India looked forward to showcasing its digital infrastructure prowess during its time as President of the Group of 20 (G20). Given the response among other nations to the home-grown real-time retail payment Unified Payments Interface (UPI), it seems to have been a success.
Several nations are interested in using UPI or building their own similar payment systems, and India would be willing to help them, Reserve Bank of India Deputy Governor T Rabi Sankar said on Thursday.
“There is some interest in taking India’s help. Several Commonwealth nations from the Caribbean and South Pacific, and some Latin American countries as well are interested in actually using UPI or similar technology. For them, it is a question of developing their systems and linking it with ours,” said Sankar, on the sidelines of the G20 meeting of finance ministers and central bank governors in Bengaluru.
Sankar said many of the larger countries like the United Arab Emirates, Indonesia, and others with evolved payment systems have also shown interest in linking their payment systems with UPI.
“If they want UPI, we would be happy to help them. If they have fast payments system, the linking becomes easier,” he said.
Earlier this week, UPI and its equivalent network in Singapore called PayNow were integrated to enable faster remittances between the two countries at a competitive rate.
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Sankar also added that access to UPI for non-resident Indians (NRIs) would be operationalised next week. Sankar said it would be available to NRIs with international phone numbers. The facility had been enabled a while ago but could not be implemented due to technical issues.
Speaking about India’s central bank digital currency (CBDC, also known as e-rupee), Sankar said the RBI was looking to expand the use cases for wholesale CBDC.
“We want to have as many use cases as possible. We will try account-based CBDC. We hope to launch it and are also looking at using a wholesale CBDC on the distributed ledger for other use cases,” said Sankar.
The pilot in the wholesale segment, known as digital rupee-wholesale, was launched on November 1, 2022, with the use case being limited to the settlement of secondary market transactions in government securities.
Sankar said that the use of CBDC was expected to make the interbank market more efficient. He said that settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.
The pilot in the retail segment, known as digital rupee-retail, was launched on December 1, 2022, within a closed user group comprising participating customers and merchants.
Sankar said that the RBI expected half a million users for retail CBDC in the next three months.