MUMBAI/NEW DELHI, March 28 (Reuters) - India is asking

the Financial Action Task Force (FATF), a global

money-laundering watchdog, to reduce compliance requirements for

cross-border payments made through its homegrown system, several

sources familiar with the discussions said.

Launched in 2016, the Unified Payment Interface (UPI)

accounted for 83% of India's digital payments volume in 2024, up

from 34% in 2019, and dominates the domestic retail payments

sector.

The government now wants to increase the use of its own

payments network by Indians travelling abroad, which could

potentially tap into a growing market, and make the global

cross-border payments market more competitive.

But its expansion for cross-border payments has been

hampered by compliance requirements on smaller payments, to

which payments made via networks such as Visa, Mastercard ( MA )

, and SWIFT are not subject, the sources said.

Government officials raised the issue at an FATF

conference in Mumbai this week, two of the sources said,

declining to be named because they are not authorised to speak

to media.

The FATF, India's central bank and the federal finance

ministry did not immediately respond to emails seeking comment.

Visa and Mastercard ( MA ) did not respond to requests for comment.

A final decision would depend on achieving a consensus among

FATF member countries after the public consultation period, a

third source familiar with the discussions said.

A public consultation on the FATF's "travel rule", which

requires financial institutions to collect, hold, and transmit

information about the sender and receiver of cross-border

payments, is open until April 18.

In their current form, global anti-money laundering

rules tend to favour both card networks and payments facilitated

by the SWIFT payment system, the three sources said.

Central Bank Governor Sanjay Malhotra told the FATF

gathering that "it would be desirable to make the (FATF's)

travel rule technology-neutral," without specific mention of

UPI.

India has so far inked deals with seven nations, including

France and Singapore, which allow merchants to accept payments

via the UPI.

($1 = 85.6175 Indian rupees)