MUMBAI, October 14 — The Reserve Bank of India (RBI) on Wednesday issued landmark regulatory directions permitting authorized non-bank payment system operators—including prepaid payment instrument (PPI) issuers and fintech aggregators—to facilitate cross-border outward personal remittances leveraging the Unified Payments Interface (UPI) infrastructure in partnership with Authorized Dealer Category-I banks.
Under the framework operationalized by the central banking regulator, outward transactions must remain strictly compliant with the statutory parameters of the Liberalised Remittance Scheme (LRS), which caps permissible current and capital account overseas transfers at \$250,000 per financial year per resident individual. Through direct application programming interfaces (APIs) networked with recipient fast-payment rails abroad—such as Singapore's PayNow, UAE's Jaywan, and European instant networks—Indian residents can execute instant retail transfers for university tuition, medical treatments, and family maintenance.
The RBI emphasized that strict adherence to the Foreign Exchange Management Act (FEMA 1999), customer due diligence, and automated suspicious transaction reporting under the Prevention of Money Laundering Act (PMLA 2002) remain mandatory for participating non-bank operators. The measure is projected to compress retail cross-border transaction fees from historical averages of 5–6 percent to under 2 percent.
The legal mechanics of the Liberalised Remittance Scheme (LRS introduced under FEMA in 2004), the institutional role of the National Payments Corporation of India (NPCI incorporated in 2008 under the Payment and Settlement Systems Act 2007), full Current Account Convertibility versus partial Capital Account Convertibility, and internationalisation of the Indian Rupee are central topics across UPSC Civil Services (GS-III: Banking & External Sector) and RBI Grade B examinations.