RTGS transactions in dollar, pound and euros soon? Here’s what RBI is planning
Oct 15, 2024
The Reserve Bank of India may expand the RTGS to include major currencies like the US dollar, euro, and pound sterling. This move aims to make cross-border payments more affordable and faster.
RTGS in dollars soon? Real Time Gross Settlement System or RTGS could possibly be expanded to include the settlement of transactions in major trade currencies such as the US dollar, euro, and pound sterling. The RTGS, which is used for real-time fund transfers between banks, is operated by the RBI.
RBI governor Shaktikanta Das has said that the central bank is considering widening the scope of RTGS.
This expansion would be achieved through bilateral or multilateral arrangements. Expanding RTGS to include major trade currencies would speed up access to more affordable cross-border payments and remittances.
The RBI has consistently advocated for more affordable cross-border payment systems. In September 2023, deputy governor T Rabi Sankar described the current high costs associated with cross-border remittances as "simply unconscionable." An expanded RTGS using major trade currencies would facilitate faster access to less expensive cross-border payments and remittances.
According to an ET report, Das, speaking at the RBI@90 conference in New Delhi, mentioned that "India and a few other economies have already commenced efforts to expand linkage of cross-border fast payment systems both in the bilateral and multilateral modes."
In addition to the potential expansion of RTGS, Das emphasized the role of central bank digital currencies (CBDCs) in enabling efficient cross-border payments.
However, he noted that harmonization of standards and interoperability would be necessary to facilitate this process. While countries may prefer to design their own systems based on domestic considerations, Das suggested that this challenge could be overcome by developing a plug-and-play system that allows replicability of India's experience while maintaining the sovereignty of respective countries.
[The Times of India]
