NRIs will be able to use UPI with international phone numbers & NRE/NRO accounts

On January 10, the National Payments Corporation of India (NPCI) announced that soon Non-Resident External (NRE) and Non-Resident Ordinary (NRO) account holders with international mobile numbers linked to their accounts would be able to use Unified Payments Interface (UPI). Initially, the service will be available for NRIs from Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the USA, Saudi Arabia, United Arab Emirates, and the United Kingdom.

Notably, NRIs have requested the Government of India to allow UPI services on their Indian bank accounts linked to their international mobile numbers on several occasions and the issue was raised many times on social media platforms. The decision came at a time when India is celebrating its 17th Pravasi Bharatiya Diwas, an event dedicated to the Indian Diaspora living abroad.

As per reports, NPCI has instructed members of the UPI ecosystem to allow NRE/NRO accounts with international mobile numbers to register on UPI. So far, the service was only available for accounts with Indian numbers (+91) linked to them.

Notably, NCPI has specifically instructed the member banks to ensure such accounts are allowed as per the regulations set by Foreign Exchange Management Act (FEMA). They have to follow the guidelines issued by the Reserve Bank of India (RBI) from time to time. That means there will be a set of regulations that NRIs have to follow while using the UPI ecosystem. NPCI has asked the members to comply with directions by April 30, 2023. The services may start in May this year, however, the exact dates have not been announced yet.

Furthermore, it will be the remitter and beneficiary banks’ responsibility to ensure the regulations and guidelines to combat money laundering, financing terrorism, and compliance validation are in place.

From time to time, NRIs have raised the issue with the Government of India and asked to allow them to use UPI with international numbers linked to NRE/NRO accounts. On January 6, replying to a Twitter post, Dr Deepak Megeri, a UK-based Indian Psychiatrist, said that it was unfortunate that NRIs did not have the luxury to use the UPI payment system as it does not work with NRE/NRO accounts. “We must keep drawing the cash as most shops do not use card machines,” he wrote.

Dr Deepak Megeri was replying to a tweet by Moneycontrol editor Chandra R. Srikanth, where she had said it amazes her that she can now pay for everything in India with just a phone.

Tarak Allamsetty, on January 6, had mentioned he could not use UPI as his NRE account was linked to the Canadian phone number.

Last year on January 2, Tarun Agarwal wrote, “NPCI BHIM, please permit UPI payments via NRE accounts at least. We have to use cash to do transactions while coming to India if I honestly follow FCRA rules for not keeping a domestic bank account.”

Speaking to OpIndia, Nilay Singh, an NRI from Germany, said, “It is a great initiative by NPCI. I hope they will soon allow NRIs from other countries to join the cashless movement. The other day, we were discussing the issue on Twitter, and it is exciting to see how government listens to the requests.”

New records in UPI payments

In December 2022, payments via UPI touched a record high of Rs 12.82 lakh crore. A total of above 782 crore transactions were done in a single month on the platform. In November, 730.9 crore transactions were recorded worth Rs 11.90 lakh crore.

NRE and NRO accounts

NRE account stands for Non-Resident External Account. NRIs use it to transfer money to India from Abroad. The money transferred in these accounts is non-taxable. NRO account stands for Non-Resident Ordinary Account. NRIs use it to manage the income earned in India. The money in this type of account is taxable.

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