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Wednesday, January 25, 2023

NPCI issues directions on NRIs’ use of UPI with their intl phone numbers linked to NRE/NRO accounts

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The National Payments Corporation of India (NPCI) said  Non-Resident External (NRE) and Non-Resident Ordinary (NRO) account holders having overseas mobile numbers attached to their accounts will soon be allowed to access the Unified Payments Interface (UPI). Initially, NRIs from Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the United States, Saudi Arabia, the United Arab Emirates, and the United Kingdom would be allowed to use the service.

Notably, NRIs have repeatedly asked the Government of India to enable UPI services on their Indian bank accounts linked to their foreign mobile phones, and the topic has been discussed extensively on social media platforms. The decision comes as India celebrates its 17th Pravasi Bharatiya Diwas, a festival honouring the Indian Diaspora residing overseas.

According to sources, NPCI has directed UPI ecosystem members to enable NRE/NRO accounts with overseas mobile numbers to register on UPI. Until the service was only available for accounts with Indian phone numbers (+91).

Notably, NCPI has expressly urged member banks to verify that such accounts are permitted under the Foreign Exchange Management Act (FEMA). They must adhere to the Reserve Bank of India’s (RBI) requirements on a regular basis. This means that NRIs will be subject to a set of rules while accessing the UPI ecosystem. The NPCI has requested its members to follow the instructions by April 30, 2023.

The services may begin in May of this year, although no specific dates have been specified. Furthermore, it will be the duty of the remitter and beneficiary banks to guarantee that the rules and procedures for combating money laundering, funding terrorism, and compliance validation are in place.

NRIs have occasionally raised the matter with the Government of India, requesting that they be allowed to utilise UPI with overseas phones tied to NRE/NRO accounts. Dr Deepak Megeri, a UK-based Indian Psychiatrist, responded to a Twitter message on January 6 by saying that it was terrible that NRIs did not have the luxury of using the UPI payment system since it does not operate with NRE/NRO accounts.

“We must continue to draw cash because most establishments do not utilise card machines,” he added.

Dr. Deepak Megeri  stated that it surprises her that she can now pay for everything in India with just her phone.

Tarak Allamsetty stated on January 6 that he could not utilise UPI since his NRE account was tied to a Canadian phone number. Last year on January 2, Tarun Agarwal commented, “NPCI BHIM, please authorise UPI payments via NRE accounts at least. If I honestly follow FCRA requirements by not maintaining a local bank account, we must conduct transactions in cash while in India.”

Nilay Singh, an NRI from Germany, said, “It is a terrific move by NPCI. I hope they will soon let non-resident Indians (NRIs) from other countries to join the cashless movement. We were debating the subject on Twitter the other day, and it’s great to see how the government responds to the demands.”

Payments using UPI reached a record high of Rs 12.82 lakh crore in December 2022. In a single month, the platform processed over 782 crore transactions. In November, 730.9 crore transactions totaling Rs 11.90 lakh crore were registered. The term NRE account refers to a non-resident external account. NRIs utilise it to send money from outside to India. The funds transferred into these accounts are tax-free. NRO is an abbreviation for Non-Resident Ordinary Account. It is used by NRIs to manage their money received in India. The funds in this account are taxed.

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