NEW DELHI: In a major boost to cross-border payments, India and Singapore on Tuesday linked their digital payment systems Unified Payments Interface (UPI) and PayNow. The linkage will allow individuals in India and Singapore to remit money to their bank accounts in real-time and at a competitive rate. The annual remittance flow between the two countries is around $1 billion a year.
The facility was launched, in the presence of Prime Minister Narendra Modi and Singapore’s Prime Minister Lee Hsien Loong, through token transactions by Reserve Bank of India Governor, Shaktikanta Das and Managing Director of Monetary Authority of Singapore, Ravi Menon using the UPI-PayNow linkage.
Currently, there is a daily transaction limit of ₹60,000 in a day (equivalent to around SGD 1,000 for undertaking cross-border remittance transactions through the UPI-PayNow interlinkage. At the time of making the transaction, the system shall dynamically calculate and display the amount in both the currencies for convenience of the user.
“The UPI-PayNow linkage will enable users of the two fast payment systems in either country to make convenient, safe, instant, and cost-effective cross-border funds transfers using their respective mobile apps. Funds held in bank accounts or e-wallets can be transferred to/from India using just the UPI-id, mobile number, or Virtual Payment Address,” said RBI in a statement.
Presently, only Person-to-Person (P2P) remittances for the purposes of ‘Maintenance of Relatives Abroad’ & ‘Gift’ are allowed, according to the RBI.
To begin with, State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate both inward and outward remittances while Axis Bank and DBS India will facilitate inward remittances. For Singapore users, the service will be made available through DBS-Singapore and Liquid Group (a non-bank financial institution). More number of banks will be included in the linkage over time.
The UPI-PayNow linkage is the product of extensive collaboration between Reserve Bank of India (RBI), Monetary Authority of Singapore (MAS), and Payment System Operators of both countries viz. NPCI International Payments Limited (NIPL) and Banking Computer Services Pte Ltd. (BCS), and participating banks and non-bank financial institution. This interlinkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore.