After setting real time payment linkage between the Unified Payments Interface (UPI) of India and PayNow of Singapore, India is looking to connect with more and more countries where either Indians are in large number or Indians are visiting in large numbers, RBI Deputy Governor T Rabi Shankar said here on Thursday. He also said that efforts are on to widen the use of CBDC (Central Bank Digital Currency)

“Such countries could be UAE, Mauritius and Indonesia beside others,” Rabi Shankar. Further, some Latin American countries have also shown interest. He also said that soon an NRI (Non-Resident Indian) will be able to use UPI in India. “Using UPI for NRI is being operationalised next month for international phone numbers. It was enabled long time ago but due to some technical issues, it couldn’t be implemented,” he said.

UPI is considered as faster and cheaper real-time money transfer alternative. It enables immediate money transfer through mobile device round the clock 24*7 and 365 days.

UPI for foreigners

On Tuesday, Reserve Bank of India announced a facility to enable all in-bound travellers visiting India to make local payments using UPI while they are in India. Facility for NRI will be similar to foreigners. According to RBI, to start with, it will be available to travelers from G20 countries at select international airports (Bengaluru, Mumbai and New Delhi).

Eligible travellers would be issued Prepaid Payment Instruments (PPI) wallets linked to UPI for making payments at merchant outlets. To begin with, ICICI Bank, IDFC First Bank and two non-bank PPI issuers — Pine Labs Private Limited and Transcorp International Limited — will issue UPI linked wallets. Travellers visiting India can now experience the convenience of UPI payments at over five crore merchant outlets across India, that accept QR code-based UPI payments.

On Wednesday, Managing Director of International Monetary Fund, Kristalina Georgieva lauded UPI as an excellent example of technology boosting financial inclusion. Last month alone, this layer of India’s digital public infrastructure processed over 8 billion transactions. And that system allows 400 million people in rural areas to participate with legacy ‘push-button’ cellphones

Central Bank Digital Currency (CBDC)

Meanwhile, Rabi Shankar said that effort is on to expand the use of CBDC (Wholesale or W). “We are now looking at using a wholesale CBDC on distributed ledger for other use cases, could be money market transactions. Work is going on. Whenever it is ready, we will start using,” he said

RBI initiated pilot project for CBDC(W) on November 1, while for CBDC (Retail or R) was launched on December 01. Under the pilot, use case is limited to the settlement of secondary market transactions in government securities. The pilot in retail segment, is being undertaken within a closed user group (CUG) comprising participating customers and merchants. Rabi Shankar said that RBI is looking for half a million CBDC (R) users within a quarter and more and banks coming to this network.

On Wednesday, Georgieva said that most IMF member countries are now actively evaluating CBDCs that could bring substantial benefits, such as more resilient payments in disaster-prone countries and greater financial inclusion. India has conducted an in-depth assessment of CBDCs, which could inform similar studies elsewhere, accelerating digital progress worldwide.