On the table: A SWIFT system tailored to push rupee trade

economictimes.indiatimes.com:

India is looking to set up its own international financing messaging system along the lines of SWIFT (Society for Worldwide Interbank Financial Telecommunications), the channel used worldwide to transfer funds and securities across borders. The proposal is a part of the government's bigger plan to internationalise the Indian currency, people aware of details told ET. The system will help settle bilateral trade in rupees.

An expert committee of bankers is exploring options and is expected to submit findings to the government by August, according to officials aware of the matter. The committee members are drawn from the State Bank of India, Bank of Baroda, Bank of India and Central Bank of India among others. «One of the suggestions was to have an independent financing messaging system that can be used with countries where we have bilateral trade agreements,» said a bank official who did not wish to be identified.

«This committee will now suggest measures on how to make this operational and what are the challenges. Accordingly, the issue will be taken up with other stakeholders, including the Reserve Bank of India (RBI).» Another official said the committee will look at the RBI's existing platform, the Structured Financial Messaging System, or SFMS.Indian financial network «We have to explore how we can scale this up,» he said. Built on the lines of SWIFT, the SFMS can be used for secure communications within and between banks.

In its 2022 Vision Document, the RBI also made a case for expanding the ambit of the SFMS. «The feasibility of providing membership/technology of Infinet to other jurisdictions shall be explored,» it noted. «Further, it shall be explored to expand the framework of SFMS to provide a domestic payment