GulfHindi English Desk: The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) have signed two agreements in Abu Dhabi today (i) to establish a framework for promoting the use of local currencies, namely the Indian Rupee (INR) and the UAE Dirham (AED); and (ii) to collaborate on interlinking their payment and messaging systems.
The objective of establishing a framework for the use of local currencies between India and the UAE is to promote bilateral use of INR and AED through the establishment of a Local Currency Settlement System (LCSS). This agreement covers all current and capital account transactions, which will enable exporters and importers to invoice and settle payments in their respective domestic currencies, thereby facilitating the development of the INR-AED foreign exchange market.
In addition, the two central banks have agreed to explore the integration of their respective fast payment systems 👉India’s Unified Payments Interface (UPI) and UAE’s Instant Payment Platform (IPP); the integration of their respective card switches 👉RuPay Switch and UAESWITCH; and the integration of India’s Structured Financial Messaging System (SFMS) with the messaging system in the UAE.
The UPI-IPP integration will provide users in both countries with a fast, convenient, secure, and cost-effective cross-border remittance facility. The integration of card switches will facilitate mutual acceptance of domestic cards and smooth card transactions. These agreements aim to facilitate seamless cross-border transactions and enhance economic cooperation between the two countries.
en.gulfhindi.com News Summary
👉RBI and CBUAE signed two agreements in Abu Dhabi today
👉The agreements aim to establish a framework for the use of local currencies, INR and AED
👉The agreements also seek to interlink their payment and messaging systems
👉The establishment of a Local Currency Settlement System (LCSS) is intended to promote the use of INR and AED for cross-border transactions
👉The agreements also include the integration of their fast payment systems, UPI and IPP
👉Card switches, RuPay Switch and UAESWITCH, will also be integrated
👉The agreements aim to enhance financial cooperation between India and UAE
👉The agreements will facilitate seamless cross-border transactions and payments
👉The agreements also aim to promote greater economic cooperation between the two countries.
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