Bengaluru: After Singapore, the RBI is in talks with several countries, including Indonesia, UAE and Mauritius, for establishing a direct payment link of the Unified Payments Interface (UPI) with networks in these countries to enable quicker and cheaper fund transfers using mobile phones.
A senior RBI officer told reporters on the sidelines of the meeting of G20 finance ministers and central bank governors that some Latin American countries have also shown interest. The central bank is showcasing UPI and the Central Bank Digital Currency (CBDC), or the digital rupee, to delegates at the event and also allowing foreigners to use UPI.
The regulator and the government are keen to expand UPI payment links to aid fund transfers and do away with the high costs charged by banks and reduce the time taken. The move is seen to be especially beneficial for the Indian diaspora.
The RBI official said use of UPI for non-resident Indian will also be operationalised next month, which will allow the use of the tool through international phone numbers. Although the tool was enabled, it could not be implemented due to technical issues.
Asked about the central bank digital currency, RBI officials said they are trying to significantly ramp up the pilot to cover as many cases as possible in a closed user group. On the retail side, pilots are going on in several cities and the RBI is now looking to expand to more areas and include more banks.
“It was not intended to move banks and others away from existing Negotiated Dealing System Gilts order matching system that is there. We are now looking at using a wholesale CBDC on distributed ledger for other use cases, could be money market transactions,” an official said.