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Bloomberg
India and Singapore linked their systems that enable real-time money transfers between the two nations, as countries in the region seek to bring down barriers to the quick movement of funds.
Reserve Bank of India’s (RBI) Governor Shaktikanta Das initiated the first transaction with his counterpart Managing Director Ravi Menon, according to a statement by the Monetary Authority of Singapore.
The India-Singapore payment connection is part of the trend in Asia where instantaneous fund transfers via mobile phones are happening, bypassing bank branches and doing away with high transfer fees. Singapore rolled out a similar connection with Thailand in 2021, and has said it’s working with Malaysia for such project.
The idea for the linkage was mooted in 2018, Singapore’s Prime Minister Lee Hsien Loong said during the event. The so-called PayNow-UPI linkage is India’s first cross-border real-time payments systems connection and Singapore’s second.
Singapore is among the top countries sending remittances to India, after the US, United Arab Emirates and the UK, accounting for almost 6% of inward flows in the fiscal year ended in March 2021, according to RBI. For the following fiscal year, India saw foreign inward remittances of $89 billion.
DBS Group Holdings Ltd is the first participating bank from Singapore in this tie-up. Apart from DBS, non-bank financial institution, Liquid Group, will also offer the cross-border fund transfers.
The banks in India participating in this linkage are Axis Bank Ltd, DBS India, ICICI Bank Ltd, Indian Bank, Indian Overseas Bank and State Bank of India, the MAS statement said.
For a start, selected customers of Singapore’s largest bank will be able to use the PayNow-UPI linkage to transfer funds of as much as S$200 ($150) per transaction, capped at S$500 a day, according to a DBS statement. The service will be extended to all customers by March 31, and they will be able to transfer funds of as much as S$1,000 a day.
Among banks in the city-state, DBS has been the most aggressive in expanding in India. It bailed out a struggling local lender more than two years ago, and has been looking to invest more in its India unit to accelerate growth.