On October 31, 2023, the Reserve Bank of India (RBI) issued a master circular on the import of goods and services titled <a href="https://m.rbi.org.in//Scripts/NotificationUser.aspx?Id=12561&amp;Mode=0">Regulation of Payment Aggregator – Cross Border</a>.&nbsp;&nbsp;

According to the circular, the RBI will regulate all Indian entities facilitating online cross-border payments for the import and export of permissible goods and services. Moreover, these entities will be collectively termed Payment Aggregators Cross Border (PA-CB).

The circular comprises guidelines to streamline the existing cross-border payment framework in India. Previously, cross-border transactions were carried out through Online Payment Gateway Service Providers (<a href="https://www.skydo.com/blog/online-payment-gateway-service-provider-opgsp?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">OPGSPs</a>) as per a circular issued by RBI in 2015.

OPGSPs operate by partnering with an Authorised Dealer (Category I) Bank (AD Bank) and notifying the RBI. According to RBI guidelines, no formal license is needed to function as an OPGSP.

Hence, RBI has issued a circular to establish a concise and clear framework for cross-border payments. RBI will now oversee all cross-border payments in India related to the import and export of goods. The circular applies to PA-CB, PAs, authorised banks and OPGSPs.&nbsp;The PA-CB circular also denotes that there can’t be any new OPGSP.

This blog discusses the key provisions related to the latest RBI circular on the import of goods and services, RBI guidelines for payment gateway, and OPGSP guidelines.

Master Circular on Import of Goods and Services: RBI Bank Guidelines

The following are the key guidelines mentioned in the circular.

The following entities need to adhere to RBI guidelines/instructions provided in the circular.

Here are the key developments included in the new PACB circular.

Categories of Authorisation as per PA-CB Activity&nbsp;

Based on the cross-border payment activity undertaken by the PA-CBs, they can seek authorisation for one of the following three categories.

PA-CB, facilitating cross-border payments for Indian exporters, has to open an Export Collection Account (ECA) with an AD bank.&nbsp;

ECAs can be opened in either Indian currency or foreign currency. In the case of the latter, various ECAs have to be opened for different currencies.

The PA-CBs will credit all export proceeds in the respective ECAs. Additionally, export PA-CBs need to follow the below guidelines:

Similar to export PA-CBs, import PA-CBs have to open an Import Collection Account (ICA) with an AD bank.&nbsp;

They will collect the payment from importers in an escrow account managed by the payment aggregator. It will then be transferred to ICA and will eventually be transferred to the bank account of the foreign merchants.

These entities are allowed to directly onboard foreign merchants, e-commerce marketplaces, or other overseas entities that offer payment aggregation services.&nbsp;

Here are the guidelines Import PA-CBs need to follow.

Those PA-CB who engage in both import and export activities have to comply with the requirements for both Import PA-CB and Export PA-CB.

They also need to ensure that the maximum value per unit of exported or imported goods or services should be ₹25,00,000.

Non-banks who want to provide PA-CB services will have to seek authorisation from RBI. However, before seeking RBI authorisation, it is necessary to register with the Financial Intelligence Unit-India (FIU-IND).&nbsp;

However, RBI has issued the following net-worth criteria for non-banks providing PA-CB services.

The accounts of existing non-bank PA-CB who are unable to meet the net worth requirement will be closed by banks by 31 July 2024.

Snapshot Comparison Between OPGSP Circular (2015) and PA-CB Circular (2023)&nbsp;

Here are the key differences between the OPGSP Circular (2015) and the PA-CB Circular (2023)

Here is the process of seeking approval from RBI for existing or new PA-CBs.

Step 1: Draft the application through Form A, which includes the following parts.

Step 3: The RBI will process the application.

(RBI may raise queries related to various aspects such as shareholding, product processes, etc.)&nbsp;

Step 4: In principle approval from RBI.

Step 5: Filing of system Audit Report

(RBI may raise queries related to SAR audit observations)&nbsp;

Step 6: Final authorisation(state additional conditions that must be complied with)&nbsp;

The evolving cross-border payments environment and the emergence of several OPGSPs and other fintech entities encouraged RBI to issue the circular. Its main purpose is to ensure seamless and more transparent cross-border payment transactions.

