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RBI Notifies Category-I Banks To Work On Cross Border Payment System Through Bharat Bill

The RBI has notified all category-I authorised dealer banks to implement the process for enabling Bharat Bill Payment System to process cross-border transactions

The Reserve Bank of India (RBI) on September 15, 2022 published a notification asking all category-I authorised dealer banks to work towards implementing the Bharat Bill Payment System (BBPS) for processing cross-border bill payments.

The use of BBPS for processing of cross-border bill payments was one of the key announcements made by the RBI during its monetary policy meeting (MPC), which concluded on August 5 last month. The RBI has now asked these banks to work on the rupee drawing arrangement (RDA), which has now been enabled for BBPS for cross-border payments.

RBI Governor Shaktikanta Das had said at that time that this move of enabling BBPS to process cross-border payments would benefit those senior citizens who were dependent on their children or family living overseas, for remittance, among others.

Sony A, general manager and CIO, South Indian Bank, told Outlook Money that entities such as exchange houses could now be onboarded through a bank in India which is a Bharat Bill Payment Operating Unit (BBPOU). Then, this mechanism could become useful for non-resident Indian (NRI) customers who want to make bill payments in their own country using front-end channels provided by permitted billing agents.
The RBI said in the circular that the foreign inward remittances received under RDA can be transferred to the ‘know your customer’ (KYC)-compliant beneficiary bank accounts through various electronic modes, such as NEFT, IMPS, and others.

What Is BBPS?

The RBI launched BBPS service on pilot testing back in August 31, 2016, and the live operations of BBPS started about a year later, on October 17, 2017.

The National Payments Corporation of India (NPCI) is the authorised entity for Bharat Bill Payment Central Unit (BBPCU), and it undertakes the clearing and settlement activities related to all transactions originating through the BBPS system.

According to data from the NPCI, in the month of August 2022, BBPS processed 87.46 million transactions valued at about Rs 16,000 crore. A year earlier, in August 2021, BBPS processed 58.88 million transactions worth about Rs 10,000 crore.

One of the primary benefits of BBPS service is that consumers can get instant confirmation of their bill paid via notification on SMS. Also, more than 20,000 billers are registered with BBPS.

In addition, BBPS has also evolved over the years to now include many utility companies for direct-to-home (D2H), fastag recharge, mutual fund purchase, school fees, hospital payments, and other payments.

There are also different modes of payment for BBPS, along with multiple payment channels, such as Internet, Netbanking, mobile banking, mobile wallet, automatic teller machines (ATMs), bank branches, agents, and others.

Also using BBPS at your own bank’s online front-end system will entail no charges, but if you want to use BBPS system at any physical outlet or a bank’s physical branch, then a convenience fee would be levied.
There has been a trend among consumers in India regarding the increased use of digital payment methods, such as unified payment interface (UPI ) and others.

According to a report published by GoKwik, an e-commerce enablement company on September 15, 2022, it was found out that in Q2 2022, 36.67 per cent of all e-commerce orders in India were made through UPI. According to a report published by ACI Worldwide in April 2022, India ranked the number one country globally with about 48.6 billion real-time payment transactions in 2021. 

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