The Reserve Bank of India (RBI) is contemplating mandating domestic processing of payment transactions in order to ring-fence the country’s domestic payment systems. This comes in light of the emerging geo-political risks, especially the Russia-Ukraine war.
In its Payments Vision Document released last week, the RBI said keeping in view the emerging geo-political risks, options would be explored to ring-fence domestic payment systems.
“After sanctions were imposed by the US on Russia due to its aggression against Ukraine, global card networks stopped processing transactions in Russia. Central banks globally have started making efforts to ring-fence their domestic payment systems. They are asking international card networks to connect to local national switches in their respective countries to process domestic transactions,” said