Similar to SWIFT (Society for Worldwide Interbank Financial Telecommunications), which is used globally to transmit payments and securities across borders, India is trying to establish its own global financial messaging system.
People with knowledge of the proposal’s specifics told ET that it is a component of the government’s larger aim to internationalise the Indian rupee. The method will assist in rupee-based bilateral trade settlement.
Officials with knowledge of the situation said that a banker-led expert committee is investigating options and will present its recommendations to the government by the end of August. The State Bank of India, Bank of Baroda, Bank of India, and Central Bank of India are just a few of the institutions from which the committee’s members are chosen.
A bank official who wished to remain anonymous said, “One of the suggestions was to have an independent financing messaging system that can be used with countries with which we have bilateral trade agreements.” “This group will now offer recommendations for steps to take to make this operational and identify any obstacles. In light of this, the matter would be discussed with other parties, notably the Reserve Bank of India (RBI).
The Structured Financial Messaging System, or SFMS, used by the RBI, according to another official, will be examined by the committee.
