The Reserve Bank of India (RBI), in its fifth bi-monthly monetary policy committee (MPC) meeting that concluded on December 6, 2024, proposed linking the FX-Retail platform with the Bharat Connect platform operated by the National Payments Corporation of India (NPCI). This initiative aims to enhance the user experience and foster greater transparency and fairness in currency pricing.
On expanding the FX-Retail platform’s reach through linking with Bharat Connect, Das stated in his speech, “Presently, the FX-Retail platform is accessible through an internet-based application. To expand the reach of the FX-Retail platform and enhance user experience, it is proposed to facilitate the linking of the FX-Retail platform with Bharat Connect (earlier known as Bharat Bill Payment System) operated by NPCI Bharat Connect. The linkage will enable users to register and transact on the FX-Retail platform through the apps of banks (mobile applications, internet banking, etc.) and non-bank payment system providers, which are integrated with Bharat Connect”.
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There are two components in the proposals: FX-retail and Bharat Connect. Here is the detail of what these offer.
FX-Retail Platform:
‘FX-Retail’ is a digital platform for buying and selling foreign exchange. It was launched on August 5, 2019, to provide customers convenience in booking forex rates for their foreign exchange needs.
As per MPC statement, “With the objective of bringing greater transparency and fairness in the pricing of foreign exchange for users, especially for individuals and the Micro, Small and Medium Enterprises, the Clearing Corporation of India Limited (CCIL) launched the FX-Retail platform in 2019”.
The platform offers customers forex trading in the USD-INR pair, where they can book orders in three ways:
CASH (for delivery on the same day)
TOM (for delivery on the next forex working day)
SPOT (for delivery on the second forex working day)
There is no limit on the number of transactions per day per customer, but there could be restrictions on the total amount of daily transactions, set by the banks. Notably, there are no charges for transactions up to USD 50,000, in a day.
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Bharat Connect Platform:
The platform was launched first as a pilot in 2016 as the Bharat Bill Pay System. Later, on August 29, 2024, it was renamed Bharat Connect. The purpose of creating this platform is to offer an interoperable and single platform to users for making their recurring payments, such as utilities and other regular bills.
It enhances the visibility of different billers on a single portal, including banks' mobile apps, UMANG, UPI-enables Apps, and NPS payments, among others. Now, when the proposal materialises, FX-retail will also be available on Bharat Connect.
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How Will FX-Retail Be Expanded?
Das said, “In the first phase, it is proposed to implement a pilot facilitating the purchase of US dollars against the Rupee by individuals and sole proprietors. Going forward, the scope will be expanded to cover other FX transactions including the sale of US dollars against the Rupee and other categories of users. Users will continue to have the option to directly access the FX-Retail platform, as hitherto, and transact under the existing mechanism”.
RBI will issue the instructions separately for banks on the operational aspects of the pilot.
