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India and Singapore have linked their digital payments systems, UPI and PayNow, in a bid to push cross-border payments by allowing transactions up to S$1000 per day (roughly INR 60,000).
The linkage, announced on Tuesday, will seamlessly allow anyone in India or Singapore to transfer funds held in their bank accounts or e-wallets to someone in the other country using UPI ID, mobile number of VPA (Virtual Payment Address).
Currently, the State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will participate in inward and outward remittances in India. Axis Bank and DBS India will also facilitate inward remittances. People in Singapore can avail of the transfer services via DBS Singapore and Liquid Group. More banks are expected to be added to the collaboration in the future.
“Customers of the participating banks can undertake cross-border remittances to Singapore using the bank’s mobile banking app/internet banking. To begin with, an Indian user can remit up to ₹60,000 in a day,” the Reserve Bank of India said. “At the time of making the transaction, the system shall dynamically calculate and display the amount in both the currencies for convenience of the user.”
The plans for this linkage were announced in 2021, with the deadline set for mid-2022 to ease the annual billion-dollar transactions between the two countries. The linkage will allow transactions between the two countries to get completed within a minute — similar to how domestic transactions work on UPI and PayNow.
“This interlinkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore,” RBI added.