RBI Joins ‘Project Nexus’ for Instant Cross-Border Retail Payments

RBI Joins ‘Project Nexus’ for Instant Cross-Border Retail Payments

Sub: Economy

Sec: Monetary Policy

Overview:

The Reserve Bank of India (RBI) has joined “Project Nexus”, an international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payment Systems (FPSs).

About Project Nexus:

• Conceptualization: Developed by the Innovation Hub of the Bank for International Settlements (BIS).
• Objective: To connect the FPSs of four ASEAN countries (Malaysia, Philippines, Singapore, and Thailand) and India.
• Founding Members:
  • Bank Negara Malaysia (BNM)
  • Bank of Thailand (BOT)
  • Bangko Sentral ng Pilipinas (BSP)
  • Monetary Authority of Singapore (MAS)
  • Reserve Bank of India (RBI)
• Special Observer: Indonesia, involved from the early stages.

Significance:

• Launch Timeline: The platform is expected to go live by 2026.
• Efficiency: Aims to make retail cross-border payments efficient, faster, and more cost-effective.

RBI’s Participation:

• Collaboration: RBI has been working bilaterally with various countries to link India’s FPS – the Unified Payments Interface (UPI), with their respective FPSs for cross-border person-to-person (P2P) and person-to-merchant (P2M) payments.
• Multilateral Approach: Joining Project Nexus will enhance India’s efforts in expanding the international reach of Indian payment systems beyond bilateral connections.

Impact:

• Enhanced Efficiency: Once operational, Nexus will significantly streamline cross-border retail payments, benefiting consumers and businesses alike.
• Broader Reach: The platform’s scalability allows for the potential inclusion of more countries in the future, broadening the network and impact of efficient cross-border payments.