Even though regulatory authorities are constantly working on making cross-border payment transactions seamless, transparent, secure, and quicker, businesses often face difficulties in receiving timely payments.&nbsp;

Skydo aims to simplify the cross-border payment landscape for businesses by automating various tasks and helping businesses open foreign bank accounts. <a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Join Skydo today</a> to streamline your invoicing and financial management activities!

Q1. RBI’s master circular on the import of goods and services and cross-border payments applies to which entities?

Ans. AD banks, PAs, and PA-CBs involved in the online processing/settlement of cross-border payment transactions related to the import and export of goods and services have to comply with the guidelines mentioned in the circular.

Q2. What are various compliances according to RBI payment aggregator guidelines for cross-border payments?

Ans. All PA-CBs have to follow the guidelines provided in the circular dated October 31, 2023. Additionally, they also have to follow the various guidelines for payment aggregators mentioned under a circular issued by RBI on March 17, 2020.&nbsp;The circular includes guidelines related to customer grievance redressal and compliance with Baseline Technology Guidelines to ensure fraud prevention and risk management.

Q3. How can PA-CB seek authorisation for facilitating cross-border payment transactions?

Ans. AD banks do not need to seek authorisation to facilitate cross-border payment transactions. However, a non-bank PA-CB can seek authorisation from RBI by sending the application to the Department of Payment and Settlement Systems (DPSS), RBI, Central Office (CO), by April 30, 2024. PA-CB entities must fulfil the minimum net worth criteria before applying to RBI.

 Know more about RBI's circular that mandates payment aggregators to seek authorization for facilitating cross-border transactions by April 30, 2024.

BI’s PACB Circular: Key OPGSP Updates of 2024 to Note 

RBI’s PACB Circular: OPGSP Update 2024 th

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‘Good Things Take Time,’ and for hypothetical situations, this may give you hope and keep you going. But what about real-life situations? Is it good that you stand at the corner of the shop waiting for your online payment to succeed? Do you always have time to stand and look at the ‘Processing’ box, taking minutes while you think about the limited cash you have with you?

Now, imagine the same when you execute foreign currency transactions with the receiver in a foreign country, expecting you to pay immediately. A slow transaction processing speed can present you or your business in an unprofessional light and result in losing suppliers or vendors.

Almost every bank in India has different processing speeds for international transactions. The following factors explain the reasons behind fluctuating transaction speeds.

Every bank in India processes foreign currencies at different speeds as they rely on complex systems and operations to manage transactions, customer interactions, and regulatory compliance. Some key factors that can impact the processing speed of banks include the following.

The technology infrastructure of a bank, including its hardware, software, and network capabilities, plays a critical role in processing speed. Modern, well-maintained systems are more likely to handle transactions quickly and efficiently.

Correspondent banks have extensive networks and relationships with other banks worldwide. They can route payments through the most efficient and cost-effective channels, reducing delays and transaction costs. However, with such extensive interconnected transactional systems, it is a hassle for a bank to execute transactions quickly.&nbsp;

While this network is designed to optimise the routing of international payments, it can also introduce some complexity. Each bank involved in the transaction needs to verify and process the payment. The more intermediaries involved, the more potential points of friction or delay in the process.

For example, an Indian business seeks to make an international payment of USD 10,000 to a U.S. supplier. To do this, the Indian business bank (Bank A) must use the services of correspondent banks in the U.S. due to its lack of a direct presence there. The payment travels through three banks: Bank A, Correspondent Bank X, and Correspondent Bank Y. Each bank conducts checks and verifications, potentially leading to delays and increased costs.&nbsp;

Additionally, international transactions can span different time zones and require communication between banks in various regions worldwide. This can lead to time lags as banks coordinate and confirm the transfer of funds. Delays may occur due to differences in working hours, holidays, or operational procedures across different countries.

