sending remittances under MTSS, Beneficiaries receiving foreign inward remittances
Can we credit remittances to NRE/NRO accounts under this facility?
No, the Partner Bank must add an alert in the electronic message that the remittance should not be credited to NRE/NRO accounts or KYC non-compliant accounts.
What if the beneficiary's account is not KYC compliant?
The Recipient Bank must carry out KYC/CDD of the recipient before crediting the remittance or allowing withdrawal from that account.
Do we need to report suspicious transactions under this facility?
Yes, the Recipient Bank must report suspicious transactions to FIU-IND, including details of the Partner Bank through which the remittance was received.