Soon, pay school fees via Bharat Bill Pay

 (Photo: iStock)

The Reserve Bank of India (RBI) took several consumer-friendly decisions on Wednesday in the latest monetary policy.

The central bank decided to reduce the risk weightage for consumer credit (other than credit card loans) from 125% to 100%. “With technological advancement, lenders know a lot more about borrowers and do not need to set aside the same amount of capital as before,” said Gaurav Gupta, CEO, Myloancare, adding that personal loan rates may come down. “The reduction in risk weights is a positive move and will help expand the market further. The expansion will be subject to demand and meeting the risk filters of the bank for the respective products,” said Pralay Mondal, group executive and head, retail banking, Axis Bank Ltd.

RBI also decided to open up the Bharat Bill Payment System(BBPS), an inter-operable platform for recurring bill payments, to service providers like schools. “Host of non utility organizations like schools (for school fees), housing societies (for maintenance charges) coming onto payment platforms will speed up transition to a less cash economy,” said Vivek Belgavi, partner and fintech leader, PwC. Currently, service providers for electricity, water, telecom, gas and direct-to-home are enabled to use BBPS.

In other announcements, RBI has decided to extend timings of NEFT from 8am to 7pm to all-day (24×7). NEFT is the system used to transfer money between banks, typically for less than2 lakh, although it can be used for higher amounts also. Another transfer method IMPS is active 24×7 but it entails certain costs. RBI also announced the creation of a central fraud registry which can be accessed by payment system participants for near-real time fraud monitoring. Aggregated data will also be published to educate customers on emerging risks. “This will go a long way in increasing the confidence of customers in using digital modes,” said Adhil Shetty, chief executive officer, Bankbazaar.

[“source=livemint”]