The Reserve Bank of India (RBI) and the State Bank of Vietnam (SBV) signed a Memorandum of Understanding (MoU) to promote cooperation in financial innovation and digital payments, including information sharing, regulatory coordination and payment system connectivity for cross-border QR code-based merchant payments.
The MoU marks a forward-looking and substantive step towards strengthening bilateral cooperation in financial innovation and digital payments, with the potential to enhance cross-border payment linkages and position India as a major fintech hub.
With the approval of the Union Cabinet, the RBI and the SBV signed an MoU on 5 May for cooperation in financial innovation and digital payments.
Both banks aim to deepen cooperation in financial innovations and digital payments by facilitating potential joint innovation and digital payment programmes and projects, including the development of connectivity in the payment system to enable cross-border transactions between the two countries for QR code-based merchant payments.
The scope of cooperation under the MoU covers, inter alia, information sharing on emerging market trends and developments, standards and best practices in digital payments and innovative technologies, regulatory frameworks pertaining to innovations, and the development and oversight of digital payments in financial services.
The MoU also provides for potential joint programmes and projects, including payment system connectivity for cross-border QR Code-based merchant payments between India and Vietnam.
Further, it is expected to enable greater efficiency in the processing of cross-border transactions between two countries and make these transactions transparent (upfront display of charges), convenient, in a real-time manner, and more cost-efficient. Also, facilitate trade and tourism between the two countries to provide greater export opportunities to businesses in India.
MoU between the RBI and the SBV is primarily a regulatory cooperation framework that is essential for maintaining smooth cross-border financial activities.
