Reserve Bank of India (RBI) Governor Sanjay Malhotra on 12 August said that BRICS nations are actively exploring linkages between their fast-payment systems and central bank digital currencies (CBDCs), as New Delhi prepares to host the BRICS 2026 summit in September. Malhotra made the remarks at the annual FIBAC conference in Mumbai, signalling that cross-border payment reform is emerging as a central financial agenda for the grouping.

What Is on the Table

The RBI Governor confirmed that 'various methods, various options are on the table, but it is still at the discussion stage, including CBDC and linkages of fast payment systems.' The emphasis is on reducing transaction costs and improving the speed of retail cross-border payments — areas where the current global infrastructure remains slow and expensive. BRICS, which includes Brazil, Russia, India, China, and South Africa among others, sees significant collective leverage in building an alternative payments corridor.

Rupee Internationalisation Push

Malhotra reaffirmed the RBI's broader drive to internationalise the Indian rupee and widen the use of local currencies in bilateral trade and settlements. India currently has local-currency settlement arrangements with Indonesia, the Maldives, Mauritius, and the UAE. The governor stressed that concrete steps to raise the volumes settled under these arrangements must now follow. This comes amid a wider global trend of de-dollarisation in trade finance, which BRICS nations have championed with varying degrees of commitment.

AI Governance Warning to Banks

Departing from payments policy, Malhotra urged Indian banks to treat artificial intelligence as a strategic capability rather than merely a compliance risk. 'Indian banks cannot afford to sit on the sidelines and watch,' he said, calling on lenders to take stock of all AI models currently deployed and to establish board-approved AI governance frameworks. The remarks reflect growing regulatory attention on how financial institutions manage algorithmic decision-making in credit, fraud detection, and customer service.

Geopolitical Risks and Banking Resilience

Malhotra acknowledged that geopolitical tensions — particularly the West Asia conflict — pose near-term risks to India's growth outlook through energy and commodity price volatility. However, he expressed confidence that policy measures such as energy supply diversification, ethanol blending, electric vehicle adoption, and new free trade agreements would strengthen the economy over the longer term. India's banking sector, he added, is well-positioned to absorb external shocks, backed by strong capital buffers, declining non-performing assets, and healthy profitability.

What Comes Next

The BRICS 2026 summit in New Delhi in September is expected to provide a higher-stakes platform for formalising the cross-border payments discussion. Whether the CBDC-linkage proposal moves from exploratory talks to a concrete pilot framework will likely depend on the degree of consensus among member nations — a grouping whose geopolitical alignments remain far from uniform. The RBI's parallel push on rupee internationalisation suggests India intends to use the summit to advance both multilateral and bilateral payment architecture.