February 20, 2024
PHNOM PENH – Cambodia and India are nearing the launch of cross-border QR services, a move aimed at further boosting economic ties, facilitating trade and investment and benefiting tourists.
The National Bank of Cambodia (NBC) and NPCI International Payments Limited (NIPL), a wholly-owned subsidiary of the National Payments Corporation of India (NPCI), signed a memorandum of understanding (MoU) to promote cross-border payments and remittances between the two countries.
The virtual signing ceremony was presided over by NBC governor Chea Serey and NIPL CEO Ritesh Shukla on March 17, 2023.
According to a press release from the central bank, the agreement aims to establish a collaborative framework which will enable the parties to explore and discuss various technical, commercial and operational aspects to develop digital connectivity and interoperability.
“The MoU signed between the two parties will provide greater benefits for citizens of both countries, enabling them to use formal channels for cross-border payments and remittances safely, conveniently and affordably,” stated the bank, Serey led a delegation to meet with senior officials of NPCI in Mumbai, India, on February 16, during which she urged the company to expedite the process for rolling out the system.
“The meeting was held to expedite the implementation of the cross-border settlement project between Cambodia and India, ensuring it is complete and comprehensive and reflects the readiness of both parties,” said the NBC.
During a workshop titled Financial Technology (Fintech) Development Policy for 2023-28, held in October in Phnom Penh, Serey highlighted the central bank’s introduction of the blockchain-based Bakong system, which facilitates seamless transactions between financial institutions via QR code and now serves over 10 million users.
Serey emphasised how fintech has strengthened the country’s banking sector, particularly through the introduction of a user-friendly, efficient and affordable digital payment system.
“[Bakong] has streamlined our domestic banking infrastructure and revolutionised international transactions,” she said.
She also noted that Cambodia has already established cross-border payment connections with Thailand, Laos and Vietnam.
“[Fintech] has made international remittances faster, more affordable and transparent, particularly benefiting Cambodians abroad,” Serey added.
Indian ambassador to Cambodia Devyani Khobragade stated at the launch of the Indian Business Chamber in Cambodia (IBCC) in late January that the two nations enjoy excellent political relations.
She emphasised that it was an opportune time to leverage this trust to boost business and investments, noting India’s status as one of the world’s fastest-growing economies.
“Trade and investment between our two countries have been a key priority for the Indian government, as evidenced by the steady growth in bilateral trade over the last four years. This is further supported by the ASEAN-India Free Trade Area [AIFTA]. Both countries’ commerce ministries have established a joint-working group, which held its first meeting in July 2022,” Khobragade stated.
“We are also exploring a bilateral investment and free trade agreement [FTA] and have recently exchanged the first draft of a double taxation agreement [DTA]. Additionally, we are collaborating with the NBC to promote cross-border payments,” she added.
According to the General Department of Customs and Excise (GDCE), bilateral trade between Cambodia and India has seen a steady increase, reaching nearly $485.70 million in 2023, a 10% rise compared to 2022.
The Kingdom’s exports to India grew by over 49% in 2023, amounting to more than $293 million, while total imports from India dropped by 20.85% to $440 million.
Data from the Ministry of Tourism showed that the country welcomed approximately 68,836 Indian tourists in 2023, an increase of more than 102% from 34,016 in the previous year.