World News Today: International News Headlines - The Hindu | The Hindu
· collected 2026-09-05 · by Srinivasan Ramani
The BRICS countries, which include India, Brazil, Russia, China, and South Africa, are discussing ways to facilitate cross-border payments at their upcoming summit in New Delhi. According to a report, the current system of sending money across borders requires multiple intermediaries and involves high fees, with foreign exchange margins ranging from 2.5% to 20%. Finance ministries and central bank representatives met in Jaipur last month to discuss financial cooperation, including linking digital payment systems and central bank digital currencies (CBDCs). The BRICS countries aim to reduce reliance on intermediaries like correspondent banks, which can charge high fees and take days to process transactions.
Written by the local model on 2026-09-06,
using this article's own text rather than the other coverage of the
same event.
The 18th BRICS summit in New Delhi to be held in September, with India as the Chair, is expected to push for mechanisms to facilitate cross-border payments between members, including links between digital payment systems and central bank digital currencies (CBDCs), according to a report in The Hindu businessLine.
uncertain
summit → hold → businessLine
Ahead of the summit, finance ministries’ and central bank representatives from BRICS countries met in Jaipur on August 12-13 to discuss financial cooperation, payments, and the wider use of national currencies in settling trade between members.
asserted
representatives → meet → members
How do current cross-border payments work?
Sending money from one country to another requires a chain of transactions.
asserted
Sending → work → transactions
Let’s say, an importer in Cape Town is buying passenger cars from an exporter in Chennai.
asserted
importer → say → Chennai
The payment does not travel directly from the South African bank to the Indian one.
asserted
payment → travel → one
It travels via a series of intermediaries called correspondent banks that hold accounts with each other.
asserted
that → travel → other
Since the South African bank does not hold an account with the Indian one (and vice versa), the payment is routed through a larger international bank that deals with both and is typically headquartered in London or New York.
asserted
that → hold → London
Because very few banks hold both rupees and rand, the payment involves converting rand to dollars and dollars to rupees where, in essence, the dollar acts like a vehicle currency, even though no American is involved in the trade.
asserted
American → hold → trade
Now, apart from the money, there are also instructions that travel between the banks.
asserted
that → be → banks
This is handled by SWIFT (Society for Worldwide Interbank Financial Telecommunication), which is a Belgium-based cooperative and overseen by the National Bank of Belgium along with the G-10 central banks, including the U.S. Federal Reserve.
asserted
which → handle → Reserve
It enables institutions to exchange payment instructions through it and settle amounts separately.
asserted
It → enable → amounts
It is used directly by more than 11,000 institutions in over 200 countries.
asserted
It → use → countries
Smaller banks reach it indirectly through larger banks that are part of the SWIFT network, which is why it has become crucial and hard to displace.
asserted
it → reach → network
Every intermediary charges a fee and the currencies are converted twice (rand to dollar and dollar to rupees).
asserted
currencies → charge → rupees
So the foreign exchange margins are paid twice.
asserted
margins → pay → ?
A 2019 BRICS survey of cross-border payment systems, conducted by Brazil, found that Brazilian respondents reported foreign exchange margins of 2.5% with the figure rising to 8.5% for payments in Africa and, in some cases, as high as 20%.
asserted
figure → conduct → %
While speed of transactions used to be a major issue, SWIFT claims that its SWIFT Global Payments Innovation has helped reduce transaction times significantly.
uncertain
Innovation → use → times
Some structural delays remain even as the transaction chain has also become thinner.
asserted
chain → remain → ?
The Bank for International Settlements (BIS) found that active correspondent banking relationships fell by 20% between 2011 and 2018 with regional declines varying from 12% to 30% and Latin America being the worst affected.
asserted
America → find → %
Payment volumes kept growing during this period, even as they travelled through a smaller network.
asserted
they → grow → network
Why does BRICS want to change this system?
asserted
BRICS → want → system
For developing economies, though, payments in a handful of dominant currencies such as the U.S. dollar, the euro and the Japanese yen expose countries to the monetary policies of the countries that issue them.
asserted
that → develop → them
The 2024 BRICS report under Russia’s chairmanship argued that this part of the financial system is monopolised by a single institution, raising transaction costs.
asserted
part → argue → costs
Alternatives to the system suffer from the fact that they have to convince a large number of banks and regulators to join before being useful.
asserted
they → suffer → banks
A bank that uses an alternative system to deal with sanctioned entities — several Russian banks were cut off from SWIFT in 2022, following Russia’s invasion of Ukraine — also risks sanctions, which deters others from joining.
asserted
which → use → others
A sanctions-hit Russia has pushed hardest for an alternative and is also the reason why others are wary of joining one.
asserted
others → hit → one
What changes can be envisaged in the BRICS discussions?
asserted
changes → envisage → discussions
The idea being explored is a payment system where, instead of payments moving through several correspondent banks with dollar conversions, national payment systems would connect to each other directly.
asserted
systems → explore → other
This could be done in pairs as India and Singapore have already done for remittances by linking the former’s Unified Payments Interface (UPI) and the latter’s PayNow systems.
uncertain
India → do → Interface
But building bilateral systems individually will not scale appropriately.
asserted
building → build → systems
An alternative could be via a shared hub that each country joins.
uncertain
country → share → that
One such effort is Project Nexus, designed by the BIS and handed over to a company set up by six central banks, including India’s Reserve Bank of India.
asserted
effort → design → India
It is set to go live only in 2027.
asserted
It → set → 2027
The BRICS discussions would extend this idea to the use of central bank digital currencies.
asserted
discussions → extend → currencies
Here, central banks issue digital versions of their currencies for use between banks — a settlement asset, not the retail digital rupee held by individuals — and exchange them on a common platform.
asserted
banks → issue → platform
Both legs of a currency swap would occur at the same instant or not at all, removing the risk of paying out before the other side pays, which speeds up settlement and reduces the capital banks must set aside against such transactions.
asserted
banks → occur → transactions
The 2024 BRICS report claims transactions settled this way would yield significant cost savings.
uncertain
transactions → claim → savings
Only one such platform runs today – mBridge, built by the BIS with the central banks of China, Thailand, Hong Kong, and the UAE, which the BIS handed to its participants and left in October 2024.
asserted
BIS → run → October
Over 95% of its settlement volume is in China’s digital yuan, according to People’s Bank of China figures reported by Reuters.
uncertain
% → accord → Reuters
The Kazan declaration of BRICS in 2024 agreed to “discuss and study the feasibility” of an independent settlement system called BRICS Clear, but the Rio declaration the following year did not mention it.
asserted
declaration → agree → it
…and 5 more, not listed.
