RMA to launch Bhutan Fi­nan­cial Switch

This will fa­cil­i­tate dig­i­tal pay­ment trans­ac­tions be­tween Bhutan and In­dia

Business Bhutan - - Money - Dechen Dolkar from Thim­phu

The Royal Mon­e­tary Au­thor­ity (RMA) will soon launch the Bhutan Fi­nan­cial Switch with the RuPay net­work of In­dia to com­mem­o­rate the 50th an­niver­sary of In­doBhutan friend­ship this year.

Bhutan Fi­nan­cial Switch com­prises of tech­nol­ogy and sys­tem which has been de­vel­oped look­ing into pro­vid­ing and fa­cil­i­tat­ing in­ter­op­er­abil­ity among the banks in terms of ATM, post trans­ac­tions.

RuPay is In­dia’s indige­nous card scheme cre­ated by the Na­tional Pay­ments Cor­po­ra­tion of In­dia. It was con­ceived to ful­fill the Re­serve Bank of In­dia’s vi­sion to of­fer a do­mes­tic, open-loop, mul­ti­lat­eral sys­tem which will al­low all In­dian banks and fi­nan­cial in­sti­tu­tions in In­dia to par­tic­i­pate in elec­tronic pay­ments.

The ICT of­fi­cer of de­part­ment of in­for­ma­tion and tech­nol­ogy of RMA, Ravi Raj Mishra said that this ini­tia­tive is ex­pected to im­prove and fa­cil­i­tate cross-bor­der re­mit­tances be­tween the two na­tions.

He said although Bhutan’s fi­nan­cial sys­tem is small com­pris­ing five banks, one pen­sion, two in­sur­ance and three mi­cro­fi­nance in­sti­tu­tions, the in­ter­con­nec­tiv­ity of two switches is con­gru­ent with the ob­jec­tive of pro­mot­ing dig­i­tal pay­ments trans­ac­tions, which is ev­i­denced by the ef­fort from cen­tral bank of the both the coun­tries.

Through this ini­tia­tive, there are two phases, the cross-bor­der in­ter­op­er­abil­ity would al­low the cit­i­zens of both na­tions to seam­lessly per­form bank­ing trans­ac­tions us­ing their lo­cal bank is­sued ATM/ Debit Cards through de­liv­ery chan­nels such a ATMs, PoS and mer­chant’s e-com­merce site. The first phase of the project will en­able the ac­cep­tance of RuPay Cards in Bhutan across all cus­tomer above­men­tioned ac­cess points (de­liv­ery chan­nels).

Ravi Raj Mishra said that the first phase will be launch­ing on De­cem­ber this year and Bhutanese banks will be serv­ing as ac­quirer.

The sec­ond phase will en­able ac­cep­tance of Bhutanese banks’ lo­cal cards in all the ac­cess points of­fered by the banks in In­dia.

Fur­ther, the in­te­gra­tion is ex­pected to pave way for RuPay brand to be­come one of the grow­ing pay­ment net­works in the cards space at par with the dom­i­nated play­ers.

The in­ter­con­nec­tion of th­ese two switches would not only usher safe and con­ve­nient bank­ing but also help re­al­ize cost­ef­fec­tive and cash­less trans­ac­tions by for­mal­iz­ing the flows into main­stream bank­ing sys­tem in both coun­tries through proper le­gal and reg­u­la­tory frame­works.

It is mainly ini­ti­ated due to lack of proper mech­a­nisms to fa­cil­i­tate cross-bor­der pay­ments be­tween na­tions, how­ever some of the trans­ac­tions are be­lieved to be ex­e­cuted through cash that is un­recorded from the for­mal bank­ing sys­tems.

The ICT of­fi­cer also said that although some of the banks in the coun­try pro­vide in­ter­na­tional cards, the fa­cil­ity is ex­pen­sive.

The cost of this ini­tia­tive will be very min­i­mal, he added.

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