The better the link between the two banks, the faster the processing time.&nbsp;

Since <a href="https://www.skydo.com/blog/the-complete-guide-to-capital-and-current-account-transactions">foreign currency transactions fall under FEMA</a>, correspondent banks must assist respondent banks in navigating the complex regulatory landscape of cross-border transactions. If the correspondent bank is well-versed in international banking regulations and compliance requirements, the processing time often takes less time.&nbsp;

Geographic reach significantly impacts the speed of foreign currency processing in international banking. Variations in time zones, specific payment timings, and using batch processing introduce delays. Banks operate within their local time zones, which can lead to misaligned working hours.&nbsp;

Batch payments, weekends, and holidays can further affect processing times. Banks with a global presence have an advantage, but real-time or emergency payments may come at a higher cost.

Notably, a specific category of banks can process these payments, known as AD-1 banks.

What are AD-1 Banks and Why do AD-1 Banks Process Foreign Currency Faster than Others?

Banks are categorised into AD-1 (Authorised Dealer Category 1) and AD-2 by the Reserve Bank of India (RBI). AD-1 banks are a significant presence in the international financial market and are authorised by the RBI to deal in foreign exchange transactions. These banks have a more extensive network of correspondent banks and are better equipped to facilitate foreign currency transactions more efficiently.&nbsp;

AD-1 banks provide a NOSTRO account service denominated in various foreign currencies. These accounts are held with correspondent banks or financial institutions in the respective foreign countries where the currencies are used. Therefore, for your business, you must choose an AD-1 category bank that provides a NOSTRO account service.

A NOSTRO account refers to an account held by a bank in a foreign country, denominated in the currency of that particular country. The term "NOSTRO" is derived from the Latin word for "ours," emphasising that a foreign bank owns the account.&nbsp;

These accounts facilitate international trade and transactions by enabling banks to hold funds in various currencies, simplifying cross-border payments and settlements. NOSTRO accounts help manage foreign exchange and reduce the need for correspondent banking arrangements, fostering efficient global financial operations for institutions engaged in international trade and finance.

NOSTRO accounts hold foreign currency at another bank in the respective country.&nbsp;

Here's a NOSTRO Account example to help illustrate how it works.

Let's consider US Company (A) and Indian Team (B).

This way, NOSTRO accounts enable banks to facilitate cross-border transactions by maintaining balances in various currencies in foreign banks. These accounts act as liquidity buffers, ensuring the bank has sufficient funds in foreign currencies to process international payments and settle obligations.Most NOSTRO accounts are integrated with the <a href="https://www.skydo.com/blog/why-was-a-certain-amount-deducted-from-my-swift-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">SWIFT (Society for Worldwide Interbank Financial Telecommunication)</a> messaging system. It sends payment instructions through SWIFT messages to its correspondent bank, which holds the NOSTRO account in the beneficiary's currency.&nbsp;

The correspondent bank can then execute the payment using the funds in the NOSTRO account. This process enables real-time or near-real-time settlement of cross-border transactions. NOSTRO accounts are also called VOSTRO accounts from the point of view of the foreign bank (Bank B).&nbsp;

What is a VOSTRO Account? &amp; VOSTRO Account Example

A Vostro account is a financial arrangement where a domestic bank holds a bank account on behalf of a foreign bank or financial institution, denominated in the local currency of that country. Functioning as a form of correspondent banking, Vostro accounts facilitate foreign banks in executing transactions and delivering services in markets where they lack a direct presence.&nbsp;

Bank of America, based in the USA, aims to conduct business in India. To achieve this, they need to maintain an account with an Indian bank. Bank of America collaborates with ICICI Bank in India and opens an account with Indian Rupees (INR) as the currency. This account is called a VOSTRO account, and ICICI Bank is the domestic bank that holds it on behalf of Bank of America.

In this case, ICICI Bank provides various services to Bank of America, such as processing transactions, providing credit facilities, and managing the account. As a foreign bank, Bank of America can conduct business in India without having a physical presence there because of the VOSTRO account held by ICICI Bank.

