RBI continues to focus on further developing and deepening financial markets by boosting the role of INR as a cross-border medium of exchange

As per RBI annual report, during 2025-26, the Reserve Bank continued to focus on further developing and deepening financial markets through several initiatives, including rationalising external sector regulations for increased ease of doing business and encouraging the adoption of INR for cross border transactions. Going forward, the liquidity operations would continue to be in sync with the stance of monetary policy, while the foreign exchange operations would be principle-based, guided by the objective of ensuring orderly movements in the exchange rate of the INR. On cross border payments, the Reserve Bank signed memorandum of understanding (MoU) on digital asset collaboration with the Monetary Authority of Singapore (MAS). Bilateral discussions with MAS and the Central Bank of the UAE (CBUAE) were held for operationalising a cross-border CBDC pilot. The Reserve Bank also joined multilateral BIS-Innovation Hub-led initiatives, viz., Project Rialto, and Phase 2 of Project Mandala, which are focused on enhancing cross-border payments through CBDCs.

Further, for promoting ease of doing business and convenience, streamlining the regulatory process for cross border payment authorisation under the Payment and Settlement Systems (PSS) Act, 2007 and Foreign Exchange Management Act (FEMA), 1999 shall be explored along with examining the case for recognising small payment system providers under a perpetual regulatory sandbox structure, RBI noted in its payment vision 2028. Facilitating migration of payment instructions from one account to another and thereby enabling customers to change their bank accounts with minimal friction shall also be explored, it further noted.

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