Lok Sabha Question No. 157 (STARRED), answered on 2023-07-31
Subject: Internationalisation of Indian Rupee
Ministry: FINANCE
Asked by: Sougata Ray

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## STARRED QUESTION NO. * 157

ANSWERED ON MONDAY THE 31 st  JULY, 2023/ SRAVANA 9, 1945 (SAKA)

## INTERNATIONALISATION OF INDIAN RUPEE

## *157: PROF. SOUGATA RAY:

Will the Minister of FINANCE be pleased to state:

- (a)   the details of reports of Reserve Bank of India Committee on Internationalisation of Indian Rupee;
- (b)  the efforts made by the Government so far for the inclusion of Indian currency in International Monetary Fund's (IMP's) Special Drawing Rights (SDR);
- (c)  the details of world currencies in the basket of SDR as of now; and;
- (d)  the  steps taken so far by the Government to integrate Indian payment systems with  other  currencies  with  cross  border  transactions  and  strengthening  of financial markets?

## ANSWER

FINANCE MINISTER

(SMT. NIRMALA SITHARAMAN)

- (a) to (d): A Statement is laid on the Table of the House.

***

## STATEMENT REFERRED IN REPLY TO LOK SABHA STARRED QUESTION NO. *157 FOR 31 st  JULY  2023 ON 'INTERNATIONALISATION OF INDIAN RUPEE' TABLED BY PROF. SOUGATA RAY, MEMBER OF PARLIAMENT

(a) : An Inter-Departmental Group (IDG) of the Reserve Bank of India (RBI) was constituted in December 2021 to examine the issues related to internationalisation of INR and suggest a way forward. IDG has submitted its report to RBI.

(b) and (c) : There are two selection criteria for inclusion of a currency in the Special Drawing Rights (SDR) basket:

- i. Export  criterion:  exports  of  goods  and  services  during  the  most  recent  five-year period before the effective date of the revision.
- ii. Freely  usable  currency  criterion:  As  per  International  Monetary  Fund's  (IMF)'s Articles  of  Agreement,  a  freely  usable  currency  is  one  that,  as  determined  by  the Fund,  is  (i)  widely  used  to  make  payments  for  international  transactions  and  (ii) widely traded in the principal exchange markets.

The  SDR  is  an  international  reserve  asset  created  by  the  IMF  to  supplement  the  official reserves  of  its  member  countries.  The  value  of  the  SDR  is  based  on  a  basket  of  five currencies - U.S. Dollar, Euro, Renminbi, Japanese Yen, and British Pound Sterling. IMF, with effect from 01.08.2022, has assigned the following weights:

- i. U.S. Dollar: 43.38 percent
- ii. Euro: 29.31 percent
- iii. Chinese Renminbi: 12.28 percent
- iv. Japanese Yen: 7.59 percent
- v. Pound Sterling: 7.44 percent

The SDR basket is reviewed quinquennially. At the time of 2022 review of SDR, India was ranked as the 10 th  largest exporter, accounting for 2.5% of world exports during 2017-21. It has  been India's  position  that  IMF  may  extend  its  work  towards  developing  possible  new criteria that would broaden the SDR basket.

(d): Steps taken by RBI to integrate Indian Payment System with other jurisdictions inter alia include:

- i. Global outreach of India's Payment Products viz. Unified Payments Interface (UPI) and RuPay to enhance cross-border transactions between India and other countries.
- ii. Cross-border linkage between Fast Payment Systems of India and Singapore, viz. UPI and PayNow was launched in February 2023.
- iii. Funds held in bank accounts or e-wallets can be transferred to / from India using just the  UPI-Id,  mobile  number,  or  Virtual  Payment Address (VPA).  Acceptance  of  UPI through  QR  codes  has  been  enabled  in  Bhutan,  Singapore,  and  the  UAE.  Indian tourists  travelling  to  these  countries  can  use  their  UPI  Apps  to  make  payment  at merchant sites.
- iv. Acceptance  of  Global  RuPay  co-badged  cards  has  been  enabled  in  across  200+ countries  through  co-badging  arrangements  with  few  international  card  schemes. Network  to network bilateral  arrangements  have  also  been  made  to  enable acceptance of Domestic RuPay cards in Bhutan, Singapore, and the UAE.  Issuance of RuPay cards through banks is live in Bhutan.
- v. Recently, RBI and the Central Bank of the UAE (CBUAE) have signed an MoU for cooperation for interlinking their payment systems. Under this MoU, inter alia, the two central banks agreed to cooperate on linking their Fast Payment Systems - Unified Payments Interface (UPI) of India with Instant Payment Platform (IPP) of UAE; and linking the respective Card Switches (RuPay switch and UAESWITCH).

.