NOSTRO accounts also play a pivotal role in the <a href="https://www.skydo.com/blog/get-the-most-out-of-your-forex-savings-with-skydo?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">currency exchange</a> process or currency conversion. If a bank needs to convert one currency into another to complete a cross-border payment, it can do so through its NOSTRO accounts.&nbsp;

For example, if Bank A in India wants to send Euros to a beneficiary in Europe, it can request the bank to use its NOSTRO account with a European bank to convert INR into euros for making the payment.&nbsp;

Nostro account charges for international transactions typically vary between <a href="https://navi.com/blog/nostro-account/">$15 and $30</a> per transaction. When individuals send money abroad, their banks facilitate the transaction through NOSTRO accounts, incurring these fees. These charges contribute to the cost of conducting cross-border financial activities, reflecting the complexity of international transactions.

Difference Between NOSTRO and VOSTRO Accounts?

Here is a table describing the difference in NOSTRO vs VOSTRO accounts in detail.

Redirecting to Another Bank - Optimising Processing Speed

Banks strive to create effective and speedy foreign currency processing as it contributes to more customers who execute cross-border transactions. However, there may be some technical, regulatory, or geographical restrictions for the bank to have a slow foreign currency processing time. In such cases, banks redirect the transactions to other banks to optimise the processing speed, called transaction redirection.&nbsp;

The primary objective is to achieve faster, more cost-effective, and more reliable settlement while leveraging the capabilities and networks of other banks or intermediaries. Transaction redirection works on correspondent relationships principle with other global banks and financial institutions.Transaction redirection often involves utilising NOSTRO accounts to optimise the processing of cross-border transactions.&nbsp;

For example, let’s say you request Bank A in your country to make a certain payment to a foreign beneficiary. To fulfil the payment request, Bank A can redirect the payment transaction to the correspondent bank's NOSTRO account and instruct the bank to debit the NOSTRO account with the funds and credit them into the recipient’s account.&nbsp;

Transaction redirection streamlines foreign currency payments by leveraging the correspondent bank’s technical infrastructure and NOSTRO accounts to ensure quick payment processing. Transaction redirection can help mitigate risks associated with currency fluctuations, settlement failures, and regulatory compliance.However, some correspondent banks may charge fees for processing transactions through their NOSTRO accounts, which can negate potential cost savings. Furthermore, relying on correspondent banks for transaction redirection introduces counterparty risk. If the correspondent bank encounters financial difficulties or becomes insolvent, it can disrupt transaction processing and potentially lead to losses.

Future Trends in Foreign Currency Processing

Global economies are witnessing a shift to digital technologies, revolutionising how individuals or companies do business. A significant contributor to the success of global businesses is the foreign currency processing time, which makes or breaks the cross-border transactional system.&nbsp;

The ongoing efforts to improve international remittance transfers have also garnered the <a href="https://www.bis.org/fsi/publ/insights43.pdf">attention of leaders</a> from major economies, international financial institutions (IFIs), and standard-setting bodies (SSBs).&nbsp;

Their primary goal is to simplify and reduce the costs of <a href="https://www.skydo.com/blog/4-reasons-you-need-fira-for-your-export-remittances?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">sending remittances</a>, a crucial issue in the global development agenda. This commitment to reform began in the early 2000s, with the G8 and G20 groups taking significant steps and committing to cut costs.&nbsp;

Even the United Nations (UN) included reducing remittance expenses as a target within the Sustainable Development Goals (SDGs).

Recent developments, such as <a href="https://www.imf.org/en/Blogs/Articles/2020/10/19/blog-a-leap-forward-on-cross-border-payments">the G20 Roadmap</a> in collaboration with IFIs, SSBs, and central banks, are aimed at lowering the expenses of cross-border payments, including remittances and enhancing the transparency, accessibility, and transaction speed of these international financial transactions.&nbsp;

Alongside these reforms, the <a href="https://www.bis.org/fsi/publ/insights43.pdf">Financial Action Task Force (FATF)</a> is conducting a review to identify areas where differing anti-money laundering and counter-terrorism financing regulations or their implementation might hinder the efficiency of cross-border payments, especially in the remittance market.

