Mumbai: In an attempt to make foreign remittance networks open and more affordable, the Reserve Bank of India has defined cross-border payments as the second cohort of its regulatory sandbox (RS) software.
Under the scheme that launched earlier this year under the oversight of a central bank team, banks, fintech, and technology firms will partner and run real-time trial pilots that can then assess the feasibility of mass-market applications depending on the performance.
India is the world’s largest beneficiary of inbound remittances accounting for 15 percent of the global share of about $83 billion in 2019. In the first half-year of 2020, India got $27.4 billion, RBI said.
Besides, India’s daily average turnover of OTC foreign exchange instruments is around $40 billion where technology-led solutions will ease money movement and promote convenience, added the regulator.
Between December 21, 2020, and February 15, 2021, the window for submission of applications for qualifying businesses wishing to participate in the cohort has been set.
To this effect, by reducing the minimum net worth threshold from the current Rs 25 lakh to Rs 10 lakh to facilitate further applications, RBI also relaxed the enabling mechanism. Besides, the RS has also been permitted to invest in partnership companies and Limited Liability Partnerships (LLPs).
Two apps from fintech companies Natural Support Consultancy and Nucleus Technologies are currently being tested in the first cohort in the area of offline payments. RBI for the third cohort.