Non-resident Indians (NRIs) will now be able to access Unified Payments Interface (UPI) using their international mobile numbers. The National Payments Corporation of India (NPCI) has allowed NRIs living in 10 countries to use UPI using their international mobile numbers for bank accounts which are classified as Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts. This move will eliminate the maintenance cost of keeping an Indian mobile number active for NRIs.
Previously, NRIs needed to have a valid Indian mobile number to set up a UPI ID for any application. When a user activates UPI from an application, the app sends an SMS from the number confirming that the mobile number is linked to the bank account. So, those who moved overseas had to keep their Indian mobile numbers active, if they wanted to use UPI in India. It would come with the cost of maintaining the phone number and paying an amount to recharge it every month.
During the first phase of the roll-out, UPI can be used by NRI mobile numbers having country codes of Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates, and the United Kingdom, as per an NPCI circular released on January 10, 2023.
Mobile numbers of NRIs must be linked with NRO or NRE accounts to activate UPI with international mobile numbers. Moreover, the NRE or NRO accounts should be Know your Customer or KYC compliant to activate UPI. The member bank where the customer has an NRE or NRO account must ensure that the required KYC is done and other necessary regulations including the Foreign Exchange Management Act or FEMA are followed, NPCI said earlier.
"The onus of compliance will rest with the respective banks. Member banks must ensure NRE or NRO accounts are only allowed as per the extant FEMA (Foreign Exchange Management Act) regulations and adherence to the guidelines/instructions issued by the concerned regulatory departments of the Reserve Bank of India (RBI) from time to time," according to NPCI circular released earlier.
All necessary anti-money laundering (AML)/combating of financing of terrorism (CFT) checks and compliance validation/account level validations as per the extant rules applicable under the regulatory guidelines shall be the responsibility of the remitter/beneficiary banks.NPCI has asked all the members to comply with this directive by April 30, 2023.
The major convenience factor would be in the form of 'payment or money transfer convenience' for NRIs when they visit India and can pay easily across millions of Indian merchants accepting UPI, thus, now they can do away with the use of their expensive international cards. This will not only help NRIs use UPI when they travel to India but when UPI comes to merchants in the country of their residence they can start making instant transfers. NRIs will just need to link their NRE and NRO accounts linked to their international SIM to UPI and use it like any other Indian UPI user for merchant payment as well as peer-to-peer payments.
To sum up, the National Payments Corporation of India (NPCI) has made a significant move by allowing Non-Resident Indians (NRIs) living in 10 countries to use the Unified Payments Interface (UPI) using their international mobile numbers for their Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts. This move will eliminate the maintenance cost of keeping an Indian mobile number active for NRIs and provide a lot of convenience for them in terms of payment and money transfer.
However, it is essential to note that the mobile numbers of NRIs must be linked with NRO or NRE accounts to activate UPI with international mobile numbers, and the NRE or NRO accounts should be Know your Customer (KYC) compliant to activate UPI. The member bank where the customer has an NRE or NRO account must ensure that the required KYC is done and other necessary regulations including the Foreign Exchange Management Act (FEMA) are followed.
Overall, this move by NPCI will be beneficial for NRIs as it will allow them to use UPI when they travel to India and pay easily across millions of Indian merchants accepting UPI. Additionally, when UPI comes to merchants in the country of their residence, they can start making instant transfers. NRIs will just need to link their NRE and NRO accounts linked to their international SIM to UPI and use it like any other Indian UPI user for merchant payment as well as peer-to-peer payments.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global services.
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