Separate the clocks and the funding obligation
For foreign-currency drawing arrangements covered by paragraph 6 of RBI's Master Direction on non-resident exchange-house vostro accounts, the daily aggregate of drafts must reach the drawee bank's nostro account by close of business on the second working day. Non-DDA drawing information has a separate following-working-day deadline. These timing rules coexist with the requirement that foreign-currency accounts remain funded at all times; they are not permission to pay drafts from an unfunded account. This guide covers the settlement calendar, rather than collateral sizing. RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026.
Confirm that paragraph 6 is the right arrangement
The direction requires prior RBI approval for each foreign-currency tie-up with an exchange house with which the bank has an RDA. Foreign-currency and Rupee arrangements must be distinct, with a separate foreign-currency vostro account. Drafts may be drawn on A or B category branches, not C category branches. Establish the approved arrangement and the account map before applying a two-working-day calendar borrowed from another product. RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026.
Run separate daily drawing and message registers
Paragraph 6(d) concerns the aggregate foreign-currency drafts drawn on a day and credit to the drawee bank's nostro account. Paragraph 6(g) requires Non-DDA houses to communicate the number and aggregate value of drafts by electronic mode before close of the following working day. Under DDA the paragraph specifies frequent information, at least on a bi-weekly basis. Do not substitute a timely message for receipt of funds, or a funding entry for a complete drawing-information record. RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026.
Confirmation is the bridge to the vostro
Under paragraph 6(e), the account-maintaining branch credits the exchange house's foreign-currency vostro on confirmation of credit to its nostro. Draft payments debit the separate vostro, not the AD bank's nostro directly. Track the drawing cohort, actual nostro confirmation, corresponding vostro entry and draft-payment debit as distinct events. An exchange-house remittance advice is not necessarily confirmation of actual bank-account credit. RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026.
Define the working calendar before calculating a date
Use a documented operational calendar, cut-off and timezone appropriate to the arrangement and settlement centres. The examples use a fictional common Monday-to-Friday working calendar, weekends closed and no holidays except one expressly assumed closure. They illustrate counting the next working days, not actual Indian or overseas bank-holiday determinations. Resolve differing local holidays and confirmations with the account-maintaining bank instead of assuming that a calendar-day addition establishes compliance. RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026.
Review balances as well as deadlines
A daily cohort may meet the second-working-day deadline yet a payment attempted earlier may still breach the requirement for funding at all times. RBI's concurrent-audit provisions also require checking that vostro credit precedes beneficiary payments. Maintain an opening balance, confirmed credits, payment debits and closing balance; separately monitor unsettled cohorts. Escalate short credits, missing messages, stale confirmations and posting differences under the approved operational procedure, without treating collateral as a substitute for funds. RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026.
Applicable primary references
RBI Master Direction on exchange-house vostro accounts, paragraphs 6 and 7(b), updated October 2026
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Ordinary weekday drawing
Using the stated fictional calendar, drafts drawn on Monday 26 October 2026 have Tuesday 27 October as working day one and Wednesday 28 October as working day two. The model nostro-credit deadline is close of business on 28 October. This calculation does not permit an intervening unfunded beneficiary payment.
Illustrative example 2: Weekend in the funding window
Drafts drawn on Friday 30 October 2026 have Monday 2 November as working day one and Tuesday 3 November as working day two. The model deadline is 3 November, not Sunday 1 November. The calculation assumes both weekdays are open in every calendar relevant to this model.
Illustrative example 3: An expressly fictional holiday
For the same Friday 30 October drawing, assume Monday 2 November is additionally closed in the model settlement calendar. Tuesday 3 November becomes working day one and Wednesday 4 November day two. The deadline moves from 3 November to 4 November by one calendar day. This is an invented closure for illustration, not a statement of a real holiday.
Illustrative example 4: Message and funding dates differ
For Non-DDA drafts drawn on Tuesday 27 October 2026, the model next-working-day communication deadline is close of Wednesday 28 October. The second-working-day nostro deadline is close of Thursday 29 October. These are separate controls one calendar day apart in this example; neither replaces the obligation to keep accounts funded.
