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RBI Allows BBPS to Process Cross-Border Inbound Remittances

Published on September 17, 2022
Current Context: The Reserve Bank of India (RBI) decided to allow the Bharat Bill Payment System (BBPS) to process cross-border inbound remittances.
RBI Allows BBPS to Process Cross-Border Inbound Remittances
  • The direction was issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999.
  • From now on, foreign inward remittances received under the Rupee Drawing Arrangement (RDA), will need to be transferred to the KYC-compliant bank account of the beneficiary through Bharat Bill Payment System (BBPS).
  • Before this approval by the RBI, foreign inward remittances received under RDA could be transferred to the KYC-compliant beneficiary’s bank account through electronic mode, viz., National Electronic Fund Transfer (NEFT), Immediate Payment Services (IMPS).
  • RDA is a channel to receive cross-border remittances from foreign jurisdictions. Under this, the Authorized Category I banks enter into tie-ups with the non-resident Exchange Houses in the FATF-compliant nations to open and maintain their Vostro Account.
  • Vostro is a Latin word meaning “yours”. A Vostro Account is an account that a correspondent bank holds on another bank’s behalf. This account acts as a way for domestic banks to access the financial services of a foreign bank.

Question:

Q.1 Recently the RBI allowed ______ to process the cross-border inbound remittances.
a. Bharat Bill Payment System
b. PayPal
c. BillDesk
d. RazorPay

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