Here are some key future trends likely to expedite foreign currency processing further.

1. Blockchain and distributed ledger technology

Blockchain and DLT offer a secure and transparent ledger to record and verify foreign currency transactions. <a href="https://www.skydo.com/blog/future-of-cross-border-payments-2030-and-beyond?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Leveraging blockchain and DLT</a> can significantly lower the foreign currency processing time and cost by providing real-time settlement and removing the need for intermediaries.

Digital cross-country payments are increasing in volume with each passing day, and most countries are upgrading their payment systems. The upgrade focuses on integrating advanced technologies such as APIs (Application Programming Interface) and payment systems such as RTGS (Real-Time Gross Settlement) to enhance the speed and efficiency of foreign currency processing.&nbsp;

Most countries, including India, are looking to update and amend the rules of foreign currency transactions. For example, the Ministry of Finance recently amended FEMA to bring International Credit Card payments by resident Indians outside India within the LRS limit of USD 2.5 lakhs. Such enhanced regulatory frameworks promote innovation in the cross-border financial sector and enhance transaction tracking, transparency, and speed.

The introduction of NOSTRO accounts by AD-1 category banks has proven to be a game-changer in facilitating the seamless execution of cross-border payments. These accounts act as liquidity buffers, ensuring banks have sufficient foreign currency to process international transactions efficiently. NOSTRO accounts, often integrated with the SWIFT messaging system, enable real-time or near-real-time settlement of these transactions.

Looking ahead, the landscape of foreign currency processing is poised for further transformation. Emerging technologies like blockchain and distributed ledger technology promise heightened security and transparency, while real-time data and payment systems are set to revolutionise the speed and efficiency of cross-border transactions. Enhanced regulatory frameworks, aimed at promoting innovation and transparency, are also on the horizon.

As global economies continue to evolve and digital technologies reshape the business landscape, the future of foreign currency processing holds the promise of faster, more cost-effective, and more <a href="https://www.skydo.com/blog/real-time-tracking-of-international-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">transparent cross-border transactions</a>. These developments are not only reshaping the way we conduct international business but also have far-reaching implications for the stability of the global financial system and the growth of economies worldwide.&nbsp;

Ans: A NOSTRO account in banking is a foreign currency account held by a domestic bank in another financial institution, typically in the country's currency where the foreign bank is located.

Ans: A NOSTRO account is required to facilitate international transactions, allowing banks to hold foreign currency for smoother cross-border payments and settlements.

Q3. What is NOSTRO, VOSTRO, and LORO account?

Ans: NOSTRO, VOSTRO, and LORO accounts refer to accounts held by one bank in another. NOSTRO is the foreign account held by a domestic bank, VOSTRO is the local account held by a foreign bank, and LORO is an account held by an intermediary bank on behalf of others.

Q4. How to perform NOSTRO reconciliation?

Ans: NOSTRO reconciliation involves comparing and matching a bank's NOSTRO account records with its corresponding banks to ensure accurate and error-free transactions.

Q5. What is the difference between NOSTRO and VOSTRO accounts?

Ans: The main difference between NOSTRO and VOSTRO accounts lies in perspective: NOSTRO is the foreign account from the home bank's viewpoint, while VOSTRO is the local account from the foreign bank's viewpoint.

Ans: To open a NOSTRO account, a bank typically establishes relationships with correspondent banks abroad, following due diligence and compliance with regulatory requirements.

Q7. Which bank is best for international transactions?

Ans: The best bank for international transactions depends on fees, exchange rates, and network coverage; popular choices include HSBC, Citibank, and JPMorgan.

Q8. How do I transfer money to my NOSTRO account?

Ans: A NOSTRO account is a bank service and not an account that an individual owns. If you want to transfer a certain amount in foreign currency, your bank will do the needful through their NOSTRO account, ensuring that funds are available in foreign currency.

Q9. What is the purpose of a NOSTRO account?

Ans: The purpose of a NOSTRO account is to facilitate international trade and transactions by holding foreign currency and streamlining cross-border payments and settlements.