Illustrative example 5: Daily aggregate and partial credit
Three drafts in one currency total USD 10,000, USD 15,000 and USD 5,000. The drawing cohort is three drafts totalling USD 30,000. If only USD 28,000 has reached the nostro by the applicable deadline, the cohort is USD 2,000 short. A correct message stating USD 30,000 does not eliminate that funding shortfall.
Illustrative example 6: Confirmation, posting and available funds
The model begins with a funded vostro balance of USD 8,000. Nostro confirmation supports a further USD 30,000, but only USD 25,000 is posted to the vostro. After a USD 20,000 payment debit, the posted balance is USD 13,000. If the entire confirmed amount were properly posted, it would be USD 18,000; the USD 5,000 posting difference requires reconciliation before relying on the larger balance.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Verify the approved tie-up | RBI approval and foreign-currency arrangement scope. |
| 2 | Map the bank accounts | Separate nostro, foreign-currency vostro and Rupee arrangement references. |
| 3 | Confirm eligible drawee branches | Approved A or B category branch list. |
| 4 | Document the calendar and cut-offs | Applicable working-day, timezone and closure evidence. |
| 5 | Total each daily drawing cohort | Count, currency, aggregate value and unique draft references. |
| 6 | Track the information deadline | Non-DDA following-working-day message evidence or applicable DDA information control. |
| 7 | Track actual nostro credit | Bank confirmation and second-working-day comparison. |
| 8 | Match the vostro credit | Posting reference tied to the confirmed nostro amount. |
| 9 | Check payment funding in sequence | Opening balance, credits before payments and debit trail. |
| 10 | Close and escalate exceptions | Shortfall, delay and posting-difference investigation with audit evidence. |
Sixteen practitioner FAQs
1. Is this a calendar for every foreign remittance?
No. It concerns the paragraph 6 foreign-currency drawing arrangements in the specified RBI direction.
2. Does each foreign-currency tie-up require approval?
Paragraph 6 requires RBI approval for each such arrangement.
3. Can the Rupee and foreign-currency arrangements be combined in one control balance?
The direction requires them to remain distinct and requires a separate foreign-currency vostro.
4. May a C category branch participate?
Paragraph 6(a) excludes C category branches from this arrangement.
5. What must reach the nostro by the second working day?
The aggregate foreign-currency drafts drawn by the exchange house on the relevant day.
6. Is sending an advice enough to establish actual credit?
No. Track actual credit confirmation rather than treating an instruction as completed settlement.
7. When is the Non-DDA drawing information due?
Before close of the following working day, by electronic mode, with number and aggregate value of drafts.
8. Is the Non-DDA message deadline the same as the funding deadline?
No. They are distinct controls with different specified timing.
9. What information frequency is stated for DDA?
Paragraph 6(g) calls for frequent information, at least on a bi-weekly basis; do not substitute the Non-DDA sentence without checking the arrangement.
10. When should the foreign-currency vostro be credited?
On receipt of confirmation that the drawee AD bank's nostro has been credited.
11. Which account is debited to pay the drafts?
The separate foreign-currency vostro, not the AD bank's nostro directly.
12. Does the second-working-day rule authorise an overdraft before then?
No. Accounts must remain funded and payment-funding controls continue to apply.
13. Are the illustrated holidays official bank holidays?
No. The common working calendar and one closure are explicit modelling assumptions.
14. What if settlement centres have different holidays?
Resolve the applicable calendar and cut-offs with the account-maintaining bank and retain the basis used.
15. Can collateral replace a missing operational credit?
Do not treat collateral as confirmed funding of the payment account; reconcile the actual account entries.
16. Why retain posting timestamps?
They help demonstrate the sequence of confirmation, vostro credit and beneficiary payment for operational and audit review.
Conclusion
Build a foreign-currency drawing calendar that separates draft totals, next-working-day messages, second-working-day nostro credit and confirmed vostro funding.