Can Mudra Loans collections be routed through Bharat Bill Payment System (BPPS)?

-

          An introduction of Mudra Loans is available at the following links:
01)  MUDRA website
02) MUDRA FAQs
03) Collections Business potential
04) NDTV

          An introduction of Bharat Bill Pay is available at the following links:
a)     The Hindu
b)    NPCI December 2014 eNewletter
c)     NPCI August 2015 eNewsletter

          This article highlights the pains in collecting the Mudra Loan instalments.
          Times of India

          Quote
          In addition, banks are devising flexible repayment mechanism with instalments that can be paid on a weekly basis at some of the banks. "From a collection point of view the challenge is to ensure that a street vendor or a repair shop owner can pay the instalment at his doorstep and does not waste time coming to a bank branch. We are working on ways to address this issue and we may rope in collection agents," the PNB executive said.
          UNQuote
          Majority of the Mudra Loan borrowers are unwilling to spend in long queues at bank branches to repay the monthly instalments.
          Conventional payment methods like PDCs(Post Dated Cheques), ECS-Debit (Electronic Clearing Service), ACH-Debit will not work here.  
          The preferred repayment mode will be cash in low denominations.
          The cost to Banks in Mudra Loan repayments in Bank Branches will be high, approximately upto INR150/- per transaction. This cost includes the ‘missed customer’, cost.
          Mudra Loan borrowers prefer simple and safe repayment options.
          The BPPS can be the perfect choice to route Mudra Loan repayments.
          The benefits outweigh the negatives.
         

          

Comments

Post a Comment

Popular posts from this blog

CERTIFICATE EXAMINATION IN INTERNATIONAL TRADE FINANCE

-
Image
          This certification is essential for all members of a Bank Trade Finance Department.   The syllabus covers key aspects required by team members to effectively discharge their duties. Trade Finance is one of the traditional forms of bank finance in India. In view of reforms and liberalisation, this has gained a new significance.   Many of the practices in trade finance have evolved over a period of time and some are guided by Ministry of Commerce and Reserve Bank of India, besides WTO and International Chamber of Commerce through UCPDC 600. With the increase in the volume of trade both domestically and internationally, there is a need for trade finance professionals from banks as well as corporates. The Objectives of this IIBF Examination is as under:   (i) To provide candidates with competencies required to function as trade finance practitioners. (ii) To enable candidates to possess the ...
Read more

IIBF-Certificate Examination in Foreign Exchange Facilities for Individuals

-
          The primary objective this IIBF course is to make the branch officials familiar with the FEMA provisions that impact their day to day functioning at the branch level.     This exam is being introduced pursuant to the recommendation of a committee of RBI.           Normally foreign exchange transactions pertaining to individuals are handled at branches only and are not referred to specialised forex cells.           The course covers ‘Foreign Exchange Facilities for individuals under FEMA1999’ RBIs FAQs’ on Forex Facilities for Residents (Individuals) (updated up to November 21, 2014) For full details refer to Reserve Bank of India website: Introduction : The legal framework for administration of foreign exchange transactions in India is provided by the Foreign Exchange Management Act, 1999. Un...
Read more

IIBF introduces Self-Paced E-learning courses (SPeL) for its two certificates

-
Image
          Indian Institute of Banking Finance (IIBF) has taken a quantum leap in disseminating knowledge to its members and non-members.           IIBF in April 2019, introduced the Self-Paced E-learning courses (SPeL) concept for banking enthusiasts to be familiar with banking concepts.           In the first stage, IIBF has launched   two certificate courses i.e 1. Digital Banking and 2. Ethics in Banking.           The objective of this self-paced e-learning mode are as follows: • Participants can make the best use of his or her time, in order to meet his or her learning objectives. • Participants can access the course   anywhere/anytime with an internet connection. • Participants need not travel to give their examinations. It saves time and money of the participants. ...
Read more