Source: This post is based on the article “Safe across borders”, published in The Hindu on 24th feb. 2023.
Syllabus Topic: GS Paper 3, Money and Banking.
News: Recently, India and Singapore enabled faster transfer of remittances between both countries by enabling integration of Unified Payments Interface(UPI) with Singapore’s PayNow.
The daily transaction limit is set at ₹60,000 or about SGD 1,000.
Significance of Cross-border integration of Payment Interfaces
- It is the beginning of real-time cross-border person-to-person money transfers.
- Singapore is home to a sizeable Indian diaspora as well as tens of thousands of migrant workers employed in Singapore.
- It enables individuals to quickly and safely remit money. It will save them the hassle of running to bank branch or a wire transfer facility’s outlet or costly hawala transactions.
- It will eliminate the use of external settlement currency like US Dollar.
- Singapore has already established payment settlement facility with Thailand in 2021. It is also the member of larger five-member initiative among the central banks of Southeast Asian economies, to connect their domestic digital payment systems. India could become a part of this initiative.
- Besides boost to regional trade and tourism, such a network would help India to further formalise the flow of inbound remittances.