Q10. In which currency is the NOSTRO account available?

Ans: NOSTRO accounts are available in various foreign currencies, depending on the needs and preferences of the bank, such as USD, EUR, GBP, etc.

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The pandemic has mostly been stamped out, and corporations <a href="https://www.businessinsider.in/tech/news/tech-ceos-threaten-to-end-remote-work-infuriating-workers-hit-by-mass-layoffs-and-dwindling-perks/articleshow/100012875.cms">have moved to end remote working</a>.

Initially championed as a game-changing "new normal" that revealed a business’ resilience, everyone from <a href="https://nypost.com/2023/05/16/elon-musk-slams-remote-work-as-bulls-t-and-morally-wrong/">Elon Musk</a> to OpenAI’s CEO <a href="https://www.businesstoday.in/technology/news/story/chatgpt-maker-sam-altman-says-era-of-remote-work-is-over-380090-2023-05-04">Sam Altman</a> bashed remote work recently.&nbsp;

The reality of remote working is multifaceted. On one hand, it reduces costs and time spent in office spaces, commuting, and relocation, improving work-life balance (even <a href="https://futureforum.com/research/">twice as much as in-office employees</a>).&nbsp;

On the other hand, it reduces in-the-moment creativity that physical workplaces facilitate. Moreover, people believe that an in-person team fosters better company culture–an indefinable quality <a href="https://www.lexingtonlaw.com/blog/news/employee-happiness.html">over 60% of U.S. employees</a> rated as more vital than their pay.&nbsp;

While everyone has their perception and arguments about remote work, here’s a compiled list of 7 remote working myths and realities to help you make a more informed choice on whether it is right for your company.&nbsp;

Myth #1: Remote employees are less productive than office-based employees

Reality: Remote workers often show to be equally or more productive

Contrary to common belief, remote work has proven to boost productivity significantly. Many studies reveal that remote workers reported <a href="https://www.researchgate.net/publication/256051553_Does_Working_from_Home_Work_Evidence_from_a_Chinese_Experiment">13% higher productivity than office workers</a>.

While this might sound like one of many remote working myths, it's the truth. With <a href="https://www.skydo.com/blog/effective-time-management-techniques-for-business-owners?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">no time wasted</a> on commutes and the freedom to personalise their workspaces and working styles, remote employees can focus better on their tasks–especially in creative professions. Additionally, since people can choose their ideal working hours, they can tap into their peak productivity times, leading to faster project completions and overall efficiency.&nbsp;

To dive deeper into effective remote working practices and enhance your work-from-home experience, check out these <a href="https://www.toptal.com/designers/design-leads/how-to-work-remotely">proven techniques for successful remote work</a>.&nbsp;

Consider <a href="https://edition.cnn.com/2022/01/27/success/full-time-remote-decision-pandemic/index.html">Drift</a>, a sales and marketing software company that shifted to remote work during the pandemic. Initially sceptical, they soon witnessed a remarkable uptick in their <a href="https://www.skydo.com/blog/top-14-productivity-tools-for-freelancers-to-optimise-workflow?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">team's productivity</a>. Employees could work when they felt most inspired, resulting in creative campaigns delivered ahead of schedule.

Myth #2: Remote environment is challenging to train new employees

Reality: Improving team spirit can be difficult when you cannot meet with your team in person

Remote onboarding is a unique challenge, but it can be as effective as in-person training with the right approach.&nbsp;

Myth #3: Remote working is a way to get low-cost employees

Reality: Remote working is never for finding a low-cost substitute

Remote work is about tapping into a global talent pool and finding the best fit for your company, regardless of geographical boundaries. You might discover your next web developer in Singapore, or a brilliant graphic designer could be waiting to join your team from Brazil.

By embracing remote work, companies can access specialised skills that might be scarce in their local area. It's not about cutting costs but <a href="https://www.skydo.com/blog/leveraging-indian-remote-workers-to-expand-your-business-globally?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">investing in top-tier talent</a> that can drive innovation and propel the business forward.

