What changed
Earlier, RDA remittances were credited only to the beneficiary’s account held with the Partner Bank’s vostro account; now they can be transferred electronically to the beneficiary’s bank account via NEFT/IMPS, subject to KYC compliance.
What it means for you
Banks can now offer faster, electronic settlement of RDA remittances, reducing manual intervention and improving customer experience. However, recipient banks must ensure KYC compliance before crediting, and partner banks must embed clear alerts and originator details to prevent misuse. This tightens AML/CFT controls across the payment chain.
What you must do
- Update RDA operating procedures to enable electronic transfer (NEFT/IMPS) to recipient banks for KYC-compliant accounts.
- Ensure electronic messages include accurate originator and beneficiary info and an alert flagging the remittance as foreign inward.
- Recipient banks must verify KYC compliance before crediting; for non-compliant accounts, complete CDD first.
- Partner banks must report suspicious transactions to FIU-IND with recipient bank details.
- Train staff on the new direct-to-account process and AML/CFT obligations.
Who it affects
Category-I Authorised Dealer Banks (Partner Banks), Recipient Banks (where beneficiary accounts are held), Non-resident Exchange Houses under RDA, Beneficiaries of foreign inward remittances
Can we credit RDA remittances to non-KYC compliant accounts?
No. The recipient bank must first complete KYC/CDD of the beneficiary before crediting or allowing withdrawal from such accounts.
What information must be included in the electronic remittance message?
Accurate originator information, necessary beneficiary details, and an alert indicating it is a foreign inward remittance that should not be credited to a KYC non-compliant account.
Does this circular replace earlier RDA instructions?
No. All other instructions from A.P. (DIR Series) Circular No. 28 dated February 6, 2008, as amended, remain unchanged.