MUMBAI: Standing in long queues to pay utility bills may soon be passe across the country as the Reserve Bank of India has licensed 33 banks and financial institutions to become part of an integrated electronic bill payment service called Bharat Bill Payment System.
According to industry insiders, State Bank of India, Bank of Baroda, HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank and RBL Bank are among 26 banks to have received in-principle nod from the regulator to operate as Bharat Bill Payment Operating Units (BBPOUs).
Digital wallet companies Paytm and Oxigen and payment services company TechProcess , which runs Bill Junction, are among seven non-bank companies that have received similar nods, people with direct knowledge of the matter told the Economic Times.
As BBPOUs, these entities will operate single-window facilities for electronic payment of bills of utility services such as electricity, water, gas and telephones. Customers will no longer have to transact on different gateways to pay their bills, and can easily track all their payments.
Over time, Bharat Bill Payment System would be expanded to include school fee, university fee, municipality taxes, mutual funds, insurance premiums, etc., as per clearances from RBI, sources said.
At least seven entities — SBI , ICICI Bank, Kotak Mahindra Bank, RBL Bank, Paytm, TechProcess and Oxigen — confirmed their BBPOU licence.
“The opportunity is huge as existing billers itself have less than 10% electronic penetration,” Anand Ramachandran, CFO at TechProcess, told ET. “We have been in dialogue with NPCI (National Payments Corporation of India, the nodal agency to operate the payment system) for technical specifications hopefully by June end we will be up and running with the pilot.” TechProcess currently has 80 registered billers.
“In terms of our ability to be operational with this (BBPOU) we are pretty much ready,” Pramod Saxena, founder of Oxigen Services, said. “In our view we can get the final license in couple of weeks, we will submit remaining details to RBI as early as next week”.
Bank of Baroda, Axis Bank and HDFC Bank did not respond to ET’s query.
RBI had on Friday announced that it had begun the process of authorising entities to operate as BBPOUs. It had received 62 applications from non-bank entities and 80 requests from banks seeking its authorisation.
The banking regulator said it has commenced communicating the decision directly to applicants.
The National Payments Corporation of India (NPCI) is the nodal agency to operate Bharat Bill Payment System and set standards for processes to be followed by operating units.
“RBI has given us a timeline to get started by end of June so we have a month and a half to get ready,” said AP Hota, managing director at NPCI that will also set standard processes for operating units. “Time available is very short, but we would be making attempts to make as many of them (licensees) prepared as possible. Seven-to-eight institutions would be a good number to start with,” he said.
In 2013, RBI had estimated that around 3,080 crore bills were generated amounting to over Rs 6 lakh crore in the top 20 cities. This is expected to rise to over Rs 9 lakh crore by 2019.
The RBI in October last year had called for bids from companies currently engaged in bill payments that want to become units operating under the Bharat Bill Payment System.