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RBI grants approval for TReDS; NPCI to be central unit for Bharat bill payment

Posted Date : 25-Nov-2015 , 08:19:02 am | Posted By CASANSAAR print Print
Reserve Bank of India (RBI) on Tuesday granted an "in-principle" approval to three companies to set up and operate a new Trade Receivables Discounting System (TReDS) to be formed under the Payment and Settlement System (PSS) Act 2007.

A joint venture between the National Stock Exchange's NSE Strategic Investment Corporation Limited (NSICL) and Small Industries Development Bank of India (SIDBI), private sector lender Axis Bank and Gurgaon based Mynd Solutions Pvt Ltd has been granted the node to start a new TReDS system.

The approval is valid for 6 months, during which time the applicants have to comply with the requirements under the RBI guidelines. The three firms were selected after a four part process which included presentations to the RBI's inter department group and a review of applications by the committee of governors and deputy governors of the RBI.

TReDS will allow small and medium enterprises (SMEs) to post their receivables on the system and get them financed, bringing in much needed transparency to the trade receivable system.

Separately, RBI also granted an in principle approval to the National Payments Corporation of India (NPCI) to function as the Bharat Bill Payment Central Unit (BBPCU). These units will facilitate collection of bills and repetitive payments.

BBPS will be an integrated bill payment system, with a single brand image providing convenience of 'anytime anywhere' bill payment to customers. "As the central unit, NPCI will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities. The present scope of BBPS will include utility bill payments, such as, electricity, water, gas, telephone and Direct-to-Home (DTH). Based on the experience, this would be extended to include other types of repetitive payments, like school / university fees, municipal taxes etc. in future," RBI said.

However, the central bank will continue to receive applications for Bharat Bill Payment Operating Units-BBPOUs which will be linked to the NPCI linked central unit, till December 18. RBI has received 12 applications for authorisation from non-bank entities and 18 requests for approval from banks for operating as a BBPOU. (Economic Times)
 
 
 
 

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