The review would seek to strengthen India’s cross-border payment landscape, foster innovation, competition, align India with global best practices and technology while accommodating national requirements.
India’s central bank is planning to review and simplify its cross-border payment framework to reduce regulatory, technological and operational friction for businesses and enhance efficiency.
It will examine allowing customers to seamlessly switch among payment service providers by implementing a payments switching service.
Introducing a single-window application process shall also be examined.
The central bank’s report ‘Payments Vision 2028: Preparing to Shape India’s Payment Frontier’ identified cross-border payments as a key strategic priority for the next phase of India’s digital payments growth.
“For promoting ease of doing business and convenience, the regulatory process for cross-border payment authorisation under the Payment and Settlement Systems Act (PSS), 2007 and Foreign Exchange Management Act (FEMA), 1999 shall be streamlined along with examining the case for recognising small payment system providers under a perpetual regulatory sandbox structure,” said the RBI report.
RBI will also examine providing flexibility to customers to seamlessly switch among payment service providers by implementing a payments switching service.
It will publish reports on cross-border payments to present a comprehensive analysis of cross-border payments in India covering key metrics like volumes, transaction costs, transparency, speed of transactions, performance of various channels and corridors.
These reports shall track global developments related to legal, regulatory, technological and process advancements in cross-border payments. Benchmarking India’s progress against global trends, these will also identify areas for improvement and evaluate the implications of international developments on the domestic payment system.
Given the potential to gain efficiencies in cross-border payments, introducing a single-window application process shall be examined to enhance the ease of doing business.
The central bank is increasingly looking at artificial intelligence and data analytics to improve risk monitoring, fraud detection and policymaking.
Fibre2Fashion News Desk (DS)
