RBI Discusses Geopolitical Risks in Payments

Key Highlights on Cross-Border Payments and India’s Payment System

Geopolitical Risks and Payment Systems

• Geopolitical Factors: The Reserve Bank of India (RBI) identifies geopolitical risks including sanctions and financial restrictions as significant threats to cross-border payment systems.
• Impact on Global Infrastructure: Geopolitical tensions affect access to payment channels due to the reliant nature of global financial systems on a limited number of settlement currencies.

RBI Initiatives and Policies

• Payments Vision Document 2025: This document outlines the RBI's strategic plans, focusing on reducing frictions in global payment systems.
• Remittance Efficiency: The RBI is reviewing bottlenecks in remittance processes to expedite crediting inward cross-border payments to beneficiaries.
• Linking UPI with International Systems: Initiatives to enhance cross-border payments by integrating India’s Unified Payments Interface (UPI) with fast payment systems (FPS) of other countries.
• Project Nexus Participation: India has joined Project Nexus with Malaysia, the Philippines, Singapore, and Thailand to promote instant retail payments across borders.

Achievements and Statistics

• Inward Remittances: India led global remittances with $137.7 billion in 2024, more than double that of Mexico's $67.6 billion, showcasing India's dominance in the remittance market.
• Economic Contributions: The earnings from remittances play a crucial role in bolstering India's foreign exchange reserves and overall economic stability.

Domestic Payment Ecosystem Growth

• Transaction Volumes: There was a significant increase in transaction volumes from 3,248 crore in 2019 to 20,849 crore in 2024.
• Total Value of Transactions: The transaction value rose from Rs 1,775 lakh crore in 2019 to Rs 2,83,010 lakh crore in 2024.
• 2025 Data: In the first half of 2025, payment volumes reached 12,549 crore with a value of Rs 1,572 lakh crore.

Current International Enabling Systems

• UPI Implementation: UPI-based QR code payments enabled in various countries: Bhutan, France, Mauritius, Nepal, Singapore, UAE, and Qatar, allowing seamless transactions for Indian travelers.

Conclusion

The RBI is actively addressing the challenges posed by geopolitical risks to enhance the efficiency and security of cross-border payments, while simultaneously promoting India's growth as a global leader in remittances and payment systems through strategic partnerships and technological innovations.