Non-resident Indians (NRIs) will soon be able to pay utility bills and other recurring payments such as fees using the Bharat Bill Payment System (BBPS), the Reserve Bank announced Friday.
The RBI made it clear that the move is not driven by the need to attract more remittances at a time when domestic currencies are under pressure, nor is it the result of its efforts to narrow the spreads banks make when converting currencies. minimalize.
The Bharat Bill Payment System (BBPS) is an interoperable platform for standardized bill payments. More than 20,000 invoices are part of the system and more than 8 crore transactions are processed monthly.
RBI Governor Shaktikanta Das said BBPS has transformed the payment experience for users in India and is now proposing to enable the system to accept cross-border inbound bill payments.
“This will enable non-resident Indians (NRIs) to pay bills for utilities, education and other such payments on behalf of their families in India. This will especially benefit seniors,” he said, announcing the bimonthly announcement. Monetary policy.
In a statement, the RBI said the decision will also favor the payment of bills of every biller on board the BBPS platform in an interoperable manner.
The central bank will shortly issue the necessary instructions in this regard.
“The margins were definitely not what came to mind when this was introduced. This was essentially a convenience measure for NRAs and their relatives who stayed here,” Deputy Governor T Rabi Shankar later told reporters.
Meanwhile, Shankar also said that the RBI has received some requests from lenders to open Nostro accounts in light of current developments.
The governor also announced a committee to study the possibility of an alternative benchmark for Mumbai Interbank Outright Rate (MIBOR) based overnight indexed swap contracts (OIS), the most widely used interest rate derivatives (IRDs) in the onshore market.
The use of MIBOR-based derivative contracts has increased with the steps the Reserve Bank has taken to diversify its membership base and facilitate the introduction of new IRD instruments.
At the same time, the MIBOR benchmark rate, calculated on the basis of overnight trades executed on the NDS call platform in the first hour after market opening, is based on a narrow transaction window, the central bank said.
Internationally, there has been a shift towards alternative benchmark rates with a broader participant base (outside banks) and higher liquidity.
“Amid these developments, it is proposed that a committee be set up to conduct an in-depth investigation into the issues, including the need to move to an alternative benchmark, and propose the most appropriate way forward,” it said. the.
The RBI has also decided that standalone Primary Dealers (SPDs), who are also market makers such as banks, may also trade in Foreign Currency Settled Overnight Indexed Swap (FCS-OIS) directly with non-residents and other market makers.
In February of this year, banks in India were allowed to transact in the offshore FCS-OIS market with non-residents and other market makers.
This was allowed to remove the segmentation between onshore and offshore OIS markets and improve the efficiency of price discovery.
Meanwhile, Das reiterated that most digital loan fraud occurs in the case of non-regulatory apps, adding that the RBI will soon issue guidelines for such entities.
The RBI’s top management also said it has nothing against the current regulations of the rating agency under Sebi, but is acting to ensure there is no risk to the bank’s balance sheets as a result of their actions. PTI AA BALL BAL