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Mahesh

19/07/23 07:00 AM IST

India, UAE Agree On Trade Settlement In Local Currencies, Linking Fast Payment Systems

In News
  • India and the UAE recently agreed to start trade settlement in their currencies and link their fast payment systems to make international financial interactions simpler.
About the MoU
  • The MoU on establishing a framework for the use of local currencies for transactions between India and the UAE aims to put in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally.
  • Under the MOU on ‘Payments and Messaging Systems’, the central banks of the two countries agreed to cooperate on linking their Fast Payment Systems – Unified Payments Interface (UPI) of India with the Instant Payment Platform (IPP) of the UAE.
  • The two sides also agreed to cooperate on linking the respective Card Switches (RuPay switch and UAESWITCH); and exploring the linking of payments messaging systems – Structured Financial Messaging System (SFMS) of India with the messaging system in the UAE.
  • The Indian Institute of Technology (IIT) Delhi is the second such institution to announce setting up an offshore campus after IIT Madras.
  • India and the UAE have set a target of $100 billion for bilateral trade.
  • Encouragingly, the trade volume has already reached $85 billion, showcasing the strong economic ties between the two nations.
  • The MoU on trade settlement and fast payment systems is expected to further enhance trade cooperation and facilitate smoother financial transactions.
  • Peekay Intermark Ltd. and YES BANK were the first users of the newly established LCSS.
  • They successfully settled a gold transaction worth Rs 12.84 crore for 25 kgs of gold, marking a significant milestone in utilizing the system for commercial transactions.
Source- Outlook

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