Retail ARCs (Asset Reconstruction Companies) – Please onboard BBPS

          The typical products offered in the Indian retail banking segment are housing loans, consumption loans for purchase of durables, auto loans, credit cards and educational loans. The loans are marketed under attractive brand names to differentiate the products offered by different banks and NFBCs.

          Retail Loans too can turn bad and the primary lenders may prefer to sell these bad loans to ARCs specialised in the Retail loans recovery.

The primary objective of ARCs is to recover the bad loans outstanding’s from the borrowers. This means each Loan Account will have a unique identifier and the borrower has to be quote this unique identifier while paying the Loan outstanding amount.

Hence, it is apt that the ARCs onboard BBPS under ‘Loan Repayment’ Biller Category.

5 Advantages to ARCs on onboarding BBPs

Advantage 01) Pan-India collection network within no extra hassle

Advantage 02) The borrower is assured that the repayment amount is going to the correct institution / loan account

Advantage 03) Instant receipt to the borrower instead of provisional receipts and associated recon issue.

Advantage 04) The recovery agent need not collect cash/cheques and hand over to the linked office for further processing

Advantage 05) Contactless payment option 24*7, 365 days a year

 ARCs can opt for the Free Format amount Option instead of Fetch n Pay. The borrower only has to input the unique identifier and the borrower name is displayed. The borrower can remit the decided  amount only.  

What are ARCs?

 An Asset Reconstruction Company is a specialized financial institution that buys the NPAs or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. Or in other words, ARCs are in the business of buying bad loans from banks.

 ARCs clean up the balance sheets of banks when the latter sells these to the ARCs. Instead of going after companies, Banks can sell their BAD LOAN to Asset Reconstruction Companies.

These companies buy the bad loan at discount rates. This means an asset reconstruction company will pay the agreed amount to the bank.

Asset Reconstruction Companies (ARCs) have been created to bring about a system for recovering Non-Performing Assets (NPAs) from the books of secured lenders and unlocking the value of Non-Performing Assets (NPA).

Reserve Bank of India (RBI) provides license for ARCs and ARCs are empowered by the SARFAESI Act.

          ARCs handle both corporate loans as well as retail loans.

 

 

List of Asset Reconstruction Companies (ARCs) registered with RBI (As on February 29, 2020)

 

S No Name of the company

1       CFM Asset Reconstruction Private Limited

2       Rare Asset Reconstruction Limited (Erstwhile Rare Asset Reconstruction Private Limited)

3       ANA ARC Private Limited

4       Omkara Assets Reconstruction Private Limited

5       MAXIMUS ARC Limited

6       Pridhvi Asset Reconstruction and Securitisation Company Ltd.

7       Aditya Birla ARC Limited

8       Ambit Flowers Asset Reconstruction Private Limited

9       ARCION Revitalization Private Limited

10     ASREC (India) Limited

11     Asset Reconstruction Company (India) Limited 

12     Edelweiss Asset Reconstruction Company Limited

13     India Resurgence ARC Private Limited

14     India SME Asset Reconstruction Company Limited

15     Indiabulls Asset Reconstruction Private Limited

16     Invent Assets Securitisation & Reconstruction Pvt. Ltd.

17     JM Financial Asset Reconstruction Company Limited (Erstwhile JM Financial Asset Reconstruction Company Private Limited)

18     Lone Star India Asset Reconstruction Private Limited

19     Pegasus Assets Reconstruction Pvt. Ltd.

20     Phoenix ARC Private Limited

21     Reliance Asset Reconstruction Company Limited 

22     Suraksha Asset Reconstruction Private Limited

23     International Asset Reconstruction Company Pvt. Ltd. 

24     Alchemist Asset Reconstruction Company Limited  (Erstwhile Dhir & Dhir Asset Reconstruction & Securitization Company Limited)

25     Assets Care & Reconstruction Enterprise Ltd.  (Erstwhile Assets Care Enterprise Ltd.)    

26     Encore Assets Reconstruction Company Private Limited

27     Prudent ARC Limited

28     UV Asset Reconstruction Company Limited

References:  

RBI Circular - Fair Practices Code for Asset Reconstruction Companies @ https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11937&Mode=0

 

RBI Draft Report - Draft Comprehensive Framework for Sale of loan exposures dt. June8th, 2020

 

 

HSBC India joins BBPS Platform

 

HSBC India vide a News Release on July 13th, 2020 announced to the public at large that its customers now can pay real-time bill payments via BBPS (Bharat Bill Payment Systems).

