India ties up with Singapore for its first real-time overseas payments link (updated)

Indian Overseas Bank

21/02/2023 08:49

(Recasts with India's link milestone; adds background on
Singapore's cross-border payments links and India remittances
data)
    By Siddhi Nayak and Xinghui Kok
       MUMBAI, Feb 21 (Reuters) - India and Singapore launched
on Tuesday a real-time link to facilitate easier cross-border
money transfers between the two countries, the first such for
the South Asian nation that is the world's biggest recipient of
remittances.
    Transfers of funds between the two countries will now be
possible using just mobile phones due to the tie-up between
India's Unified Payments Interface (UPI) and Singapore's PayNow
facility. 
    Such arrangements, which are a growing trend in Asia,
typically lower the costs of payments. Singapore has already
established a cross-border payments link with Thailand and is
working on one with Malaysia, according to the website of the
city-state's central bank. 
    "This will enable people from both the countries to
immediately and at low-cost transfer funds (by) just using their
mobile phones," Indian Prime Minister Narendra Modi said at a
virtual event for the launch of the service. The linkage will
help migrant workers, professionals, students and their
families, said Modi.
    UPI is an instant real-time payments system, allowing users
to transfer money across multiple banks without disclosing bank
account details. Similarly, PayNow is a service offered by
participating banks that allows sending and receiving Singapore
dollar funds from one bank to another using a mobile number.
    Singapore's Prime Minister Lee Hsien Loong told the launch
event cross-border retail payments and remittances between the
two countries currently amount to over $1 billion annually.
    "The UPI-PayNow linkage will grow in utility and will
contribute more in facilitating trade," Lee said.
    India received $89 billion in foreign remittances in
2021/22, the highest ever in a year by any nation. The World
Bank has projected that number to rise to $100 billion in the
current year.
    "This interlinkage aligns with the G20's financial inclusion
priorities of driving faster, cheaper and more transparent
cross-border payments...," the Reserve Bank of India (RBI) said
in a statement.
    In the India-Singapore link, to begin with, State Bank of
India  SBI.NS , Indian Overseas Bank  IOBK.NS , Indian Bank
 INBA.NS  and ICICI Bank  ICBK.NS  will facilitate both inward
and outward remittances while Axis Bank  AXBK.NS  and DBS India
will facilitate inward remittances, RBI added.
    For Singapore users, the service will be made available
through DBS-Singapore  DBSM.SI  and Liquid Group - a non-bank
financial institution. More number of banks will be included in
the linkage over time, it added.
    Initially, an Indian user can remit up to 60,000 Indian
rupees ($725.16) a day.
($1 = 82.7400 Indian rupees)
 (Reporting by Siddhi Nayak in Mumbai and Xinghui Kok in
Singapore; Writing by Swati Bhat; Editing by Muralikumar
Anantharaman)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848;))