The Bharat Bill Payment System (BBPS) will soon be enabled to accept cross-border inward payments in India. The Reserve Bank of India (RBI) governor Shaktikanta Das announced along with other decisions of the monetary policy committee (MPC), including a repo rate hike by 50 basis points, on Friday.
"This will enable Non-Resident Indians (NRIs) to undertake bill payments for utility, education and other such payments on behalf of their families in India," Das said.
The announcement is being seen as a way to deepen the cross-border payment ecosystem in India. "BBPS change facilitating NRIs to make payments of bills in India, should not be looked at independently, but should be looked at as a broader trend of deepening the cross border payment ecosystem," Vivek Iyer, Partner, Financial Services-Risk at Grant Thornton Bharat said.
BBPS, under the aegis of the RBI, allows recurring utility bill payments through an integrated platform. It is operated by the National Payments Corporation of India (NPCI). The RBI has been making efforts to enable cross-border payments through its United Payments Interface (UPI). NPCI had earlier announced that they are working to link UPI with Singapore's PayNow to allow cross-border payments, including remittances.
Das also said that the new system would benefit senior citizens in particular. NRIs will be able to pay the utility bills of their parents, relatives or friends in India from their country of residence.
"It is essential to comprehend and recognise that NRIs contribute significantly to the management of billers on behalf of their family members in India," said Dileep Seinberg, founder & CEO of bill payment and utility crypto platform MuffinPay, "This modification will make the process seamless and effective for everyone."
However, the announcement is unlikely to have an impact on the forex reserves of India.
"This shall be an additional enabler to widen the scope and ease of access of the payment systems," Anil Gupta, vice president, group head-Financial Sector Ratings at Icra, said, "[It] shall not be a material enhancer or inhibitor for forex inflows or fee income as a whole for various market participants," he added.