RBI Governor Shaktikanta Das emphasized the need to reduce both the time and cost associated with overseas remittances, highlighting their critical role for developing economies like India. Speaking at the ‘Central Banking at Crossroads’ conference, he pointed out that new technologies and payment systems offer significant potential to streamline and broaden the scope of cross-border payments.
Das noted that remittances often serve as a gateway for developing nations to explore peer-to-peer (P2P) cross-border payments, stressing that there is ample opportunity to cut down costs and time for such transactions. He also suggested exploring the feasibility of extending the Real-Time Gross Settlement (RTGS) system for settling trades in major currencies like the dollar, Euro, and Pound through bilateral or multilateral agreements.
Efforts to link cross-border fast payment systems are already underway in India and other countries, according to Das. He also mentioned that Central Bank Digital Currencies (CBDCs) hold great promise for facilitating efficient cross-border payments. However, Das stressed the importance of standardization and interoperability among CBDCs to avoid financial stability risks posed by cryptocurrencies.
Additionally, the RBI Governor voiced concerns about the potential misuse of Artificial Intelligence (AI) in banking, warning that it could lead to increased cyberattacks and data breaches. He urged banks and financial institutions to implement strong risk mitigation strategies, emphasizing that while banks should leverage AI and BigTech, they must not let these technologies dominate the sector.