This facility is available to its customers on Net Banking and Mobile Banking Applications.

This allows customers to add and pay their bills in real-time and set up a schedule of payments or recurring bill payments.

The BBPS Module is integrated into the upgraded Digital Secure Access platform, for an enhanced and secure digital banking experience for customers.

These services allow HSBC Bank's customers to register online in a simplified manner and save their device / browser for enhanced security, amongst others.

HSBC Personal banking customers can read the process flow here, before proceeding to register the biller of their choice.

This integration will enable HSBC customers to pay their bills  from their bank accounts, instead of relying on old fashioned way i.e Cash or Cheque.

So, if you are a HSBC customer what are you waiting for, log into your HSBC Bank account and do the first bill payment.

HSBC serves its customers in India through three global businesses:

1. Retail Banking and Wealth Management

2. Commercial Banking

3. Global Banking and Markets

The Bank offers a wide range of services and products to resident as well as non-resident Indian customers based in various countries across the globe through its Retail Banking and Wealth Management wing.

BBPS targets are HSBCs Retail Banking and Wealth Management customers, rather than Commercial Banking and Global Banking and Markets customers.

 Of course, if any employees of corporates serviced by Commercial Banking and Global Banking and Markets hold HSBC Retail Banking customers, they can experience the Joy of BBPS.

 

Image courtesy: HSBC

FAQs for AatmaNirbhar Bharat App Innovation Challenge

 

Q.No.01) Where should the Application be submitted?

Ans.01) The application should be submitted on https://innovate.mygov.in/app-challenge/#tab1

Q.No.02) Is it mandatory to have a mygov.in account?

Ans.02) Yes, it is mandatory to have a mygov.in account. Applicants can create a new account or also log with their Social Accounts i.e. Facebook, Google, Twitter, LinkedIn or Github.

Q.No.03) What is the last date for submission?

Ans.03) The last date for submission is 17.30 hrs, July 18^th 2020

Q.No.04) Is there any participation fees?

Ans.04) No, there is no participation fees.

Q.No.05) Can I participate as an Individual?

Ans.05) Yes one can participate as an Individual.

Q.No.06) Is a working prototype necessary?

Ans.06) A working prototype is preferred, though not mandatory in the initial phases.

Q.No.07) How to contact the organisers, if required?

Ans.07) Participants can touch base with the organising team via mail at: connect@mygov.nic.in

Please note Any correspondence with participant will be done through an email provided by the participant at time of filling the application form. Organizers are not liable in case of email delivery failures.

Q.No.08) What are the broad categories for which Applications can be submitted?

Ans.08) The AatmaNirbhar Bharat App Innovation Challenge invites applications for the following 8 broad categories:

 

1.      Office Productivity & Work from Home

2.      Social Networking

3.      E-Learning

4.      Entertainment

5.      Health & Wellness

6.      Business including Agritech and Fintech

7.      News

8.      Games

Q.No.09) Will there be sub-categories within the main categories?

Ans.09) Yes, there will be sub-categories within the main categories. Jury will take the decision to create sub categories. The number of sub-categories will depend on the number of applications received and the concepts around the applications.

Q.No.10) What are documents to be submitted along with the Application?

Ans.10) Personal Bio Data – PDF Document not exceeding 2 MB

Application Concept – 5000 characters.

If Application is ready for use:

·         Application Link

·         Application User Manual – PDF Doc within 4mb

·         Application available on _ Android, iOS, Windows, Web Browser

·         Additional supporting document if any - PDF within 2MB(Explaining how the solution is Robust, Scalable, Secure, Data Integrity Policy and UI UX features)

·         Number of downloads

·         Servers (Web/Data/Cloud) Location - Select India / Outside India

·         Number of Monthly Active Users

·         Privacy Policy - PDF within 2MB

·         Permissions sought in app

If Application is NOT Ready for use:

·         Development phase/doc - PDF within 2MB

·         Source code url (GitHub/Other)

·         Expected date of completion

Q.No.11) Can I edit the submitted Application?

