Non-Resident Indians (NRIs). Sending money back home or making merchant payments will be hassle-free, as the ‘Made in India’ real-time payments solution the Unified Payments Interface (UPI) will now be available to Indians living abroad.

 

National Payments Corporation of India (NPCI), the organization for operating retail payments and settlement systems in India, announced that it instructed members of the Unified Payments Interface (UPI) ecosystem to allow non-resident account types such as non-resident external (NRE)/ non-resident ordinary (NRO) accounts having international mobile numbers to get onboarded and transact through UPI.

 

 

NRIs who wish to avail of this facility need to have a NRE or NRO account. For the unversed, an NRE account isa bank account opened in India in the name of an NRI, topark his foreign earnings whereas, an NRO account is a bank account opened in India in the name of an NRI to manage the income earned by him/her in India.

 

UPI account is only allowed as “per the extant Foreign Exchange Management Act (FEMA) Regulations and adherence to the RBI guidelines.

 

UPI Modalities

For a person to have a UPI ID, he/she needed an Indian mobile number. When a user activates UPI from an app, for instance, Paytm, the app sends an SMS confirming that the mobile number is linked to the bank. This meant that those abroad had to keep their India numbers, which is exorbitant owing to international roaming prices.

 

NPCI said that now users will be able to access UPI without relying on their India mobile phone number

 

NRIs in 10 countries will be able to use UPI for payments including Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates, and the United Kingdom.

 

 

When will the facility begin?

UPIs for NRIs will commence shortly. All 382 member banks of NPCI have been asked to ensure that all non-resident account types are onboarded by 30 April.

 

UPI’s success story

Since its launch in 2016, the UPI system has gained massive popularity.

UPI recorded over 7.82 billion transactions worth Rs 12.82 trillion in December 2022.

 

Read More: What NRIs Need To Know About Form 10F

 

The system began with 21 banks in 2016 and today has expanded to 381 banks, enabling billions of digital transactions each month.

The Reserve Bank of India (RBI) stated on Monday that it will start experimental launches of the Digital Rupee (eâ1) for particular use cases on November 1, 2022. The first Digital Rupee experiment will start on Tuesday and will be in the Wholesale segment (eâ1-W), according to the notification.

State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC are among the nine banks listed by the RBI.

In October of last year, RBI made a proposal to the government to extend the use of the paper rupee to include digital currency. RBI has already stated its opposition to private digital currencies.

 

 

The much-anticipated introduction of the CBDC was first officially confirmed by the Union government by Union Finance Minister Nirmala Sitharaman, who made the announcement earlier this year. The FM claims that the implementation of CBDC, which will be based on blockchain technology, will strengthen the digital economy.

 

What is Central Bank Digital Currency (CBDC)?

Central Bank Digital Currency (CBDC) is a digital form of legal money issued by a central bank, according to the Reserve Bank of India. Simply described, it is an electronic version of the Indian Rupee, a sort of fiat money. As a result, it can be converted into fiat money 1:1.

According to RBI, “CBDC is the legal tender issued in digital form by a central bank. It is interchangeable one-to-one with fiat currency and is the same as fiat currency. Its only distinction is in form.

 

 

CBDC will have all the benefits associated with cryptocurrencies and other electronic payment methods. A digital currency can never be physically destroyed, torn, burned, or otherwise harmed. Additionally, they are not truly lost. The lifeline of a digital form of cash will therefore be longer than that of notes.

Another key benefit of the Digital Rupee over other cryptocurrencies is that it will be regulated by a single entity, lowering the volatility risk associated with other digital currencies like Bitcoin.

 

Read More: Tax Benefits & Deductions for Senior Citizens

 

The RBI has frequently voiced worries about the use of private cryptocurrencies like Bitcoin, Ether, and others for tax evasion, money laundering, and financing terrorism. Its own CBDC debut has been seen as a way to reconcile the advantages and disadvantages of digital currency.