What changed
Previously, RDA remittances could only be transferred to beneficiary accounts via electronic modes like NEFT or IMPS. Now, AD Category-I banks can also use BBPS for these transfers, subject to the same conditions as the 2014 circular. This change was announced in the Statement on Developmental and Regulatory Policies issued on August 05, 2022.
What it means for you
Banks can offer NRIs and remitters a more integrated bill payment experience through BBPS, potentially increasing remittance volumes. It simplifies the last-mile crediting for utility and other bill payments, reducing operational friction. Lenders must ensure BBPS integration complies with existing KYC and RDA guidelines.
What you must do
- Update internal RDA processing systems to support BBPS as a payout channel.
- Ensure KYC compliance for biller accounts receiving RDA funds via BBPS.
- Communicate the new facility to NRI customers and remittance partners.
- Review and align with conditions in A.P. (DIR Series) Circular No. 120 dated April 10, 2014.
Who it affects
AD Category-I banks handling Rupee Drawing Arrangements, NRI customers using RDA for remittances, Biller service providers on BBPS, Remittance aggregators and payment system operators
Can all types of bill payments be made through BBPS using RDA remittances?
The circular allows transfer to KYC-compliant bank accounts of billers via BBPS, subject to conditions in the 2014 circular. It does not specify bill types, so it likely covers all BBPS-enabled categories.
Do we need separate RBI approval to enable BBPS for RDA?
No separate approval is needed beyond compliance with this circular and the 2014 circular. AD banks must ensure adherence to FEMA provisions and existing guidelines.
What are the key conditions from the 2014 circular that still apply?
The 2014 circular requires KYC compliance of beneficiary accounts and electronic transfer via modes such as NEFT/IMPS. The same conditions now extend to BBPS transfers.