At least five Indian banks, including State Bank of India and ICICI Bank, are in talks with Singapore’s DBS Bank to launch a real-time funds transfer system using UPI as its backbone, reported. The economic period Wednesday.
The banks are in talks to start a joint remittance platform with the city-state in conjunction with Singapore’s PayNow remittance service, ET reported citing people familiar with the matter. This will make the international money transfer process in real time, instead of taking more than a day.
PayNow is a fast payment system in Singapore that enables peer-to-peer money transfer services.
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NPCI International Payments Ltd, a subsidiary of the National Payment Corporation of India which operates UPI, is working with the Monetary Authority of Singapore on the remittance system, which is expected to go live by December this year, reported HEY.
The remittance system will reduce the cost of transferring money between Singapore and India as it will provide seamless currency convertibility, reported HEY citing his sources.
Besides SBI and ICICI Bank, Axis Bank, state-owned Indian Bank and Indian Overseas Bank are included in ongoing discussions with DBS Bank.
“DBS Bank, Singapore is the settlement bank (for the overseas outbound remittance arm),” a bank spokesperson told ET, while confirming the talks.
The proposed platform will make the process a real-time transfer that will be “subject to the availability of funds and the absence of screening results”, according to DBS Bank.
The decision to launch the remittance system with Singapore comes as UPI started to gain traction in India. In August, transactions worth Rs 10.73 trillion were processed through UPI.
The Reserve Bank of India, which oversees the operational process, said in September last year: “The UPI-PayNow link is a milestone in the development of infrastructure for cross-border payments between India and Singapore, and aligns closely with the G20 financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.”