On May 4, 2023, under India’s G20 presidency, the Reserve Bank of India (RBI) and the BIS Innovation Hub (BISIH) of the Bank for International Settlements (BIS) jointly launched G20 TechSprint 2023, the 4th edition of the global technology hackathon for innovators to promote innovative solutions aimed at ‘Transforming cross-border payments’.
- The competition is open to developers from around the world for submitting applications from May 4, 2023, to June 4, 2023, and it will conclude in Q3 2023 (i.e. around August/ September 2023).
- Objective: To showcase how technology solutions could address illicit financing risks, provide settlement solutions in other currencies and achieve interoperability in multi-lateral Central Bank Digital Currency (CBDC) platforms.
Three Problem Statements:
The 2023 TechSprint will focus on three problem statements on cross-border payments.
- The first one was Anti Money Laundering (AML)/CFT (Combating the Financing of Terrorism)/Sanctions technology solutions to reduce illicit finance risk.
- Second aspect was covering Foreign exchange (FX) and liquidity technology solutions to enable settlement in emerging markets and developing economy (EMDE) currencies.
- Final statement deals with the technology solutions for multilateral cross-border CBDC platforms.
Note – The three problem statements were developed in consultation with the G20 members.
Process of Competition:
i.The participants who are registering for the G20 TechSprit 2023 will submit technological solutions to one or more problem statements.
ii.The Shortlisted teams will be invited to develop their solutions over a six-week period and each team will be eligible for a stipend of Rs 8 lakh (~ USD 10,000).
iii.An independent panel of experts will select the most promising solution to each problem statement from the shortlisted solutions, to be announced at a final event in August/ September 2023.
iv.The winners for each problem statement will receive an award of Rs 40 lakh (~USD 50,000).
Additional info: The previous three successful editions of the TechSprint are conducted in 2020, 2021, and 2022 in the areas of regulatory compliance (RegTech) and supervision (SupTech), Green and Sustainable finance, and CBDCs.
RBI’s Statement
As per the statement of RBI, economic linkages, economic cooperation and economic activities across borders become easier when payments across borders become efficient.
It also added that payments should be able to flow seamlessly across borders and between payment systems to promote competition while preserving financial integrity.
-RBI updates KYC instructions on wire transfers
On May 4, 2023, RBI updated its instructions in the Master Direction (MD) on Know Your Customer (KYC) related to wire transfers and also aligned the same with the relevant recommendation of the Financial Action Task Force (FATF).
- Through the amendment, RBI mandates all banks, and financial institutions in the country to ensure all wire transfers such as domestic as well as international contain complete information about the originator and beneficiary to prevent them from being used as a channel for money laundering, and terrorist financing platforms.
Key Updates over wire transfers:
i.In case of domestic wire transfer, where the originator is an account holder of the ordering RE (Regulated Entities), the transfer should be accompanied by the originator and beneficiary information, as indicated for cross-border wire transfers.
ii.Domestic wire transfers of Rs 50,000 and above, where the originator is not an account holder of the ordering RE, should also be accompanied by the originator and beneficiary information as indicated for cross-border wire transfers.
- Note – ‘Ordering RE’ refers to the financial institution which initiates the wire transfer and transfers the funds on behalf of the originator.
iii.RBI has directed the REs to make available all the information on the wire transfers to appropriate law enforcement and/or prosecutorial authorities as well as FIU-IND (Financial Intelligence Unit – India) on receiving such requests with appropriate legal provisions.
- Note – The wire transfer instructions are not intended to cover any transaction carried out using a credit card/debit card / Prepaid Payment Instrument (PPI) for the purchase of goods or services.
About Reserve Bank of India (RBI):
Governor– Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar
Headquarters – Mumbai, Maharashtra
Establishment – 1st April 1935
