New Delhi, August 12 (IANS). Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that discussions are underway on the possibility of linking Fast Payment System and Central Bank Digital Currency (CBDC) among BRICS countries, with the aim of making cross-border payments faster, cheaper and more efficient. The discussions are taking place at a time when India is preparing to host the BRICS summit in September 2026.
The BRICS grouping includes Brazil, Russia, India, China and South Africa among other member countries. Addressing the FIBAC conference held in Mumbai, Sanjay Malhotra said that cross-border payments are among the shared priorities of the BRICS countries, as there is ample potential in this sector to reduce costs and make payment processing more efficient.
He said that various options are being considered to make retail payments faster and economical. According to the RBI Governor, several options are currently under discussion, including the use of CBDC and establishing connectivity between fast payment systems of different countries.
“Cross-border payments is an area in which all of us, especially the BRICS countries, have a keen interest. We feel there is huge potential here to reduce transaction costs. Various options are being considered, but the process is currently in the discussion stage,” Malhotra said.
He also informed that RBI continues its efforts to promote the internationalization of the Indian rupee and the use of local currencies in trade and payments. In this direction, India has already implemented local currency-based trade arrangements with many countries.
The RBI Governor said India has established bilateral local currency arrangements with Indonesia, Maldives, Mauritius and the United Arab Emirates (UAE). He stressed that more efforts should be made to increase the volume of such transactions, so as to reduce dependence on the dollar and reduce trade costs.
In his address, Sanjay Malhotra advised Indian banks to look at Artificial Intelligence (AI) not just as a risk but as an opportunity. He said that Indian banks cannot remain inactive in the rapidly changing digital world.
“Indian banks cannot just sit on the sidelines and wait for change. They have to embrace AI and put in place strong policies to better utilize it,” he said. He advised banks to inventory all their AI models and implement board-approved policies related to AI governance.
Discussing global economic conditions, the RBI Governor acknowledged that ongoing tensions in West Asia and other geopolitical developments could pose risks to India's economic growth in the near term. However, he said that steps taken by the government and policy makers can make the Indian economy stronger in the long run.
He said steps like diversification of energy and fertilizer supply sources, reduction in energy consumption intensity, ethanol blending programme, promotion of electric vehicles and free trade agreements (FTAs) will help in enhancing India's economic strength.
Malhotra expressed confidence that the Indian banking system is well placed to face the current global challenges. According to him, banks have strong capital base, low non-performing assets (NPAs) and healthy profitability, allowing them to effectively weather global uncertainties.
He said a strong banking system, expansion of digital payments infrastructure and local currency-based trading system will help India play a more influential role in the global financial landscape. The ongoing discussions among BRICS countries towards connecting payment systems and CBDC is also part of this broader economic strategy.
–IANS
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