Additionally, remote work allows employees to work in an environment that suits them best, fostering higher job satisfaction and overall well-being.&nbsp;

Myth #4: Remote employees lack team collaboration and teamwork

Reality: Remote workers can foster team collaboration through routines and technology

While face-to-face interactions have merits, remote teams have found innovative ways to collaborate effectively.&nbsp;

For instance, remote teams might implement a routine of virtual team-building through daily stand-up meetings, where team members share updates and discuss challenges. This practice ensures everyone is on the same page and helps identify potential roadblocks early on.

Remote teams leverage tools like <a href="https://slack.com/intl/en-in">Slack</a>, <a href="https://www.microsoft.com/en-in/microsoft-teams/log-in">Microsoft Teams</a>, and <a href="https://zoom.us/">Zoom</a> to facilitate real-time communication and team collaboration. These platforms enable instant messaging, video conferencing, and screen sharing, empowering team members to work together as if they were in the same office.

Additionally, virtual team-building activities are gaining popularity. Through online games like a virtual escape room challenge or a collaborative online puzzle, remote employees bond and build camaraderie.&nbsp;&nbsp;

Project management platforms like <a href="https://basecamp.com/">Basecamp</a>, <a href="https://trello.com/">Trello</a> or <a href="https://asana.com/">Asana</a> further enhance remote team collaboration. These tools enable seamless task allocation, progress tracking, and easy file sharing, ensuring everyone stays organised and informed.

Myth #5: Employees Usually Burnout When Working Remotely

Reality: Yes, remote work can lead to burnout.

Remote work companies' employees have a greater risk of burnout than in-person teams because it's more challenging to detect.&nbsp;

When you work from home, there are often blurred or no boundaries between your working hours and personal time, especially without a dedicated working space.&nbsp;

Remote workers might find it challenging to switch off from work mentally without the clear distinction of physically leaving the office. Emails and notifications from work can creep into their time, leading to prolonged working hours and an inability to disconnect.

Additionally, remote workers may feel the constant pressure to be available and responsive, fearing their superiors will question their commitment if they set clear boundaries. This "always-on" mentality can lead to chronic stress and exhaustion, precursors to burnout.

In a traditional office setting, supervisors and colleagues can easily notice signs of burnout, such as physical fatigue or emotional exhaustion. However, when employees work remotely, these signals may stay unnoticed, making it challenging for employers to intervene and provide support.

Myth #6: Remote workers lack discipline and are inefficient

Reality: Remote workers can establish efficiency and effective routines

The efficiency of remote work hinges on various critical factors contributing to a productive and cohesive remote work environment.

Myth #7: Remote work is only for junior roles or individual contributors

Reality: Remote work is best suited for roles where dependencies are minimal

Remote work is perfect for various roles, not just junior ones. Any job that relies less on physical presence and more on individual effort can thrive in a remote setup.

Consider a software development team. Programmers can collaborate effectively using virtual tools, writing code, and conducting code reviews from different locations.&nbsp;

The result? High-quality software delivered seamlessly, all while working remotely.

With virtual team building and resource access, writers and designers can work efficiently without being tied to a specific office space.

Data analysts are no exception. They can crunch numbers, analyse data, and create reports without being physically present in the office.&nbsp;

Remote work can be a rollercoaster ride, offering both challenges and rewards. On the positive side, remote work grants employees flexibility, virtual team-building and better work-life balance. Commutes vanish, and personalised workspaces enhance focus.&nbsp;

However, blurred boundaries between work and personal life can lead to burnout. Communication might suffer, impacting team cohesion. Some roles demand in-person collaboration that remote work can only partially replace.

Bill Gates, in a podcast, shed light on this topic, “In the pre-pandemic business world, people worried that a virtual meeting would offend a client. But, in a post-pandemic world, people will have second thoughts about the necessity of physical meetings.”

Companies can allow employees to work remotely for certain days of the week while coming into the office on other days. This way, employees can enjoy the flexibility and work-life balance of remote work while also benefiting from face-to-face interactions and team bonding in the office.

