Active Stocks
Thu Mar 28 2024 15:29:53
  1. Tata Steel share price
  2. 156.45 2.36%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,446.50 0.40%
  1. ITC share price
  2. 428.30 0.07%
  1. Power Grid Corporation Of India share price
  2. 277.15 2.25%
Business News/ News / India/  RBI slashes minimum net-worth requirement to set up non-bank Bharat Bill Payment
BackBack

RBI slashes minimum net-worth requirement to set up non-bank Bharat Bill Payment

In his monetary policy announcement, RBI Governor Shaktikanta Das said that the Bharat Bill Payment System had noticed an increase in the volume of bill payments and the number of billers over the years.

FILE PHOTO: The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016. REUTERS/Danish Siddiqui (REUTERS)Premium
FILE PHOTO: The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016. REUTERS/Danish Siddiqui (REUTERS)

Non-banking companies now need 25 crore minimum net worth to set up Bharat Bill Payment Operating Units (BBPOU), the Reserve Bank of India (RBI) informed on May 26. The minimum net-worth criterion for non-bank firms has been lowered from the earlier minimum net worth requirement of 100 crore. This means that developing a payment app will be easier now, and businesses like Phonepe, Google Pay and Paytm will face increased competition.

The Bharat Bill Payment System (BBPS) is an interoperable bill payment network, of which scope and coverage includes all types of billers who issue recurring bills.

“As announced in the Statement on Development and Regulatory Policies dated April 08, 2022, the minimum net-worth requirement for non-bank Bharat Bill Payment Operating Units (BBPOUs) stands reduced to 25 crore. The BBPS guidelines have been suitably amended," RBI said in a circular.

“This circular is issued under Section 10 (2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), and shall come into effect immediately," RBI added.

RBI Governor Shaktikanta Das stated in his monetary policy announcement that BBPS had noticed a rise in the amount of bill payments and the number of billers over the years.

"To further facilitate greater penetration of bill payments through the BBPS and to encourage participation of a greater number of non-bank Bharat Bill Payment Operating Units in the BBPS, it is proposed to reduce the net worth requirement of such entities from 100 crore to 25 crore." read the announcement.

Users of BBPS enjoy benefits like standardised bill payment experience, centralised customer grievance redressal mechanism and prescribed customer convenience fee.

The reduction in net-worth requirements follows an announcement regarding the same by the central bank in April.

The RBI had said while BBPS has seen an increase in the volume of transactions as well as number of onboarded billers, it is observed that there has not been a corresponding growth in the number of non-bank BBPOUs.

The requirement of 100 crore net worth for a non-bank BBPOU to obtain authorisation was viewed as a constraint to greater participation, it had said.

To increase participation, the RBI had decided to align the net worth requirement of non-bank BBPOUs with that of other non–bank participants which handle customer funds (like payment aggregators) and have a similar risk profile.

(With agency inputs)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Sounak Mukhopadhyay
Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and sports. Before working with digital news publications, he worked as a freelance content writer.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 27 May 2022, 08:54 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App