The Union Cabinet, that is chaired by Prime Minister Narendra Modi, has approved a Memorandum of Understanding (MoU) between India and Singapore on the constitution of a fintech Joint Working Group (JWG).
The approval is ex-post facto that means the MoU was signed earlier, which was in June. The MoU will strengthen ties and encourage cooperation between the countries on digital governance and financial inclusion.
According to a press statement released by the Indian Government, the Joint Working Group has been constituted for cooperation in the area of fintech specifically.
It said the partnership between the nations will benefit both India and Singapore by enabling them to excel in the fields of Development of Application Programming Interfaces (APIs) and security in payment and digital cash flow.
The collaboration will also work to integrate a RuPay network for Electronic Transfers (NET) and develop regulatory sandbox models. A fintech sandbox or an API sandbox is a setting that developers use to test out characteristics displayed by the production environment on a real-time basis to help study responses from all the systems the application effects.
This enables creators to try out financial products or services within a set of well-defined parameters. The sandbox creates a space for the pilot testing of newly developed technologies and limits the consequences of its failure.
Apart from this, the collaboration will cover areas like UPI payment links, Aadhar Stack and e-KYC (Know Your Customer) in the ASEAN region. It will facilitate cooperation regarding regulations and solutions for the financial markets and insurance sector.
The press release said the JWG aims to improve regulatory connect, with a view to exchanging best practices. It intends to promote experience sharing on policies and regulations related to fintech.
It hopes to encourage the creation of standards related to the use of data in a non-discriminatory manner by fintech players. It is expected to initiate the capacity building of relevant officials in regulatory institutions, including dealing with new threats around cyber-security and financial fraud.
The JWG will promote co-operation between fintech firms, the development of fintech solutions for the financial sectors, and will encourage collaboration of entrepreneurship and start-up talent between the two countries.
Additionally, it will encourage the creation of an international version of Application Programming Interfaces (APIs) and standards that are interoperable with the APIs created in public systems in India and Singapore. This will enable cross-border authentication and e-KYC of residents using digital identities.
It will enable payment linkages-cooperation between Unified Payment Interface (UPI) and Fast And Secure Transfer (FAST) digital fund transfer platforms. The Joint Working Group will facilitate cross-learning on RuPay credit and debit cards through connections between National Payments Corporation of India (NPCI) and Network for Electronic Transfers (NETS) payment networks.
The JWG will enable QR (quick response) code-based payment methods and encourage the use of digital signatures such as through e-Sign, across borders.
