To make cross-border money transfers easier, India and Singapore launched on Tuesday a real-time link, an important move for the South Asian country that receives maximum remittances in the world.
Due to a partnership between Singapore’s PayNow service and India’s Unified Payments Interface (UPI), money transfers between the two nations can now be completed solely using mobile devices.
These agreements, which are becoming more common in Asia, often reduce payment costs. According to the website of the city-central state’s bank, Singapore has already created a cross-border payments link with Thailand and is working on one with Malaysia.
At a virtual event marking the service’s inauguration, Indian Prime Minister Narendra Modi said, “This will enable people from both the countries to immediately and at low-cost transfer funds (by) just using their mobile phones.” According to Modi, the connection will benefit migrant workers, professionals, students, and their families.
With the help of UPI, consumers can instantly transfer money between banks without revealing their bank account information. Similar to this, partner banks’ PayNow service enables transferring and receiving Singapore dollar funds from one bank to another using a mobile number.
At the inauguration event, Singapore’s Prime Minister Lee Hsien Loong stated that annual cross-border retail payments and remittances between the two nations presently exceed $1 billion.
“The UPI-PayNow linkage will grow in utility and will contribute more in facilitating trade,” Lee said.
In 2021–2022, India received $89 billion in remittances from abroad, the most ever in a calendar year. According to World Bank estimates, that amount will reach $100 billion this year.
The Reserve Bank of India (RBI) stated in a statement that “this interlinkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments….”
State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank would initially facilitate both inward and outgoing remittances in the India-Singapore link, while Axis Bank and DBS India will allow inward remittances, according to the RBI.