ECB, RBI agree to start initial phase of interlinking domestic payment systems

The central banks of India and the European Union have agreed to start the initial phase of linking domestic payments systems, the Reserve Bank of India said on Friday.

The interlinking will aim to facilitate cross-border remittances between India and the euro zone, the RBI said.

The Reserve Bank of India has been actively pursuing interlinking of its locally developed Unified Payments Interface (UPI) with fast payment systems of other jurisdictions to promote cross-border payments.

"The decision is part of the Euro system's overall efforts to make it easier for businesses and consumers in Europe to send and receive payments to and from other countries, including remittances," the European Central Bank said in a statement dated Thursday.

India is among the top ten recipients of euro area remittances, the ECB said.

This comes at a time when New Delhi and Brussels are holding talks to finalise a long-pending trade deal they aim to conclude by end of 2025.

Separately, India is also in talks with countries in Africa and South America to help them build a digital payments system using UPI as a blueprint, Reuters reported earlier this year.