Additionally, leveraging technology and virtual team-building activities can help bridge the gap between remote and in-office employees, fostering camaraderie and teamwork.

Ans: Remote work refers to the practice of performing one's job duties from a location outside of the traditional office environment, often using technology to stay connected.

Q2. How has the widespread shift to remote work caused businesses to reconsider their way of working?

Ans: The widespread shift to remote work has prompted businesses to reassess traditional work models, embracing flexibility and digital tools to adapt to changing work dynamics and employee needs.

Ans: Hybrid remote work combines both in-office and remote work, allowing employees to split their time between working at a physical office and from a remote location.

Ans: To work effectively with remote teams, communication is key. Use collaboration tools, establish clear expectations and maintain regular check-ins to foster a sense of connection and productivity.

Ans: Remote hybrid work is a flexible work model that combines remote work and in-office work, allowing employees to choose where they work based on their preferences and job requirements.

Q6. What is the difference between remote and work from home?

Ans: Remote work broadly encompasses any work done outside the traditional office, while work from home specifically refers to working from one's residence.

Q7. How does remote work affect productivity?

Ans: Remote work can impact productivity positively by providing flexibility and reducing commuting time, but challenges like isolation and potential distractions may need to be addressed to maintain optimal productivity levels.

7 Remote Work Myths and Facts: Is it Right for Your Business? Th

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You've just bagged a project with an international client, and now it’s time to get hustling. However, you need to raise an export invoice for 50% of the advance amount. How should you present your charges? Should you opt for the comfort of your native Indian Rupee (INR) or invoice in foreign currency?

The quick answer to this is you should invoice in the currency of your client - say if your client is based in the US, you should invoice in USD, however there are other considerations which can significantly affect costs, fees, tax compliance, and financial management.&nbsp;

Let’s delve into the complexities of international transactions and explore factors to consider when deciding whether to invoice in Indian Rupees (INR) or a foreign currency. Additionally, we will shed light on the relevance of SWIFT, LUT, FIRA, and FIRC in navigating the payment process for international transactions.

Before deciding on the invoicing currency, you must consider the costs and fees associated with international transactions.&nbsp;

As the volume increases, your business may benefit from <a href="https://www.investopedia.com/terms/e/economiesofscale.asp">economies of scale</a>, enabling you to negotiate better rates with service providers and suppliers. Higher transaction volumes can also justify investments in streamlined processes and technologies that enhance efficiency and reduce costs.

If you are servicing clients from the US or UK, it is more straightforward and convenient to bill in that currency as it provides better financial stability and credibility. However, you can bill in your local currency if it is stable.&nbsp;

International payments generally include intermediary bank fees, transaction fees, conversion fees, and other administrative charges levied by financial institutions or payment service providers for additional transactions or payment-related services&nbsp;

Let's say you are a tech export business based in India sending an invoice to clients in the United States. Suppose your invoice is in USD, and your bank charges high fees for currency conversion. In that case, it may be more cost-effective to invoice in INR with an export payments partner like Skydo to minimise transaction costs and ensure that you receive the maximum possible amount. Skydo charges a flat fee for each transaction.

4. Tax Implications of Charging in Different Currencies

Sending an invoice in INR may subject the trade to Goods and Services Tax (GST) based on the nature of the transaction and relevant thresholds. As an IT services exporter, accepting foreign payments in INR will be subject to 18% GST. Therefore, you will need to add that tax amount to your invoice.

Conversely, invoicing in a foreign currency might have different tax implications, such as potential exemptions or other GST treatment. For example, if you accept the payment in USD, you must submit a Letter of Undertaking (LUT) (explained further in the article) per government regulations. Read more about the taxation rules and regulations concerning foreign transactions <a href="https://www.skydo.com/blog/understanding-gstin-requirements-for-export-businesses-in-india">here</a>.&nbsp;

International transactions expose businesses to currency exchange rate fluctuations, which can impact the value of transactions and profitability. Swings in exchange rates can result in potential gains or losses, affecting the overall cost of the transaction and financial performance.

6. Competitive Positioning in Foreign Market