Reserve Bank of India (RBI) has joined Project Nexus

Context

  • The Reserve Bank of India (RBI) has joined Project Nexus, a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payments Systems (FPSs). India’s Unified Payments Interface (UPI) and FPSs of Malaysia, the Philippines, Singapore and Thailand will be interlinked through Nexus. 

What is Project Nexus?

  • Project Nexus is conceptualised by the Innovation Hub of the Bank for International Settlements (BIS).

    Project Nexus
    Pic Credit: Hindubusiness Line
  • It seeks to enhance cross-border payments by connecting multiple domestic instant payment systems (IPS) globally.
  • It is the first BIS Innovation Hub project in the payments area to move towards live implementation.
  • The Reserve Bank of India has been collaborating bilaterally with various countries to link India’s Fast Payments System (FPS) – UPI, with their respective FPSs for cross-border Person to Person (P2P) and Person to Merchant (P2M) payments.
  • While India and its partner countries can continue to benefit through such bilateral connectivity of FPS, a multilateral approach will provide further impetus to the RBI’s efforts in expanding the international reach of Indian payment systems.

What are the benefits of the platform?

  • Project Nexus is designed to standardise the way IPS connect to each other. Rather than a payment system operator building custom connections for every new country that it connects to, the operator can make one connection to the Nexus platform.
  • This single connection allows a fast payments system to reach all other countries on the network. Nexus could significantly accelerate the growth of instant cross-border payments.

Which countries have joined the platform?

  • Project Nexus aims to connect the FPSs of four Association of Southeast Asian Nations (ASEAN) — Malaysia, Philippines, Singapore, and Thailand; and India, who would be the founding members and first mover countries of this platform.
  • An agreement on this was signed by the BIS and the central banks of the founding countries i.e. Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Reserve Bank of India on June 30, 2024, in Basel, Switzerland.
  • Indonesia will also join the platform in future.

Source; IE

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