‘It is necessary to reduce the time and cost of sending money from abroad’- RBI Governor

New Delhi| Reserve Bank of India Governor Shaktikanta Das advocated reducing the time and cost of sending money from abroad. He said that this is important for developing economies. The RBI Governor said that the new technology and payment system can be used to accelerate and expand cross-border payments.

“Money remittances are the first step to explore the possibilities of cross-border peer-to-peer (P2 P) payments for many emerging and developing economies, including India”, Das said during a conference on ‘Central Banking at Crossroads’. We believe that there is immense potential to significantly reduce the cost and time of such remittances”.

In addition, he noted that the feasibility of extending real-time gross settlement (RTGS) to settle transactions in major trading currencies such as the dollar, euro and pound could be explored through bilateral or multilateral arrangements.

He said, “India and some other economies have already initiated efforts to expand exposure to cross-border rapid payment systems both bilaterally and multilaterally. Speaking on e-Rupee launched by RBI, he said that Central Bank Digital Currency (CBDC) is an area which has the potential to facilitate efficient cross border payments.

Going forward, harmonization in standards and inter-operability will enable CBDCs to address serious financial stability concerns associated with cross-border payments and cryptocurrencies, he said. The RBI Governor also expressed concern over the misuse of Artificial Intelligence in the banking sector, saying that it could increase the risk of cyber attacks and data leaks. “Banks and other financial institutions should take adequate risk measures against all these risks”, he said. Banks should leverage AI and BigTech advantages.”