As per Shri Gunveer Singh, Chief General Manager of the Department of Payment and Settlement Systems at the Reserve Bank of India, India is looking forward to deeper collaboration with the UAE in the area of digital payments.
Singh said that India has to cooperate with the UAE in the area of digital payments because of their close geographic proximity and the sizeable Indian community there. The two nations have already taken certain steps to collaborate in this area, he continued, including the signing of two Memorandums of Understanding in July 2023 to improve the use of national currencies for bilateral trade and link payment and financial messaging systems.
Singh expressed his belief that the two nations can cooperate to advance digital payments and make them more effective and practical for everyone. The signing of two Memoranda of Understanding (MoUs) between the Reserve Bank of India (RBI) and the Central Bank of the UAE (CBUAE) in July 2023 was witnessed by President His Highness Sheikh Mohamed Bin Zayed Al Nahyan and Shri Narendra Modi, Prime Minister of the Republic of India, and was intended to support the burgeoning trade ties between the two nations.
In accordance with the agreements made between importers and exporters, the first MoU outlines a framework with a number of components and activities to make it easier to settle trade transactions in the two national currencies (the Indian rupee and the dirham of the UAE). It also specifies the kinds of transactions that qualify, permits the creation and use of correspondent accounts for the gain of financial institutions in both countries, encourages the use of direct exchange rates between the two national currencies, and offers options for managing liquidity in accordance with local laws and regulations.