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.
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)
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