Striding solidly in the right direction the Unified Payments Interface (UPI) is set to make another aloof idea gain concrete reality and that is UPI for NRIs. The idea in itself is very new and in the right direction. Implications of all sorts though emerge and added responsibilities of partner banks and Exchange boards too come to the fore. Nonetheless the new payment form conceived for the NRIs is set to increase the pace for further developments in applications of that sort. Increasingly new avenues for a niche market development for NRIs could widely find root in the entrepreneurial environment of India. A further elaboration of the initial steps, the processes involved and the future estimate of the present plan has been provided for a better understanding.
NRIs from a total of 10 countries can soon transfer funds online using the Unified Payments Interface (UPI) with their international mobile numbers.
NRIs from UK, US, Singapore,Canada, Australia, Oman, Qatar, UAE, Hong Kong and Saudi Arabia evident the countries with the most NRIs can now with the use of Non-Resident (External) Rupee (NRE) or Non-Resident Ordinary(NRO) bank accounts transact digitally without the use of an Indian mobile number. Let us understand some basic things. UPI is an instant real time payment system which facilitates inter-bank peer to peer(P2P) transactions. An equally important thing here is to understand what do NRE and NRO connotate. An NRE account is a bank account opened in India in the name of an NRI, to park 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. These incomes include rent, dividend, pension, interest etc. Previously the situation for NRIs was quite hectic to say the very least. Cash and other people’s money had to be relied upon which constantly affected their travels, proper sense of money and accounts too could not be maintained. This thing above everything else will help ease out the problem in a much bigger way. We will talk about this later, first we can understand the motives of NPCI and the other organisations as a whole who have vouched for this plan.
Earlier to onboard UPI to make payments, a user had to undergo a SIM binding process which thus integrated the user’s bank account with his or her Indian mobile number. This onboarding flow restricted NRIs using their Indian mobile number to experience the seamless payments. Albeit it is necessary to lay stress upon the fact that only NRE/NRO accounts would come under the rule. Cross border payments would not be allowed under the proposed program.
The Added Responsibility and FEMA- The NPCI ( National Payments Corporation of India) has taken the lead in the new plan. It will be enabling transactions from mobile numbers having country codes of the 10 countries mentioned along with the current domestic country code. When the completion of the process has been ensured the erstwhile financial formalities could be done away with, which until this time had been a kind of burden whenever an NRI was travelling herein India. In addition to the financial facilities advanced by NPCI it has also released certain guidelines to ensure that there are no hassles in the process. Partner banks of the future beneficiaries have been given time till 30th April to comply with the directions. Also they have been tasked with the responsibility to ensure such accounts are allowed according to the Foreign Exchange Management Act (FEMA) regulations, following the guidelines of Reserve Bank of India (RBI). All necessary anti-money laundering activities or combating of financing of terrorist checks and compliances too will be dealt with under the new guidelines.
Convenience and Ease of the Service- Major convenience factors for the NRIs can be seen in the proposed plan. The foremost of which is the replacement of expensive international cards. The cost of the international cards can now be done away with, millions of dollars can now be saved which erstwhile were required in the servicing or maintenance of these forms of payments. Additionally the establishment of an UPI centric ecosystem in India will certainly be a great enabler in linking the NRIs smoothly to the Indian merchants.
The announcement comes at a time when the Union Government has approved an outlay of ₹2,600 crore to promote payments using RuPay cards and the UPI. This will certainly strengthen the result that would be acquired by the NPCI linking. Another news connected with the aforementioned NRIs account linking is that of Shaktikanta Das who on January 6 announced ” For UPI, we have entered into agreements with countries in this region, for example with Bhutan and Nepal to make cross border payments much easier in this region.” This shows the progress made by India in the relevant direction especially relating to financial payments.
Effect on Remittance Earning
The non-applicability of charges on UPI transactions makes it an incredibly superb device for routing remittances back to India. India is the world’s largest international remittance (IR) destination. The Indian diaspora is one of the largest and the strongest economically. On track to receiving more than $100 billion in yearly remittance from the $89 billion the previous year this plan would surely enhance these figures too.18 million expats, a large working population and a totally large number of students would benefit in a huge way. The first thing is the Safety factor of UPI. A safe passage of money transfer is facilitated by the platform where the abiding regulation, checked and validated by the central bank ensures that the volume of money is safely vouched where the sender wants it to. The next important thing is the faster service of the platform. The real time transaction factor makes the service as fast as anything could be.The low cost element ensures that a diverse country like India with its own geographic complexity can effectively assimilate UPI and even ensure its success. This is the reason 381 banks are live on the platform, it is a very huge number by any standards. The NRI factor could possibly make this very Indian platform highly accessible to other countries as well, in addition provide a social value to the NRIs as well. The most important thing though, from all of this is simplification of the transaction process and reduced dependency.
Conclusion- The espousal of the plan is clear and concise. The adoption will ensure the completion of the process and maybe in the future the service will be extended to other countries as well. This would totally revolutionise the payments industry. A wholly new future beneficial to people as a whole awaits us.