FX-Retail platform to be linked to NPCI Bharat Connect: Easy access through bank, non-bank payment apps

The Reserve Bank of India (RBI) has proposed to link to the FX-Retail platform with Bharat Connect platform of National Payments Corporation of India (NPCI). According to RBI Statement on Developmental and Regulatory Policies, "With the objective of bringing greater transparency and fairness in the pricing of foreign exchange for users, especially for individuals and the Micro, Small and Medium Enterprises, the Clearing Corporation of India Limited (CCIL) launched the FX-Retail platform in 2019. Presently, the FX-Retail platform is accessible through an internet-based application. To expand the reach of FX-Retail platform and enhance user experience, it is proposed to facilitate the linking of the FX-Retail platform with Bharat Connect (earlier known as Bharat Bill Payment System) operated by the NPCI Bharat Connect."

"The linkage will enable users to register and transact on the FX-Retail platform through the apps of banks (mobile applications, internet banking etc.) and non-bank payment system providers, which are integrated with Bharat Connect," the central bank mentioned.

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This will expand reach of FX-Retail platform, enhance user experience and promote fairness and transparency in pricing with adequate safeguards, said RBI Governor Shaktikanta Das while announcing the decisions of the December Monetary Policy.

What is FX-Retail?

Developed by the Clearing Corporation of India Ltd (CCIL), FX-Retail is an electronic trading platform for foreign exchange. It is a web based order matching trading platform for buying/selling foreign exchange by retail customers of banks — individuals, corporates, trusts, cooperative banks, foreign portfolio investors, foreign institutional investors etc.)

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How FX-Retail helps customers

The Reserve Bank of India created FX-Retail to promote fair and competitive rates for customers. The platform allows customers to:
i) Engage in long or short positions
ii) Do so without demonstrating an underlying exposure
iii) Purchase or sell USDINR
iv) Deal in USD/INR Cash, Tom, Spot, and Forward instruments

The objective of the platform is to be a one stop solution for the customers to execute all their Forex requirements in USD/INR currency pair through an electronic mode. The platform is one of its kind electronic trading platform which provides for anonymous trading and facilitates automatic price discovery in addition to other qualitative benefits.

According to the IndusInd Bank website, "Retail customers can deal on the platform with real time access to current rates, thus moving from phone based trading to electronic trading. The platform provides for transparency and better pricing to the customers."

FX-Retail to be linked to Bharat Connect: How will it be rolled out

According to the RBI regulatory statement on December 6, 2024, "In the first phase, it is proposed to implement a pilot facilitating purchase of US Dollar against the Rupee by individuals and sole proprietors. Going forward, the scope will be expanded to cover other FX transactions including sale of US Dollar against the Rupee and other categories of users."

Users will get the option to directly access the FX-Retail platform and conduct transactions under the existing framework.

Detailed operational guidelines for banks regarding the pilot will be disseminated separately.