Gunveer Singh, chief general manager of the Reserve Bank of India’s (RBI) department of payment and settlement systems, said that India is looking forward to more meaningful cooperation with the UAE in the field of digital payments.
Singh said that cooperation with the UAE in digital payments is important for India given the two countries’ geographical proximity and the large Indian community in the UAE. He added that the two countries have already taken some steps to cooperate in this area, including signing two MoUs to strengthen use of national currencies for bilateral trade and link payment and financial messaging systems in July 2023. Singh said that he is confident that the two countries can work together to further develop digital payments and make them more efficient and convenient for everyone.
In July, the President, His Highness Sheikh Mohamed bin Zayed Al Nahyan, and Narendra Modi, Prime Minister of India, witnessed the exchange of two Memoranda of Understanding (MoUs) between the Central Bank of the UAE (CBUAE) and the RBI, aimed to support the rapid growth of trade relations between the two countries.
The first MoU defines a framework comprising various elements and measures to facilitate the settlement of trade transactions in the two national currencies (the UAE dirham and the Indian rupee) per the agreements set between importers and exporters. It also outlines the types of eligible transactions, allows opening and use of correspondent accounts for the benefit of financial institutions in both countries, promotes direct exchange rates between the two national currencies, and provides options for liquidity management in accordance with the laws and regulations of the two countries.
The second MoU aims to enable participants to benefit from the services of IPPs and local payment card schemes in the UAE and India. This will be achieved through the CBUAE Classification: Public direct integration of these systems, ensuring compliance with regulatory requirements in both countries.
Furthermore, the agreement explores the possibility of leveraging both parties’ expertise in developing financial messaging systems and exploring potential linkages between similar systems in both countries.
Singh added that India’s robust unified payments interface (UPI) achieved an impressive milestone by surpassing 10 billion transactions within a month. In August, the total number of UPI transactions reached an unprecedented 10.58 billion.