RBI allows blocking of funds for multiple auto-debits in UPI, expanded BBPS to non-recurring payments
Reserve Bank of India (RBI) Governor Shaktikanta Das has announced that the scope of Unified Payments Interface (UPI) transactions will be expanded to allow 'single-block-and-multiple-debits'. Also the scope of Bharat Bill Payments System (BBPS) will now be expanded to handle both recurring and non-recurring payments for both businesses and individuals. The National Payments Corporation of India (NPCI) will implement these changes for both UPI and BBPS in the next six months.
These were announced as part of the monetary policy announced by the governor on 7 December 2022.
Proposed changes in the UPI
- UPI currently includes functionality to process payment mandates for recurring as well as single-block-and-single-debit transactions.
- The new facility will enable a customer to block funds in his/her account for specific purposes, which can be debited whenever needed.
- It means that customers can now allot a certain amount to a specific purpose or merchant by giving their consent.
- For future transactions, money can be debited by the merchant without the additional requirement of authentication, making payments faster.
- Over the past year, the RBI expanded the scope of UPI to allow transactions in offline mode as well as through feature phones.
- In June this year, RBI allowed linking of RuPay credit cards to UPI.
BBPS scope expanded to non-recurring payments
- RBI also said that the scope of Bharat Bill Payments System (BBPS) will now be expanded to handle both recurring and non-recurring payments for both businesses and individuals.
- At present, BBPS handles recurring bill payments (like fess, water bill, telephone bills etc.) for merchants and utilities and does not cater to non-recurring bills.
- It also does not cater to bill payments or collections such as payment of fees for professional services, education fees, tax payments, rent collections, etc. for individuals even if those are recurring in nature.
- Now BBPS is being enhanced to include all categories of payments and collections, both recurring and non-recurring, and for all categories of billers (businesses and individuals).
On Know Your Customer
- The RBI governor Shaktikanta Das also said customers do not need to visit the bank to update their KYC (Know Your Customer) details.
- He said that customers can re-KYC (know your customer) online except where there is a change of address. He said that if the banks are forcing the customer to come to the branch then the customer can complain against the bank with the RBI.
- As per RBI’s KYC norm guidelines, banks need to periodically update customer identification documents of their account holders.
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