Streamlining International Fund Collections: New Guidelines for Government Portals

Introduction

New guidelines have been issued to enhance the process of collecting international receipts through government portals. These updated procedures aim to simplify and standardize the methods for receiving funds from abroad, ensuring efficiency and transparency in government financial transactions. This article details the revised framework for collecting international payments, covering various payment modes and responsibilities.

Understanding the Need for New Guidelines

Addressing International Payment Challenges

In response to requests from various Ministries and Departments, the need for a robust mechanism to collect government revenues from foreign countries has become evident. The existing systems required an upgrade to accommodate international payers more effectively, leading to the development of these new guidelines.

Building on Previous Directives

These new instructions build upon earlier Office Memorandums (OMs) issued concerning the use of domestic and international debit/credit cards on government portals and revised guidelines for the National Treasury Routing Platform (NTRP). The aim is to provide a comprehensive and updated framework for all international revenue collection.

Key Principles for International Receipts

Currency of Transactions

All revenues payable to the Government of India will be collected in Indian Rupees (INR). These guidelines specifically address scenarios where the government department’s receipt is already in INR. Separate directives will be issued for foreign currency receipts that require conversion into INR.

Approved Payment Methods

International payments for government revenues will be facilitated through two primary modes:

• SWIFT transfers
• International Debit/Credit Cards

Detailed Guidelines for SWIFT Transactions

SWIFT Mode Operations

For nationalized banks integrated with the NTRP, SWIFT transactions must strictly adhere to Reserve Bank of India (RBI) regulations, prevailing foreign exchange laws, and other applicable legal frameworks.

Exchange Rate Application

The applicable exchange rate for converting foreign currency to INR will be the rate prevailing on the day the deposit slip is generated on the bank’s portal. Banks are mandated to clearly indicate on their web pages and deposit slips that the amount is valid only for the same day, and the transaction must be initiated on that day.

Timely Fund Reception

Banks must ensure that remittances initiated by users on the government portal are received in their Nostro Account within T+2 global working days, where ‘T’ is the date of transaction initiation.

Handling of Delayed or Mismatched Funds

If funds are received after T+2 days, if there’s an amount mismatch, or if deposit slip details are missing in the SWIFT message, the user must be informed. The deposited funds will be returned to the originating bank, and the deposit slip will be considered expired. A fresh transaction will be required in such cases.

Remittance to Government Accounts

Authorized banks are required to remit the collected funds to the designated Government Account through settlement with the RBI within T+3 working days from the transaction initiation date.

Addressing Transaction Failures

In the event of a “Failed” transaction, the bank will refund the entire amount debited from the user. For “Failed after Success” transactions, the responsibility to ensure funds reach the Government Account within the stipulated timeline rests with the authorized bank, and chargebacks will not be permitted for the user.

Guidelines for International Debit/Credit Card Payments

Card Transaction Initiation

Users will initiate transactions using their international debit or credit cards, ensuring sufficient balance or credit limit and authorizing payment of all applicable charges, taxes, and levies.

Transaction Confirmation

Upon successful transaction completion, an Acquirer/Authorised Bank will generate a Unique Identification Number (UIN) linked to the Challan Reference Number (CRN) or CPIN, as specified by the respective government portal’s IT Division.

Refunds for Failed Transactions

If a transaction fails, the bank is responsible for refunding the entire amount debited from the user.

Handling “Failed after Success” Scenarios

Similar to SWIFT, for “Failed after Success” transactions, the authorized bank bears the responsibility for remitting funds to the government account within the specified period. Chargebacks by the user/remitter will not be allowed.

Remittance of Government Receipts

The authorized bank will remit the full eligible government receipt amount, excluding convenience fees, to the government account through RBI settlement within T+3 working days from the user’s transaction date.

User Responsibilities

Deposit Slip Adherence (SWIFT)

For SWIFT transactions, users must generate a deposit slip and initiate the remittance on the same day, following the payment instructions precisely as detailed on the slip.

Bearing Transaction Costs

Users are responsible for all applicable transaction charges, convenience fees, currency conversion fees, taxes, and other associated costs as per prevailing laws.

Fund Availability

Users must ensure they have sufficient funds or credit before initiating any transaction.

