India and Singapore launched on Tuesday a real-time link to facilitate easier cross border money transfers between one of the world's biggest recipients of remittances and an Asian financial powerhouse.
Transfers of funds will now be possible using just mobile phones due to the tie-up between India's Unified Payments Interface (UPI) and Singapore's facility. Such cross-border transfer arrangements typically lower costs of payments.
"This will enable people from both the countries to immediately and at low-cost transfer funds (by) just using their mobile phones," Indian Prime Minister Narendra Modi said at a virtual event for the launch of the service. The linkage will help migrant workers, professionals, students and their families, said PM Modi.
UPI is an instant real-time payments system, allowing users to transfer money across multiple banks without disclosing bank account details. Similarly, PayNow is a service offered by participating banks that allows sending and receiving Singapore dollar funds from one bank to another using a mobile number.
To begin with, State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate both inward and outward remittances while Axis Bank and DBS India will facilitate inward remittances, the Reserve Bank of India (RBI) said in a statement.
For Singapore users, the service will be made available through DBS-Singapore and Liquid Group - a non-bank financial institution. More number of banks will be included in the linkage over time, the RBI said.
To begin with, an Indian user can remit up to 60,000 Indian rupees ($725.16) a day.
At the launch event, Singapore's Prime Minister Lee Hsien Loong said that cross-border retail payments and remittances between India and Singapore currently amount to over $1 billion annually.
"The UPI-PayNow linkage will grow in utility and will contribute more in facilitating trade," Lee said.
($1 = 82.7400 Indian rupees)
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