An expanded RTGS using major trade currencies would accelerate access to cheaper cross-border payments and remittances. The RBI has often spoken of the need for more cost-effective cross-border payment systems, with deputy governor T Rabi Sankar stating in September 2023 that the prevailing high costs for cross-border remittances were “simply unconscionable”.
“The feasibility of expanding RTGS to settle transactions in major trade currencies such as USD, EUR and GBP can be explored through bilateral or multilateral arrangements,” Das said at the RBI@90 conference in New Delhi. “India and a few other economies have already commenced efforts to expand linkage of cross-border fast payment systems both in the bilateral and multilateral modes,” he said.
The RTGS, which is used to transfer funds between banks on a real-time basis, is maintained by the RBI.
In July, the central bank unveiled the Project Nexus initiative to interlink the domestic instant payment systems of India with Malaysia, the Philippines, Singapore and Thailand.
Cross-border payment linkages under bilateral pacts have already been set up with Singapore, the UAE, Mauritius, Sri Lanka and Nepal.Highlighting the potential of central bank digital currencies (CBDCs) to enable efficient cross-border payments, Das said harmonisation of standards and interoperability would be required to facilitate this process.”A key challenge could be the fact that countries may prefer to design their own systems as per their domestic considerations. I feel we can overcome this challenge by developing a plug-and-play system that allows replicability of India’s experience while also maintaining the sovereignty of respective countries,” he said.