National Payments Corporation of India (NPCI)
16-Aug-2018: NPCI launches UPI 2.0 with overdraft facility
National Payments Corporation of India (NPCI) has upgraded unified payments interface (UPI) with enhanced security features and overdraft facilities. In addition to current and savings accounts, customers can link their overdraft account to UPI.
The UPI mandate could be used in a scenario where money is to be transferred later by providing commitment at present.
UPI is a path breaking innovation that is unprecedented globally. Its high volume, low cost and highly scalable architecture built on an open source platform is key to India’s transformation to a digital payment economy.
The first version of UPI was launched on April 11, 2016 and in the last two years the platform has emerged as a popular choice among users for sending and receiving money. BHIM UPI has recorded transactions worth ₹ 45,845 crore and 235 million in terms of value and volume in the month of July 2018.
28-Jul-2017: NPCI receives final nod from RBI to function as Bharat Bill Payment Central Unit
National Payments Corporation of India (NPCI), the umbrella organisation for all retail payment systems has received a final nod from the Reserve Bank of India to function as the Bharat Bill Payment Central Unit (BBPCU) and operate the Bharat Bill Payment System (BBPS).
On August 31, 2016, 8 BBPS operating units, which received in-principle approval from RBI, took part in the pilot. Almost after a year of running the pilot, streamlining the technology and business processes, NPCI has now received final clearance from RBI.
There is a specific direction from RBI to operate the Central Unit as a Strategic Business Unit of NPCI. Nearly 45 crore bills comprising electricity, telecom, DTH, water and gas are permitted under BBPS. This initiative will provide a major push to digital payments as it is a big step forward in formalising the bill payment system in the country.
The total number of Bharat Bill Payment Operating Units (BBPOU) certified by NPCI now stands at 24. The certified units include three public sector banks (Bank of Baroda, Union Bank of India and Indian Overseas Bank), 10 private banks, five cooperative banks and six non-bank biller aggregators.
Currently, 42 large billers in five utility sectors have been on-boarded. Major public sector banks including State Bank of India (SBI) are still under certification.
At present the bulk of transactions on BBPS are towards payment of electricity bills. The power sector potentially contributes to about 18 crore bills each month, of which only 10 per cent is digital. The likelihood of meeting the target of generating 25 billion digital transactions during the current financial year depends critically on the power sector getting on-boarded on the BBPS system.
The Bharat Bill Payment System (BBPS) is an RBI conceptualised system driven by National Payments Corporation of India (NPCI). It is a one-stop payment platform for all bills, providing an interoperable and accessible “Anytime Anywhere” bill payment service to customers across the country with certainty, reliability and safety of transactions.
State Banks (Repeal and Amendment) Bill, 2017
18-Jul-2018: Rajya Sabha passes the State Banks Repeal & Amendment Bill, 2017
The Rajya Sabha has passed the State Banks (Repeal and Amendment) Bill,2017 . The House adopted the amendment moved by the government regarding the bill. The Bill seeks to repeal the State Bank of India (Subsidiary Banks) Act, 1959, the State Bank of Hyderabad Act, 1956 and further to amend the State Bank of India Act, 1955.
Under it, the five associates banks that were merged are State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. The merger of these banks have already been effective from 1st April, 2017.
Replying to debate on the bill, Minister of State for Finance, Shiv Pratap Shukla said, the merger of these banks into SBI will enhance profitability, provide better customer service . The merger will bring about increased capital base and increased ability to give loans. He said the decision of merger have been taken after approval of board of directors of these five banks and RBI.
Mr. Shukla said, post-merger every employee of these banks have been retained. Initiating the discussion, Jairam Ramesh of Congress stressed on the need of strengthening the banking system in the country and accountability in banks should be improved.
European Bank for Reconstruction & Development (EBRD)
11-Jul-2018: India becomes EBRD’s newest shareholder
India has become the 69th shareholder of the European Bank for Reconstruction and Development (EBRD), paving the way for more joint investment with Indian companies across the EBRD’s regions.
The Indian government applied for EBRD membership in December 2017. The EBRD Board of Governors, which represents all of the existing shareholders, voted unanimously in favour of the country’s application in March 2018.
India takes a shareholding in the EBRD but it will not be a recipient of EBRD financing.
The EBRD held its inaugural business forum in Mumbai on 22 June 2018, to mark India’s membership of the Bank. The conference, co-hosted with the Federation of Indian Chambers of Commerce and Industry (FICCI) and with the support of the Export-Import Bank of India, was held under the banner of: “Mobilising private sector finance in the EBRD region and how Indian companies can benefit”.
The EBRD has long worked with top-class Indian companies on investments in the EBRD’s countries of operations, which comprise 38 economies stretching across three continents. The Bank has cooperated with Indian enterprises on joint projects worth almost €1 billion, including investments with Tata, SREI, Jindal and Mahindra and Mahindra.
The EBRD is also working closely with leading Indian organisations, such as FICCI, the Confederation of Indian Industry (CII), the Associated Chambers of Commerce & Industry of India (ASSOCHAM), and the International Solar Alliance (ISA).
22-Nov-2017: Cabinet approves India's Membership for European Bank for Reconstruction & Development
The Union Cabinet chaired by the Prime Minister Narendra Modi has approved India's Membership for European Bank for Reconstruction & Development (EBRD). Necessary steps will be initiated by the Department of Economic Affairs, Ministry of Finance to acquire the membership of the EBRD.
Impact:
- Membership of EBRD would enhance India's international profile and promote its economic interests. Access to EBRD's Countries of Operation and sector knowledge.
- India's investment opportunities would get a boost.
- It would increase the scope of cooperation between India and EBRD through co-financing opportunities in manufacturing, services, Information Technology, and Energy.
- EBRD's core operations pertain to private sector development in their countries of operation.
- The membership would help India leverage the technical assistance and sectoral knowledge of the bank for the benefit of development of private sector.
- This would contribute to an improved investment climate in the country.
- The membership of EBRD would enhance the competitive strength of the Indian firms, and provide an enhanced access to international markets in terms of business opportunities, procurement activities, consultancy assignments etc.
- This would open up new vistas for Indian professionals on the one hand, and give a fillip to Indian exports on the other.
- Increased economic activities would have the employment generating potential.
- It would also enable Indian nationals to get the employment opportunity in the Bank.
Financial Implications: The minimum initial investment towards the membership of EBRD will be approximately €1 (one) million. However, this assumption is based on India deciding to buy the minimum number of shares (100) required for obtaining the membership. If India were to buy a higher number of Bank shares, the financial implications could be higher. In-principle approval of the Cabinet at this stage is being obtained for joining the Bank.
Background: The issue relating to acquiring the membership of the "European Bank for Reconstruction & Development (EBRD)" had been under consideration of the Government. With the country's impressive economic growth over the years and enhanced international political profile, it was considered appropriate that India should expand its presence on the global developmental landscape beyond its association with the Multi-lateral Development Banks (MDBs) such as the World Bank, Asian Development Bank and African Development Bank. The decision to join the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) was taken earlier in this backdrop.