Framework on Cross-Border Remittances

Framework on Cross Border Remittances

INTRODUCTION:

SVC Cooperation Bank Ltd., an Authorized Dealer Category – I Bank to deal in Foreign Exchange, offers wide range of Foreign Exchange Products to its Customers and facilitates smooth transaction processing of their Cross Border Transactions. 

These transactions are undertaken in accordance with the Foreign Exchange Management Act, 1999 (FEMA), Rules, Regulations, Directions and Guidelines issued by the Reserve Bank of India from time to time and various other Government / Statutory provisions, as applicable.

This document defines the broad framework governing the Cross Border transactions and sets out the key principles related to transaction processing, customer due – diligence, documentation requirements, applicable charges, service timelines and the grievance redressal mechanism to promote transparency and ensure seamless customer experience.

As the Cross Border transactions involve various Risks, the Bank may seek further documentation based on the specific purpose code or the nature of underlying transaction, transaction value, customer risk profile, regulatory requirements etc. Enhanced Due Diligence (EDD) may be conducted for certain categories of remittances, high-value transactions, sensitive jurisdictions, or where otherwise required under applicable regulations and internal policies. 

Processing of the remittance shall be subject to satisfactory completion of KYC, AML, sanctions screening, FEMA compliance, and other regulatory checks undertaken by the Bank.

Inward Remittances

1. Coverage
   This section covers the steps involved in processing of inward remittances i.e. receipt of funds from outside India in favor of Resident as well as Non-Resident Individuals and / or Entities for legitimate and Bonafide purposes. They are broadly bifurcated into Current Account and Capital Account transaction based on the nature of the receipt and can be further segregated into Trade, Non-Trade or Personal remittances
    
2. End-to-End Process

• Initiation of the remittance by the Remitter through its bank.
• Clearing or settlement of FCY Funds at the respective jurisdiction (location) and credit to the Nostro Account of SVC Bank (Receipt of Credit)
• Matching of the Credit with Inward Payment details after due screening and AML checks.
• Intimation of the Credit to the Customer and its Branch requesting the supporting documents and the disposal instructions.
• Submission of the requisite & complete documents/declarations by the Customer.
• Independent validation or checking of the remittance details against the documents submitted by the Customer.
• Processing of the transaction and credit to the customer through a strict maker-checker concept.
• SMS to the customer on its registered mobile number immediately upon credit followed by detailed credit advice early next day.
• Reporting of the transaction to various regulatory authorities on periodic basis and depending on the nature of the transaction.
• Completion of Trade Related formalities viz. reporting of inward remittance to DGFT for eBRCs to EDPMS portal for IRM etc.

1. Processing of Inward Remittance 
   Whenever a customer gets a wire transfer or TT from outside India, the funds get routed through the overseas correspondent bank account of SVC Bank (Nostro account) of the respective currency. SVC Bank is then required to ensure the related compliance, documents verification, regulatory checks etc. before the final credit is released to the customer account.

• Step 1 – Receipt of the Remittance
  When the Bank receives the credit in its Nostro account, it checks the following details received along with the remittance.

1. Name & address of the person/company sending the money (remitter)
2. Details of the remitter bank.
3. Name & address of the beneficiary.
4. Beneficiary's account details
5. Date, Currency & Amount
6. Payment reference
7. Purpose/reason for sending the money
8. Other information provided by the remitter bank.

• Step 2 – Providing Documents / Information
  After the above-mentioned initial checks and validations, the Bank intimates the credit to the customer and its branch on its registered email and requests for additional information i.e. the underlying documents as per the purpose of the remittance.
  Along with a Declaration under FEMA and the Disposal Instructions, below are some of the standard documents / information that is generally sought from the customers, i.e. the beneficiary of the credits.

* The Bank may request additional documents based on risk, amount, purpose, remitter, country, account status and applicable law along with FEMA declaration.

Tip for exporters: Always mention the relevant invoice/shipping bill/bank reference number in the payment instructions given to your overseas buyer. This can substantially reduce the time required for identification and matching export proceeds.

