Explained: How RBI Will Help NRIs Pay Bills

A month after proposing to enable BBPS to accept cross-border inward payments, the RBI has taken a step forward and done so recently. As per a circular by the central bank last week, it has been decided to allow foreign inward remittances received under the Rupee Drawing Arrangement (RDA) to be transferred to the KYC compliant bank account of the biller (beneficiary) through the Bharat Bill Payment System (BBPS), subject to certain conditions.

This step to allow acceptance of cross-border inward payments will facilitate Non-Resident Indians (NRIs) to undertake utility, education, and other bill payments on behalf of their families in India.

Simply put, unlike before when foreign inward remittances received under Rupee Drawing Arrangement (RDA) could be transferred to the KYC compliant beneficiary bank accounts through only electronic mode, such as, NEFT, and IMPS, this RBI move will allow direct bill payments in India through BBPS for NRIs and avoid unnecessary delays when they send money to their account in India to make such a payment.

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"Together, these initiatives have the potential to revolutionise the digital payments ecosystem and extend the reach of digital payments to many new users across India and abroad, helping in the journey of onboarding the next 300 million users to digital payments, said NPCI in a statement.

Federal Bank with UAE¡¯s Lulu Exchange will reportedly be the first to go live with Bharat BillPay Cross-Border Bill Payments.

This move by the RBI is also expected to benefit the payment of bills of any biller onboarded on the BBPS platform in an interoperable manner.

Bharat Bill Payment System (BBPS) is owned and operated by NPCI Bharat BillPay Ltd. (NBBL). It has transformed the bill payment experience in the country by offering an interoperable platform for standardised bill payment experiences, a centralised customer grievance redress mechanism, a uniform customer convenience fee, etc. As per RBI¡¯s circular last month, over 20,000 billers have been onboarded on the system and more than eight crore transactions are processed on a monthly basis. Unlike previously, when BBPS was accessible only to residents in India, now NRIs can benefit from it too.

Also, as per RBI, Rupee Drawing Arrangement (RDA) refers to a channel to receive cross-border remittances from overseas jurisdictions. Under this arrangement, the authorised banks enter into tie-ups with the non-resident exchange houses in the FATF (Financial Action Task Force) compliant countries to open and maintain their Vostro Account.

Also Read: RBI To Launch Digital Currency This Year

Conditions To Keep In Mind

As per RBI circular, certain conditions to be kept in mind while using this facility, are as follows:

1. The Recipient Bank will credit the amount transferred by the Partner Bank only to the KYC-compliant bank accounts.

2. In the case of bank accounts that are not KYC compliant, the recipient bank must conduct KYC/CDD on the recipient before crediting or allowing withdrawals to such accounts.

3.The Partner Bank (i.e., the AD Cat-I Bank receiving foreign inward remittances through non-resident exchange houses under RDA) shall appropriately mark the direct-to-account remittances to indicate to the Recipient Bank that it is a foreign inward remittance.

4.The Partner Bank shall ensure that accurate originator information and necessary beneficiary information are included in the electronic message while transferring the fund to the Recipient Bank. This information should be available in the remittance message throughout the payment chain, i.e., the Non-Resident Exchange House, the Partner Bank, and the Recipient Bank. The Partner Bank should add an appropriate alert in the electronic message indicating that this is a foreign inward remittance and should not be credited to a KYC non-compliant account.

5. The identification and other documents of the recipient shall be maintained by the recipient bank as per the provisions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. The Partner Bank shall adhere to all other requirements under KYC/AML/CFT guidelines issued by the Reserve Bank of India from time to time.

6.The Recipient Bank may seek additional information from the Partner Bank and shall report suspicious transactions to the FIU-IND with details of the Partner Bank through which they received the remittances.

Also Read: How RBI Creates & Distributes Indian Rupee Banknotes

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