RBI vide RBI/2013-14/511 A.P. (DIR Series) Circular No. 110 dated March 4, 2014 has decided to allow foreign inward remittances received under Money Transfer Service Scheme (MTSS) to be transferred to the KYC compliant beneficiary bank account through electronic mode, such as NEFT, IMPS etc. with a view to facilitate receipt of Foreign Inward Remittances directly into bank account of beneficiary.
Accordingly, RBI has prescribed the procedure to be followed in this regard.
Foreign inward remittances received by the bank acting as Indian Agent under MTSS (termed as 'Partner Bank'), may be electronically credited directly to the account of the beneficiary, held with a bank other than the Indian Agent Bank (termed as 'Recipient Bank'), subject to the following conditions:
A. The Recipient Bank will credit the amount transferred by the Partner bank only to KYC compliant bank accounts.
B. 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Bank shall carry out KYC/ CDD of the recipient before the remittance to such account is credited or allowed to be withdrawn.
C. The Partner Bank shall appropriately mark the direct-to-account remittances to indicate to the Recipient Bank that it is a foreign inward remittance.
D. 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 overseas principal, 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 KYC non-compliant account and NRE/NRO account.
E. The identification and other documents of the recipient shall be maintained by the Recipient Bank as per the provisions of Prevention of Money Laundering (Maintenance of Records) Rules, 2005. All other requirements under KYC/AML/CFT guidelines issued by the Reserve Bank of India for MTSS from time to time shall be adhered to by the Partner Bank.
F. 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 content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.