RBI Governor urges lower cost and faster overseas remittances using new payment systems
Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday called for reducing the cost and time associated with overseas remittances, which play a crucial role for developing economies like India. Speaking at the ‘Central Banking at Crossroads’ conference, Das emphasized the importance of leveraging new technology and payment systems to expedite and expand cross-border transactions. “Remittances are vital for many emerging economies. There is significant potential to lower both the cost and time for such transactions, which is a priority for countries like India,” Das said in his keynote address.
He also highlighted the potential of expanding Real-Time Gross Settlement (RTGS) systems to settle transactions in major global currencies, such as the US dollar, Euro, and Pound, through bilateral or multilateral arrangements. Das noted that India and other economies have already initiated efforts to link cross-border fast payment systems through both bilateral and multilateral means.
The RBI Governor further discussed the role of Central Bank Digital Currency (CBDC) in improving cross-border payments. He stressed that harmonization of standards and interoperability would be crucial to achieving efficient CBDC transactions, while also cautioning against financial stability risks posed by cryptocurrencies. Das also raised concerns about the misuse of Artificial Intelligence (AI) in banking, warning that it could increase the risk of cyberattacks and data breaches. He urged banks and financial institutions to implement strong risk mitigation measures, stating, "Banks must leverage the benefits of AI and Bigtech without allowing these technologies to dominate or exploit them."