BSNL to switch to e-payments

KOLKATA: State-owned telecom behemoth Bharat Sanchar Nigam(BSNL) will shortly abandon payment of its vendor bills by cheque . It is about to switch to an e-payment system wherein, all bills payable to its battery of equipment vendors for both cellular and landline operations will be settled electronically.

The BSNL board, has issued an internal circular to all circle heads to gradually migrate to the e-payments route. Significantly, BSNL will also take the e-payments route to settle all bills of mobile/broadband content providers, roaming and SMS partners.

The move is likely to trigger huge operational efficiencies in BSNL’s settlement of multiple-vendor dues. In any given month, BSNL shells out between Rs 500 crore and Rs 1,000 crore towards vendor bills alone.

“BSNL has decided to migrate to the e-payments system to meet its vendor obligations expeditiously across circles. The present cheque payments system is considered cumbersome as it takes up too much time. Under the proposed e-payments mechanism, it will be possible to monitor the entire payments process on BSNL’s computer network. BSNL has informed the RBI and necessary clearances are in place to kick off the process,” a senior BSNL official told ET.

Indications are that BSNL will take the e-payments route to initially settle vendor bills in excess of Rs 5 lakh.
Financial circles close to developments said BSNL is likely to use the Real-Time Gross Settlement (RTGS) mechanism to kickstart the e-payments process. The RTGS system is available through RBI’s central server.

At present, the RTGS system is popular for jumbo inter-bank money transfers, considering that there are 12,000 bank branches across some 650 locations that have already migrated to the RTGS platform.

Under the RTGS system, for every payment transaction, a ‘unique’ transaction reference number is generated, which is akin to a cheque number and can be shared with the beneficiary vendor indicating payment initiation. Even the transaction status, including credit into the beneficiary vendor account can be electronically tracked using the reference number.

BSNL is already using the RTGS facility to transfer money between select banks, sources said.
Some of the major banks already offering the RTGS service through the RBI central server include ICICI Bank, State Bank of India, Punjab National Bank and Indian Bank.