The Reserve Bank of India (RBI) has announced a significant collaboration with Nepal Rastra Bank, aiming to integrate the Unified Payments Interface (UPI) of India and the National Payments Interface (NPI) of Nepal. This integration seeks to streamline cross-border remittances between the two countries, facilitating instant and cost-effective fund transfers.
Agreement Overview
- The RBI and Nepal Rastra Bank have formalized an agreement to integrate their fast payment systems, UPI and NPI respectively, to enable seamless cross-border transactions.
- The collaboration is designed to establish the necessary infrastructure for interlinking UPI and NPI, paving the way for efficient cross-border remittances.
- While the formal launch date of the linkage is yet to be determined, the terms of reference exchanged between the two central banks outline the roadmap for implementation.
Benefits of Integration
- Upon implementation, users of UPI and NPI will have the capability to conduct instant transactions between India and Nepal at reduced costs.
- The integration is expected to enhance financial connectivity between the two nations, strengthening their historical, cultural, and economic ties.
Broader Regional Impact
- This collaboration marks another step towards regional financial integration, following similar initiatives in countries like Sri Lanka, Mauritius, and France, where the Indian digital payment system, UPI, has been enabled.
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