Mumbai: The reserve Bank of India ,reserve Bank of India) proposes to adopt a structured financial messaging system (SFMS) – Indian Standard for Domestic Financial Messaging for Centralized payment System – global. It can be a regional alternative to the international financial messaging system. acutewhich has been the subject of Western sanctions.
“Supported by INFINET’s communication medium, SFMS is the Indian standard for domestic financial messaging for centralized payment systems (NEFT and RTGS). The feasibility of providing INFINET membership/technology in other jurisdictions will be explored,” RBI said in its vision. The document said. INFINET is short for Indian Financial Network – a closed user group for the Indian banking and financial sector.
In the wake of restrictions preventing the use of SWIFT for transactions with Russia, former RBI executive director G Padmanabhan had told TOI that the SFMS aims to ensure non-repudiation and security in messaging, thereby allowing large-value financial transactions. be enabled. This messaging technology has a use case that is similar to Swift. It will be a challenge for many countries to participate.
The RBI on Friday released its payment vision document for 2025 where it outlined the activities to be undertaken during the period till 2025. A key goal for these activities is integrity, inclusion, innovation and internationalization in addition to institutionalization.
Among other things, the vision document calls for the introduction of additional-factor authentication (AFA) for cross-border transactions. RBI requires all card payments to be authorized by an additional factor, which can be a one-time password or any other input. Internationally, transactions are done using card credentials only. “AFA has been a key factor in securing the security of domestic payments and giving users confidence in digital payments. In order to deliver a similar experience and enhance the security of international transactions carried out using cards issued in India, cross-border transactions have been undertaken. Implementation of AFA for the same will be explored,” the RBI said.
The central bank said it will pursue membership of Continuous Linked Settlement (CLS) – an institution that enables simultaneous settlement of both phases of cross-currency transactions for global currencies. The CLS was set up to prevent losses if the bank fails before the second leg of the transaction is concluded. “Internationalization of domestic currency is gaining importance in recent times as many countries are making efforts in this direction. With excellent financial market infrastructure and deepening forex and financial markets, a mechanism for international Indian Rupee Settlement through CLS Bank will help in increasing global acceptance of the domestic currency,” RBI said.
“Supported by INFINET’s communication medium, SFMS is the Indian standard for domestic financial messaging for centralized payment systems (NEFT and RTGS). The feasibility of providing INFINET membership/technology in other jurisdictions will be explored,” RBI said in its vision. The document said. INFINET is short for Indian Financial Network – a closed user group for the Indian banking and financial sector.
In the wake of restrictions preventing the use of SWIFT for transactions with Russia, former RBI executive director G Padmanabhan had told TOI that the SFMS aims to ensure non-repudiation and security in messaging, thereby allowing large-value financial transactions. be enabled. This messaging technology has a use case that is similar to Swift. It will be a challenge for many countries to participate.
The RBI on Friday released its payment vision document for 2025 where it outlined the activities to be undertaken during the period till 2025. A key goal for these activities is integrity, inclusion, innovation and internationalization in addition to institutionalization.
Among other things, the vision document calls for the introduction of additional-factor authentication (AFA) for cross-border transactions. RBI requires all card payments to be authorized by an additional factor, which can be a one-time password or any other input. Internationally, transactions are done using card credentials only. “AFA has been a key factor in securing the security of domestic payments and giving users confidence in digital payments. In order to deliver a similar experience and enhance the security of international transactions carried out using cards issued in India, cross-border transactions have been undertaken. Implementation of AFA for the same will be explored,” the RBI said.
The central bank said it will pursue membership of Continuous Linked Settlement (CLS) – an institution that enables simultaneous settlement of both phases of cross-currency transactions for global currencies. The CLS was set up to prevent losses if the bank fails before the second leg of the transaction is concluded. “Internationalization of domestic currency is gaining importance in recent times as many countries are making efforts in this direction. With excellent financial market infrastructure and deepening forex and financial markets, a mechanism for international Indian Rupee Settlement through CLS Bank will help in increasing global acceptance of the domestic currency,” RBI said.