NPCI Bharat Billpay, banks, and fintech firms are planning to implement banking interoperability following RBI approval. This initiative aims to centralize internet banking transactions, bringing them under the NPCI umbrella, aligning them with other payment systems like UPI and IMPS.
The move intends to standardize settlement cycles, improve data visibility, and enhance customer grievance mechanisms. Interoperability will enable any aggregator to facilitate net banking payments for customers of any bank, potentially increasing adoption and diversifying payment channels.
Banks are gearing up for potential changes in the liberalized remittance scheme (LRS) regarding international credit card spending, which could come into effect on April 1.
This proposal, previously postponed for a year, would integrate individual credit card transactions abroad into the annual $250,000 LRS cap, with spendings beyond ₹7 lakh incurring a 20% tax collection at source (TCS).
However, banks await clarity on distinguishing personal from business expenses and online card usage abroad from domestic transactions. The move is seen as part of the government’s efforts to curb foreign exchange outflow, posing challenges for High Net Worth Individuals (HNIs) who may seek alternative methods to spend abroad.
FPIs have surged in their investment in the Indian equity markets this month, injecting over ₹38,000 crore, after a modest investment in February and a significant outflow in January. This resurgence is attributed to favorable shifts in the global economic scenario and a strong domestic macroeconomic outlook.
In February 2024, BharatPe platform saw a 77% increase in merchant onboarding and a 47% rise in website traffic for onboarding inquiries. Notably, Tier-I cities witnessed a 76% increase, Tier-II cities saw 63% growth, and Tier-III and beyond cities experienced over 83% growth, resulting in the total merchant base surpassing 1.3 crore.
The company’s enhanced offerings, including free QR code setup and instant settlements, further fueled this growth. Despite narrowing its loss to ₹886 crore in FY23 from ₹5,594 crore in FY22, BharatPe continues to expand its merchant lending business, which grew by 129% to ₹5,339 crore, with total loan disbursements reaching about ₹12,400 crore.