RBI plans simpler cross-border payment approvals to boost MSMEs, exporters: EY report

The Reserve Bank of India (RBI) is set to streamline cross-border payment approvals, aiming to reduce regulatory hurdles for businesses and exporters. This move is a key component of the Payments Vision 2028, which identifies cross-border transactions as crucial for India's digital payment growth.

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Cross-border payments appear as a strategic priority, with proposed simplification of authorizations -- potentially through a single-window approach -- along with a comprehensive ecosystem review.

According to an EY report, the RBI is shifting its focus from merely expanding digital payment adoption to enhancing the efficiency of international transactions. The vision includes simplifying authorizations, potentially through a single-window approach, and conducting a thorough review of the cross-border payment ecosystem.

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Crucially, to promote the ease of doing business, the RBI is looking to examine introducing a 'single-window application process' for cross-border payment authorization under both the PSS Act and FEMA.

The RBI plans to identify and remove regulatory and operational bottlenecks, particularly benefiting Micro, Small, and Medium Enterprises (MSMEs) and exporters engaged in international trade. The proposed "single-window application process" for cross-border payment authorizations under both the Payment and Settlement Systems (PSS) Act and the Foreign Exchange Management Act (FEMA) aims to improve the ease of doing business.

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The focus in the last round was on the initial global outreach of domestic systems like UPI, RuPay and NEFT/RTGS.

This strategic focus on cross-border payments marks an evolution from previous visions, which concentrated on the international expansion of domestic systems like UPI and RuPay. The latest vision also emphasizes stronger user protection, fraud management, and the use of artificial intelligence and data analytics for risk monitoring and policymaking, positioning India as a global leader in payments.

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A key focus is the shift toward AI-led and data-driven oversight, including AI-queriable payments databases, to improve risk monitoring, fraud detection and policymaking.