India Expanding X-Border Payment Connections With Neighbors

India’s central bank says the country is making mobile payment links with several countries.

Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar discussed those connections while speaking to reporters Wednesday (Nov. 20) at a conference in the Philippines.

“We have one arrangement with Sri Lanka. We are working out with other countries like [the United Arab Emirates] (UAE )and some neighboring countries as well,” said Sankar, whose comments were reported by Bloomberg News.

India also has “some arrangements” with its neighbors in Nepal and Bhutan, added Sankar.

The report notes that the RBI is working with other central banks in its region to create a cross-border platform for instant payments. India has also tested a central bank digital currency (CBDC), though Sankar said the central bank was in no hurry for a wider rollout.

That may happen once the RBI has “some visibility of what the outcome or impact will be,” but “we don’t keep a specific timeline for that,” Sankar added.

The RBI has also joined its counterparts from Malaysia, Singapore, Thailand and the Philippines in “Project Nexus” a Bank for International Settlements effort to connect the instant payment systems of several central banks.

The project is aimed at expanding the use base of India’s Unified Payments Interface (UPI), the largest instant payment system in the world.

Nexus is designed to standardize the way domestic instant payments systems connect with each other. Rather than creating custom connections for every new country to which it interacts, countries would just have to make one connection to Nexus, which would in turn let the payment system reach all other nations in the network.

“Even with just the first wave of connected countries, Nexus has the potential to connect a market of 1.7 billion people globally, allowing them to make instant payments to each other easily and cheaply,” Agustín Carstens, general manager of the BIS, said in a news release.

In related news, PYMNTS wrote last month about compliance in making cross-border payments, where businesses need to balance “local demands with global ambition.”

“One of the biggest challenges posed by on-soil requests is the sheer complexity of meeting multiple, and often conflicting, regulatory demands,” that report said. “A policy that aligns with one country’s rules might run afoul of another’s. Companies must navigate carefully to avoid fines, operational disruptions or loss of access to key markets.”