RBI May Allow Interoperability Among Bank Business Correspondents

Mumbai: The Reserve Bank of India is planning to allow business correspondents of one bank to offer payment services to other lenders for better efficiency and optimisation.

"We are now talking whether a business correspondent (BC) of one bank can do payment services for other banks, like ATMs are doing now. That convergence will provide efficiency and optimisation," RBI Deputy Governor H R Khan said at a CII event here.

He said the country is at the cusp of a big revolution in terms of digital revolution. Digital banking has to be one of the main elements of the digital India plan that the government is driving, he added.

Khan also enumerated various efforts that the central bank is making towards digitisation. For instance, the RBI, to address the growing bill payment market, has issued draft guidelines for implementation of the Bharat Bill Payment System and soon the system will be launched.

"We are focusing on the Bharat Bill Payment as there will be a huge market for bill payments. NPCI is going to be the central operating unit and other bill aggregators and banks will join. We hope that in less than a year's time we should be up and running," he said.

He said the central bank has also received seven applications for setting up an electronic trading platform for trade receivables for the MSME sector.

The RBI is also working on a proposal submitted by National Payment Corporation (NPCI) to connect all cash deposit machines through the National Financial Switch (NFS), he said.

This will make these machines inter-operable and allow a customer of a particular bank to deposit cash into his account from any bank's machine.

He said through core banking solution e-Kuber, the RBI is in the process of integrating the state and the central governments' receipts and payments.

"The whole focus is that all the banks in different states will be joining the treasury computerisation and the e-receipts and e-payments will happen in a big way," he said. States are big players in the payment space and with the increase of states' share in Central taxes, as recommended by the 14th Finance Commission, which nearly doubled the funds for states, the states' business will increase, he said.

"As you know more and more money is being transferred to states after the Finance Commission report, the state government business will increase substantially," Mr Khan said.