RBI, State Bank of Vietnam ink MoU to promote financial innovation

• The Reserve Bank of India (RBI) and the State Bank of Vietnam signed a Memorandum of Understanding (MoU) to promote cooperation in financial innovation and digital payments, including information sharing, regulatory coordination, and payment system connectivity for cross-border QR code-based merchant payments.

• The MoU marks a forward-looking and substantive step towards strengthening bilateral cooperation, with potential to enhance cross-border payment linkages and position India as a major fintech hub.

Highlights of the MoU:

• It is intended to provide a broad framework for collaboration, information exchange and implementation support, to the extent permitted by the applicable laws, rules and regulations governing the two Parties.

• The scope of cooperation under the MoU covers information sharing on emerging market trends and developments, standards and best practices in digital payments and innovative technologies, regulatory frameworks pertaining to innovations, and the development and oversight of digital payments in financial services. 

• It provides for potential joint programmes and projects, including payment system connectivity for cross-border QR code-based merchant payments between India and Vietnam.

• The MoU is expected to enable greater efficiency in processing of cross-border transactions between two countries and make these transactions a transparent (upfront display of charges), convenient, real-time manner, and more cost-efficient. 

• It essentially envisages a mechanism for cooperation and information exchange in the area of fast payment systems, messaging systems and card switches.