The two countries will also seek to link their payments messaging systems to facilitate bilateral financial messaging, the RBI said. The UAESWITCH provides regional and international connectivity with other similar national systems. The Central Bank of the UAE introduced UAESWITCH in 1996 to link the automated teller machine (ATM) network of all banks in the UAE. The agreement will also explore linking their respective Card Switches (RuPay switch and UAESWITCH) for mutual acceptance of domestic cards and processing of card transactions. Such arrangements typically lower the cost of payments. The two countries also agreed to co-operate on linking their fast payment systems – India’s Unified Payments Interface with the UAE’s Instant Payment Platform – to ease cross-border money transfers. Use of local currencies help to optimise transaction costs and settlement time for transactions, including for remittances from Indians residing in the UAE, it said. This arrangement would promote investments and remittances between the countries, the regulator said. India could make its first rupee payment for UAE oil to Abu Dhabi National Oil Company, Reuters reported on Friday. “Creation of the LCSS would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an INR-AED foreign exchange market.” “The agreement covers all current account transactions and permitted capital account transactions,” it said.
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