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Source-This post on Project Nexus of RBI has been created based on the article “What is Project Nexus that RBI has signed up for?” published in “The Indian Express” on 2 July 2024.
Why in the news?
Recently, the Reserve Bank of India (RBI) has joined Project Nexus. It is to expand the international reach of India’s Unified Payments Interface (UPI). This involvement aims to facilitate instant cross-border Person to Person (P2P) and Person to Merchant (P2M) payments.
About Project Nexus
1) About: It is a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payments Systems (FPSs).
2) Initiated by: Project Nexus is conceptualised by the Innovation Hub of the Bank for International Settlements (BIS).
3) Goal: Its goal is to enable instant cross-border retail payments by interlinking domestic Fast Payment Systems (FPSs) globally.
4) It is the first BIS Innovation Hub project in the payments area to move towards live implementation.
5) Objective: The project aims to standardize the way Instant Payment Systems (IPS) connect to each other. This avoids the need for payment system operators to build custom connections for each new country, simplifying the process.
6) Founding Members: The founding members include Malaysia, the Philippines, Singapore, Thailand, and India. Indonesia will also join the Nexus platform.
These countries signed an agreement with BIS on June 30, 2024, in Basel, Switzerland.
Key Features and Benefits
i) Instant Cross-Border Payments: Nexus allows cross-border payments to be completed within 60 seconds in most cases. It enhances the speed and efficiency of international payments.
ii) Single Connection Platform: Operators can connect to the Nexus platform once, gaining access to all other countries on the network. This single connection significantly accelerates the growth of instant cross-border payments.
UPSC Syllabus: Indian Economy
