The National Payments Corp. of India (NPCI) has announced the extension of the 'UPI One World' wallet feature to all inbound international travellers. This service has been made available to delegates attending the World Heritage Committee meeting in New Delhi from July 21 to 31. Travellers can now avail the service from authorized prepaid payment instrument issuers at airports, hotels, designated money exchange locations, and other touchpoints. The wallet can be loaded with cash or any other payment mode, and travellers can make payments by scanning a QR code at merchant locations. Unused balance can be transferred back to the original payment source in accordance with foreign exchange rules. This move is expected to boost digital payments in India and provide greater convenience to international travellers [61f6980e].
The Reserve Bank of India (RBI) has announced changes that allow Indian investors to use the Gujarat International Finance Tec-City (GIFT City) as a route for more overseas spending and investments. The changes expand the usage of foreign currency accounts in GIFT City beyond investing in overseas-listed securities and paying tuition for foreign universities. This move is expected to boost banking and financial services in GIFT City, benefiting banks and opening up opportunities for life insurance companies. Additionally, the changes will provide authorities with greater visibility over how money remitted overseas is being deployed. GIFT City, launched in 2011, is an alternative to regional financial centers and offers easier regulations compared to the rest of India [ec7c0af9].
The Chairman of Intercontinental Consultants and Technocrats (ICT), K K Kapila, has called on the Indian government to enable direct foreign currency transactions within the country through the RBI. Currently, even domestic transactions in the U.S. dollar between entities within India necessitate routing through the U.S. banking system, incurring transaction fees. Kapila emphasized the need for a streamlined approach where transactions involving foreign currencies like US dollars are facilitated directly through the RBI. He argues that this practice leads to a significant amount of funds leaving the Indian economy in the form of fees paid to American banks, causing unnecessary costs to Indian businesses and the economy. Enabling direct foreign currency transactions through the RBI would not only reduce costs but also promote efficiency in the Indian financial system [5c821732] [113c394a].
The RBI's focus on strengthening the country's IT systems and cybersecurity measures is in line with the increasing demand for technology skills in the banking sector. Indian banks have responded to the RBI's scrutiny by increasing their technology spending. Previously, banks were spending between 6% and 8% of their operating expenses on technology, which was significantly lower than the global average of 10% to 12%. However, in response to the RBI's concerns and the recent sanctions imposed on Kotak Mahindra Bank due to technology-related deficiencies, Indian banks are planning to increase their technology spending to around 10% of their operating expenses. This increased investment will be used to upgrade core systems, enhance monitoring of digital fraud, protect customer data, and implement tech-driven processes for customer verification. Private lenders such as ICICI Bank, Axis Bank, Yes Bank, and Kotak Mahindra Bank are among those planning to increase their IT spending to address the growing digital activity. The RBI has highlighted the need for the banking system to be better prepared to handle the surge in digital banking transactions, and cybersecurity has become a key focus area for both banks and the RBI [681cdcb2].
In line with the increasing demand for technology skills in the banking sector, the State Bank of India (SBI) has announced its hiring strategy for FY25. SBI plans to onboard around 12,000 freshers in FY25, with 85% of them being engineering graduates. This hiring strategy reflects SBI's focus on meeting the increasing sector demands and regulatory standards. Chairman Dinesh Khara emphasizes that there is no bias towards engineers and highlights the importance of training for various business and IT roles. SBI recognizes the need to invest heavily in tech training to ensure its staff stay ahead in technology and are equipped to handle the evolving banking landscape [91c5b12f].
Payments technologies like CBDCs and real-time payments are transforming consumer expectations in key outbound student markets including China and India. The number of international students has more than tripled since 1998, reaching 6.4 million in 2020. Recent economic challenges have led to a slowdown in outbound students in China, South Korea, the US, and Nigeria, but robust growth is still expected in international students overall. China and India are expected to remain the leading senders of international students. Total cross-border payment flows are expected to reach $290 trillion by 2030, with the Asia-Pacific region forecasted to be the fastest-growing region for cross-border payments. China's alternative payment system built on digital wallets and real-time payments is leading the way in payments innovation, and India and Brazil have also experienced significant growth in real-time payments. Advancements in financial technology are changing the landscape of education payments, and education institutions must be prepared for the future [5d30f78e] [61f6980e].