Ans.11) No, once the application is submitted, editing is not permitted.

 

Q.No.12) Can Multiple entries be submitted?

Ans.12) Yes, multiple entries can be submitted.

Q.No.13) Will I receive a conformation SMS/Email on successful submission of the Application?

Ans.13) On successful submission of the application, you will receive a Pop-Up message. Participants will not receive any SMS/email

 

 

Semi-Inspiration for this Blog Post:

https://www.linkedin.com/feed/update/urn:li:activity:6685118400269713408/

 

Disclaimer: This is only an attempt to increase the number of submissions. I am solely responsible for any errors in the FAQs.

 

 

 

 

 

An Analysis of BBPS June 2020 Daily Volumes

An Analysis of BBPS June 2020 Daily Volumes

Topline: The focus is on moving 90% of Retail Bill Payments to BBPS in the next 5 years.

• BBPS Volumes tend to go down on Sundays. Is it because bank account holders prefer to postpone not so important bill payments to the next working day?

• BBPS Volumes tend to go up on Mondays. Is it because pending bills are verified on Sundays and the payments made on Mondays?

• BBPS average transaction value goes up during month ends. Is this because overdue bills are paid by the month end to avoid defaults?  

Urjanet – Any plans to integrate with India’s BBPS?

Topline: I wish to see 90% of Retail Bill Payments being routed via BBPS (Bharat Bill Payment Systems) in the next 5 years

Urjanet is connected to over 6,000 utility providers worldwide. Urjanet operates a utility bill capture for payments solution, which supports bill payment and streamlined accounts payable operations for corporates.

Quote

Our flexible technology allows us to integrate with virtually any provider. Chances are, we already work with yours. Search for your provider to see if it’s integrated into the Urjanet Utility Data Platform. To view all covered utilities in a certain region, type in the state or country.

Unquote

Unfortunately, Urjanet is not yet connected to any utility providers in India. In India, Urjanet has an office in Chennai. This eases the process to expand its services in India.

The number of Utility Billers is on the increase as LPG Gas is delivered to residents via pipes.

In the first week of July 2020, in yet another reform initiative in the oil and gas sector, the government is set to throw open city gas distribution (CGD) networks across the country to competition, allowing participation of more than one player in a circle vying to attract consumers.

Quote

"We have finalised regulations on allowing competition in CGD areas that will be notified in next seven to 10 days," Petroleum and Natural Gas and Regulatory Board (PNGRB) Chairman D.K. Sarraf told IANS.

 Unquote

This will increase the number of consumers serviced by Utility Service providers all over India.  As more and more billers on board BBPS, the data available will be valuable to analyse customer behaviour.

            The news about Urjanet securing $14.65 million in Series D funding in the last week of June 2020 from varied investors that include Equifax and existing backers Oak HC/FT, Pete Kight, Grotech Ventures and Correlation Ventures adds value to alternate data requirements for processing loan applications.

The company aims to expand the sources of data from which financial services providers can pull for underwriting and other services. In the company’s funding announcement, Equifax president of United States Information Services Sig Singh said the firm is “erasing the problem of thin credit files or credit invisibility” to support access to financing for consumers and businesses.

The major benefit I see from Urjanet integrating with BBPS is the ability for companies to pay their Utility Bills via BBPS instead of paying via Cheques /Demand Drafts or other modes.

For Eg: Punjab State Power Corporation Ltd has made mandatory  Digital payments for all bills above Rs 50000 w.e.f 1st July 2019. 

This has led to corporates paying their electricity bills via RTGS/NEFT.

The bill payment via RTGS/NEFT is a bit cumbersome and can be more customer-friendly.

Just read this article of July 2018 - Rs 100 crore in one day: PSPCL realises the magic of digital payments @ https://egov.eletsonline.com/2018/07/rs-100-crore-in-one-day-pspcl-realises-the-magic-of-digital-payments/