TLDR
- BRICS nations are considering linking fast payment systems and CBDCs to lower cross-border transaction costs.
- RBI Governor Sanjay Malhotra said discussions remain at an early stage with several options under review.
- India plans to promote the rupee and local currencies for cross-border trade and payments.
- Technical, regulatory, and governance issues must be addressed before any BRICS payment links are implemented.
- The RBI also urged Indian banks to strengthen AI governance while balancing innovation with financial system safety.
BRICS nations are discussing ways to connect their fast payment systems and central bank digital currencies as members seek to reduce the cost of cross-border transactions.
Reserve Bank of India Governor Sanjay Malhotra said the discussions include possible links between fast payment networks and central bank digital currencies, although no final framework has been agreed.
Speaking in Mumbai on Tuesday, Malhotra said “various options are on the table” as BRICS members examine ways to improve cross-border payments. The discussions come as India prepares to host the 2026 BRICS summit.
BRICS Explores Fast Payment and CBDC Links
The proposed links could connect national payment systems and digital currencies used by BRICS members. The group includes Brazil, Russia, India, China and South Africa, along with other member countries.
Malhotra said cross-border payments remain an area of interest because there is room to reduce transaction costs. He added that CBDCs and connections between fast payment systems remain at the discussion stage.
India has previously recommended that links between BRICS CBDCs be included in the agenda for the 2026 summit. The proposal could involve payment networks such as India’s UPI and other national systems used by BRICS economies.
Any connection would require participating countries to agree on technical standards, regulatory rules and governance arrangements. The discussions have not yet produced a final system or implementation timeline.
India Pushes Rupee and Local Currency Payments
The RBI will continue efforts to increase the international use of the Indian rupee, Malhotra said. The central bank also plans to promote the use of local currencies for cross-border trade and payments.
Greater use of local currencies could provide another option for businesses conducting transactions between BRICS economies. The proposed payment links could support those efforts by making transfers between participating countries more direct.
The development comes as BRICS members examine ways to improve cross-border payment infrastructure. Currency swap arrangements and other supporting mechanisms could also be needed if such systems are expanded across multiple countries.
RBI Calls for Stronger AI Governance in Banks
Malhotra also addressed the use of artificial intelligence in India’s banking sector. He said banks should treat AI as a capability that can be used while maintaining appropriate safeguards.
“Indian banks cannot afford to sit on the sidelines and watch,” Malhotra said, urging lenders to identify and record the AI models being used across their operations.
The RBI governor also called for board-approved AI governance policies at banks. The approach would cover the use of AI while addressing operational, cybersecurity and governance risks linked to the technology.
Malhotra said “innovation and safety are not opposing goals” and described both as requirements for a durable financial system. Central banks and financial regulators have been examining how banks use AI as adoption increases across financial services.
The BRICS payment discussions remain at an early stage, with CBDCs and fast payment system links among the options being considered. India is expected to continue discussions on cross-border payments, local currencies and the international use of the rupee during its 2026 BRICS presidency.
