Vishleshan for Regulatory Exams 8th October 2025: Bharat Connect’s Ambitious Expansion

Staying updated on economic and regulatory issues is non-negotiable for exams like RBI, SEBI, or NABARD. Every topic matters. Every update can turn into a question. In today’s Vishleshan, we focus on ”Bharat Connect’s Ambitious Expansion” This issue is timely. Its relevance is growing. And its impact is deeply linked with policy and regulation. Understanding it now will not just help in exams but also sharpen your perspective.

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Bharat Connect’s Ambitious Expansion

Context: UPI is evolving far beyond simple person-to-person transfers. Recent RBI and NPCI announcements are expanding its scope to include seamless retail forex purchases and multi-signatory features, bringing its convenience to businesses and international travellers alike.

Link to the Article: Business Standard

The article reports on a significant new initiative by the Reserve Bank of India (RBI) to link the Bharat Connect bill payment system with its forex retail platform. This integration allows individual customers to easily and digitally purchase US dollars for various needs like foreign travel, education remittances, or loading forex cards. The service is being launched as a pilot with five major banks (Axis Bank, Federal Bank, ICICI Bank, SBI, and Yes Bank) and can be accessed through popular third-party apps like CRED and Mobikwik. This move is a major step towards democratising access to the foreign exchange market, making it more convenient and competitive for retail users.

Bharat Connect (Bharat Bill Payment System – BBPS)

Bharat Connect, formally known as the Bharat Bill Payment System (BBPS), is an integrated and interoperable bill payment ecosystem conceptualised by the RBI and driven by the National Payments Corporation of India (NPCI).

Think of it as the “UPI for bill payments.” Before BBPS, paying bills was a fragmented process. You had to go to different websites or apps for your electricity bill, your gas bill, your DTH recharge, and your phone bill. BBPS brings all these billers onto a single network. This allows you to pay multiple bills from a single point of service—like your bank’s app, a fintech app (like Paytm, PhonePe), or even a physical agent’s location—using your preferred payment method. It offers an “anytime, anywhere” bill payment experience.

History: From GIRO to Brand Launch

• The GIRO Committee (2013): The foundation for BBPS was laid by an RBI committee headed by G. Padmanabhan. The committee recommended the creation of a nationwide payment system to handle recurring bill payments, inspired by the GIRO systems popular in Europe. A GIRO system is a payment network that allows customers of any bank to pay anyone else, regardless of which bank they use.
• NPCI as the Nodal Body: The RBI authorised the NPCI to function as the Bharat Bill Payment Central Unit (BBPCU), the single nodal entity to operate the entire system.
• Pilot Launch (2016): The BBPS was launched in a pilot phase to test its functionality and iron out operational issues.
• Official Launch & Brand Unveiling (2018): After a successful pilot, the system was officially launched nationwide, with the brand name “Bharat Connect” being used to create wider consumer recognition.

Bharat Connect Architecture:

The BBPS operates on a two-tiered model:

1. Bharat Bill Payment Central Unit (BBPCU): This is the NPCI itself. It is the central authority that sets the operational, technical, and business standards for the entire system and manages the clearing and settlement activities between participants.
2. Bharat Bill Payment Operating Units (BBPOUs): These are the entities that are authorised by the RBI to provide the bill payment services. They are the frontline service providers. BBPOUs can be either:
   • Biller Operating Units: They onboard billers (like your electricity company or mobile operator) onto the BBPS network.
   • Customer Operating Units: They provide the front-end interface to the customers (e.g., a bank’s mobile app, a fintech app) through which they can pay their bills.
   • Many entities, like major banks and payment aggregators, function as both types of operating units.

Benefits of Using Bharat Connect:

The operationalisation of BBPS has created a revolutionary shift in how Indians pay bills.

• Interoperability: This is the biggest benefit. A customer of Bank A can use their app to pay a bill from an electricity company that is onboarded by Bank B.
• Accessibility: Bill payments are no longer restricted to online users. The network includes a vast network of physical agents, making it accessible to a wider population.
• Convenience: A single platform to view and pay all your recurring bills, with instant payment confirmation.
• Choice of Payment Modes: Customers can pay using credit cards, debit cards, UPI, wallets, or net banking.
• Transparency and Security: Standardised processes and RBI oversight ensure a secure and reliable transaction environment.

Decoding the Article: An Analysis

The Big Announcement: Linking BBPS with Forex

The core of the news is the linkage of two powerful platforms:

• Bharat Connect (BBPS): The ubiquitous, interoperable platform for payments.
• FX-Retail Platform: An electronic trading platform launched by the Clearing Corporation of India Ltd (CCIL) at the RBI’s behest, to allow retail customers to buy and sell foreign currency.

By linking them, the RBI is essentially using the user-friendly front-end of BBPS to provide access to the wholesale rates of the FX-Retail platform. This is a classic example of using digital public infrastructure to democratise access to financial services.

What Does This Mean for the Common Person?

Previously, buying forex was a cumbersome process. You had to visit a bank branch or a money changer, deal with physical paperwork, and often accept non-transparent and uncompetitive exchange rates.

Now, with this integration, a customer can:

1. Open their preferred app (e.g., CRED, Mobikwik, or their bank’s net banking portal).
2. Register on the FX-Retail platform digitally through the app.
3. See competitive, near-wholesale US dollar exchange rates.
4. Purchase the forex digitally for three specific purposes:
   • Outward Remittances: (e.g., sending money abroad for education or family maintenance).
   • Forex Card Loading: For international travel.
   • Currency Notes: For physical cash to be delivered.
5. Pay for it seamlessly using their Indian bank account.

This transforms a complex, offline process into a seamless, transparent, and digital experience.

The Phased Rollout (The Pilot Project)

The initiative, launched at the Global Fintech Fest 2025, is starting as a pilot to ensure a smooth rollout.

• Initial Banks: Only customers of Axis Bank, Federal Bank, ICICI Bank, SBI, and Yes Bank can participate initially.
• Initial Channels: The service is available through CRED and Mobikwik, and the internet banking portals of Federal Bank and SBI.
• Future Expansion: The RBI has clearly stated that the scope will be expanded to include more banks, more third-party apps, and potentially more transaction types and currencies in the future.

Other NPCI Innovations:

The article also mentions two other important features launched by NPCI at the same event, showcasing the continuous innovation in India’s digital payment ecosystem:

• UPI Multi-Signatory: This is a game-changer for businesses and joint account holders. It allows payments that require multiple approvals (like corporate vendor payments or trust fund disbursements) to be authorised digitally via UPI, moving away from the cumbersome process of cheque signing.
• Small Value Transactions using Wearable Glasses: This is a futuristic step towards “ambient payments.” By integrating UPI Lite with smart glasses, it allows for truly hands-free, quick tap-and-pay like experiences, perfect for transit or retail environments. This marks UPI’s entry into the wearable payments ecosystem.

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