The central bank is exploring interoperability in the Trade Receivables Discounting System (TReDS), strengthening dedicated research and training capacity in digital payments, and examining the introduction of a uniform Domestic Legal Entity Identifier (DLEI) for entities playing a critical role in the ecosystem.
It added that a new class of Small Payment System Providers (SPSPs), which would not require authorisation by the RBI before carrying out their activities, shall be explored.
This comes at a time when there is a need to permit innovative solutions without directly regulating such entities from the start.
These may be brought within the regulatory fold only if and when they reach a specified level of activity, or when the activities are deemed to be significant or critical, the RBI said.
On cross-border payments, the RBI said that it will undertake a comprehensive review of the ecosystem to identify frictions across regulatory, operational, and technological layers, as part of efforts to align India with global best practices.
The RBI is examining the feasibility of introducing a single-window clearance mechanism to facilitate faster entry and operations for payment firms.
The central bank’s review will focus on improving transaction speed, reducing costs, and enhancing transparency across payment corridors.
It also plans to publish periodic reports analysing trends in cross-border payments, including transaction volumes, costs, and performance of various channels.
The initiative comes at a time when cross-border transactions are gaining importance for trade, remittances, and capital flows, even as existing systems remain complex and costly due to multiple intermediaries, jurisdictions, and compliance requirements.
“Cross-border payments are vital for India’s international trade and remittances, but they involve multiple participants and regulatory frameworks, making them inherently complex,” the document noted.
In a significant step towards easing compliance, the RBI has proposed streamlining the authorisation process for cross-border payment providers. Currently, entities must obtain approvals under multiple laws, including the Payment and Settlement Systems Act and the Foreign Exchange Management Act.
The RBI’s strategy is in line with the G20 roadmap for enhancing cross-border payments, which seeks to make transactions faster, cheaper, more inclusive, and transparent.
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.png?disable=upscale&width=1200&height=630&fit=crop "Brenda and John Romero: The industry is in a ‘horrible place’")