RBI joins Project Nexus

The Reserve Bank of India (RBI) has announced its decision to join “Project Nexus” with ASEAN countries to develop a platform to enable instant cross-border retail payment. It is expected that the platform will go live by 2026.

What is Project Nexus?

  • Conceptualised by the Bank for International Settlement (BIS), Project Nexus is a multilateral international initiative that aims to facilitate instant cross-border retail payments linking fast payment systems (FPSs).
  • It will interlink FPSs of four ASEAN nations –Malaysia, the Philippines, Singapore, and Thailand- and India. These countries would be the founding members of and first mover countries of this platform.
  • The BIS and the central banks of these countries including RBI signed an agreement in this regard. Indonesia is a special observer country.
  • After coming into effect, Project Nexus will play a crucial role in facilitating retail cross-border payments efficiently, swiftly, and in a cost-effective way.
  • The RBI has consistently been partnering with various countries to link India’s FPS- Unified Payments Interface (UPI), with their respective FPSs to promote cross-border Person to Person (P2P) and Person to Merchant (P2M) payments. This effort of the RBI enhances the reach of Indian payment systems globally while strengthening bilateral relations.

About ASEAN

  • The Association of Southeast Asian Nations (ASEAN) is a regional political and economic organisation of 10 Southeast Asian countries. It was established on 8 August 1967 with the goal of fostering political and social stability in the region, promoting economic growth, encouraging active collaborations, and promoting Southeast Asian studies, among others. Indonesia, Malaysia, Philippines, Singapore and Thailand are the founding members of the group.
  • The ASEAN members include Indonesia, Laos, Brunei, Cambodia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, and Vietnam. These countries together have over 662 million people. They hold immense significance for global stability and the economy. Notably, India is not a member of ASEAN.
  • The ASEAN leads some prominent forums such as the ASEAN Regional Forum, ASEAN Plus Three, East Asia Summit (EAS), and ASEAN Defence Ministers Meeting (ADMM).
  • The Secretariat of ASEAN is located in Jakarta, Indonesia.

About India-ASEAN Relations

  • Considering India’s Act East Policy, ASEAN holds special significance for India. India has always emphasised its relationship with ASEAN, establishing a dialogue partnership 25 years ago. It even created a dedicated Mission to ASEAN and the EAS in Jakarta.
  • India has a great trade relationship with ASEAN, with over 10% of India’s total global trade.

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