Handling Transaction Status Issues

If a government portal shows a “Failed” or “Response Awaited” status, users should wait at least 90 minutes before initiating a new transaction and should first verify the status with the concerned authorized bank.

Refund Claims

For “Success” or “Failed after Success” transactions where services are denied or canceled, refund claims must be submitted to the relevant Ministry/Department with supporting documentation.

Responsibilities of Banks and Payment Gateways

Transparency and Consent

Banks and Payment Gateways (PGAs) must clearly display all terms and conditions and obtain explicit user consent before transaction initiation. They will also show the equivalent INR amount, including all fees and taxes, for international currency payments.

Settlement and Remittance

Banks will settle funds with the RBI and remit them to the Government of India’s account within T+3 working days from the transaction initiation date.

Compliance with Refund and Chargeback Policies

Banks and PGAs must adhere to the established refund and chargeback policies, including those outlined in previous OMs and RBI guidelines. Importantly, chargebacks will not be permitted on government receipt portals; refunds must be processed through the Ministry/Department.

No Merchant Discount Rate (MDR)

No MDR or similar charges will be levied by banks/PGAs on Government Ministries/Departments.

Integration and Reporting

Banks/PGAs must comply with all integration requirements for onboarding and submit reports in prescribed formats for international transactions.

Nodal Officer Nomination

Each Acquirer Bank/Authorized Bank/PGA must nominate a Nodal Officer for coordination with the NTRP system.

Role of IT Divisions

Enabling Transaction Services

The IT Division of the relevant Ministry/Department is responsible for modifying its portal to enable these international payment services, specifically for receiving funds from foreign payers.

Displaying Policy Information

Clear display of refund, cancellation, and policy instructions on the government portal, with links for users to raise claims, is essential.

Record Maintenance

Maintaining transaction records and supporting documents for reporting and reconciliation purposes is a key responsibility.

Timelines and Penalties

Transaction Timeline Overview

Adherence and Penal Provisions

Banks/PGAs must strictly adhere to these timelines and Service Level Agreements (SLAs). Delays in remitting collected amounts to the RBI may attract penal provisions as per RBI guidelines and existing rules.

Force Majeure Clause

Neither party will be liable for delays caused by natural disasters, cyberattacks, government restrictions, network failures, war, or civil disturbances.

Concluding Remarks

Authority to Suspend Integration

The office reserves the right to suspend or withdraw the integration of any bank or PGA from the government portal in cases of non-compliance with these guidelines or other issued instructions.

Conclusion

These updated guidelines for collecting international receipts are crucial for modernizing government financial operations. By clearly defining processes for SWIFT and card payments, along with the responsibilities of all stakeholders, the government aims to create a more efficient, secure, and user-friendly system for receiving funds from abroad. Adherence to these regulations will ensure smoother transactions and better financial management.

Frequently Asked Questions

What is the primary currency for all government receipts collected internationally?

All revenues payable to the Government of India will be collected in Indian Rupees (INR).

What are the two approved methods for international payments?

International payments can be made via SWIFT transfers and through International Debit/Credit Cards.

What is the timeframe for funds to reach the Acquirer Bank’s Nostro Account via SWIFT?

Funds must be received within T+2 global working days, where T is the transaction initiation date.

When must funds be remitted to the Government of India’s account after a SWIFT transaction?

Funds must be remitted within T+3 working days.

What happens if a SWIFT transaction has a mismatch in amount or missing details?

The user will be informed, the funds will be returned, and a fresh transaction will be required.

What is the user’s responsibility regarding transaction charges for international card payments?

Users are responsible for all applicable transaction charges, convenience fees, currency conversion charges, taxes, and other levies.

Who is responsible for remitting funds in case of a “Failed after Success” card transaction?

The Authorised/Accredited Bank is responsible for remitting the funds to the Government Account.

Can a user initiate a chargeback for a “Failed after Success” transaction made via an international card?

No, chargebacks are not permitted to the user/remitter in such cases.

What is the maximum waiting period before a user should initiate a new transaction if the portal shows a “Failed” status?

Users should wait at least 90 minutes before initiating a fresh transaction and verify the status with the bank.

Under what circumstances can neither party be held liable for transaction delays?

Delays due to Force Majeure events like natural disasters, cyberattacks, government restrictions, network failures, war, or civil disturbances exempt parties from liability.