• Step 3 – Determination of Applicable Purpose
  The Bank is required to classify the remittance under the appropriate purpose code / category based on the nature / type of the transaction for further regulatory reporting. Therefore, it is imperative for the customers to provide the accurate purpose of the remittance in their declarations.

FETERS Purpose code Selection Guide

*These are common purpose codes for Current and Capital account receipts. 

• Step 4 – Account credit and Cut-off Timelines
  For the inward remittance received in foreign currency, the Bank will convert the foreign currency into Indian Rupees at the applicable exchange rate or credit same to customer’s FCY (EEFC) account as it is, after deducting applicable charges and taxes. Bank to receive disposal instructions along with complied document within the cut-off timing i.e. by 2:30 p.m. for the same day processing / credit. Documents / disposal received after 2:30 p.m. shall be handled and processed on the next Forex working day. An automated SMS/Email advice is delivered to the customer containing the necessary transaction details.

• Processing Timelines 

*The actual processing time depends on the completeness of the remittance information, documents required, regulatory checks and the nature of the transaction. 

Ensure following to process your Remittance Faster

1. For the person sending money from overseas, please ensure that the remitter provides: Your correct bank name/branch + Account number + SWIFT/BIC + Correct purpose of payment
2. For export payments, additionally mention: Invoice Number / Shipping Bill Number / Exporter details / Bank reference number
3. For customers receiving inward remittances, please:

• Keep your KYC details updated.
• Provide the correct purpose of the remittance.
• Keep supporting documents readily available.
• Respond promptly to the Bank's queries.
• Ensure that the remitter provides accurate beneficiary information.
• For export receipts, provide invoice/shipping bill details.

• Schedule of Charges:

Outward Remittances

1. Coverage

This section covers the steps involved in processing of onward remittances i.e. payments outside India in favor of Non-Resident / Foreign Individuals and / or Entities for legitimate and Bonafide purposes. They can also be broadly bifurcated into Current Account and Capital Account transaction based on the nature of payment and can be further segregated into Trade, Non-Trade or Personal remittances (LRS). Forex outward remittances can be initiated by resident individuals, entities, NRIs and other eligible customers.

1. End-to-End Process

• The customer submits the remittance request via a branch visit or direct email to the branch/trade finance team for certain transactions.
• Compliance Officer at TF dept. reviews documents against FEMA, RBI, and internal guidelines, then notifies the customer or branch of any discrepancies.
• Once documents are complied, officer confirms exchange rate (if applicable) with customer/branch by taking rates from Treasury dealer.
• By executing a strict maker-checker operational control transaction processed in CBS to generate SWIFT messages.
• SWIFT authorizer transmitted the message to the correspondent bank subsequent to mandatory AML reviews and compliance screening.
• Intimation of the debit via email to the customer on its registered email id along with swift copy.
• Bank is reporting transactions to regulatory authorities periodically or as required by the transaction type via IDPMS, FETERS, or CIMS, etc.

Documentation

*Outward remittances are subject to extant RBI/FEMA/DGFT guidelines and Bank can ask for additional documentation accordingly.

• Common Purpose Codes for Individuals (LRS Remittances)

• Processing Timelines 

Please note: The actual processing time depends on the completeness of the remittance information, documents required, regulatory checks and the nature of the transaction. 

• Schedule of Charges

*Schedule of Charges. Schedule Of Service Charges For Forex Transactions (Effective From 1st July, 2024)

• Forex daily card rate - https://www.svc.bank.in/forex-daily-rate-card
• NOSTRO details - https://www.svc.bank.in/nostro-account
• Grievance redressals

Information relating to Daily Fx Card rates, charges, documentation requirements and other applicable terms and conditions for cross-border foreign exchange transactions and services of member banks is available on the website of the Foreign Exchange Dealers’ Association of India (FEDAI). Customers may access the relevant information through the Member Banks Information Hub.

Disclaimer:

Forex products are offered subject to certain eligibility criteria as per the Bank’s Internal Policy and at Bank’s discretion.