RBI Joins ‘Project Nexus’ for Instant Cross-Border Retail Payments
- July 2, 2024
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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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.