NEW DELHI: Fintech startup PayNearby will start a facility of inward cross-border remittance by October, allowing beneficiaries to withdraw the amount as per their requirement rather than taking the whole amount in one go.
"The Reserve Bank has granted us the approval under the second cohort for cross-border remittance. India gets about USD 80 billion as remittance every year which either comes in cash or in bank account," Anand Kumar Bajaj, Founder, MD & CEO, PayNearby told PTI.
People from rural areas and urban areas can withdraw from various forex exchange providers situated at district headquarters or talukas. However, there are only 50,000-60,000 such forex providers.
"What we showed to the Reserve Bank is that instead of a one-time cash-in-cash-out mechanism, one can use the Rupee Drawing Arrangement (RDA) which can directly go to the bank account of the receiver and the money can be remitted to Aadhaar number (linked account)," Bajaj said.
PayNearby has created a dedicated IFSC code which will act as the router to deposit the money to the Aadhaar-linked bank account of the receiver.
He said it took the company about 6-7 months in the testing phase and refinement of the product is still in the process.
PayNearby will be able to launch this service in about a quarter's time or by October, Bajaj added.
"Users can go to BC (business correspondent) agents anywhere in their village or gram panchayat and give their thumb impression to match with the Aadhaar ID.
And one can withdraw as little as 10 per cent, 5 per cent or 2 per cent of the remittance money unlike earlier where one had to withdraw the full amount in one go," he explained.
This will benefit the users in a great way as they can earn interest on the rest of the money by keeping it in their bank accounts, Bajaj said.
In September last year, the Reserve Bank of India (RBI) allowed PayNearby to test the facility of routing inward cross-border remittance to the beneficiary's Aadhaar number as a virtual bank account using existing RDA mechanism in accordance with its Second Cohort under Regulatory Sandbox for Cross Border Payments.
PayNearby completed the test phase earlier this month. Besides, he said the company is also working towards launching financial products for the users living in rural and semi-urban areas.
"These services are for the mass 90 per cent citizens who save money. People do want to save in a fixed deposit or a recurring deposit, you can make them invest in a property. We want them to invest that money," he said.
Bajaj said as much as Rs 1.5 trillion money dispensed under Direct Benefit Transfer (DBT) has been lying unwithdrawn in the bank accounts of the beneficiaries which is "curtailing consumption artificially".
Last month, PayNearby joined hands with Protean eGov Technologies Ltd (formerly NSDL e-Governance Infrastructure Ltd) to offer PAN card-related services for its retail partners through Aadhaar and biometric or SMS-based OTP authentication for their customers.
Protean eGov Technologies is a universal, citizen-centric and population scale e-governance solutions provider.
PayNearby offers branchless banking and other financial services to the mass segment of the country by enabling the local neighbourhood kirana merchants commonly known as 'Digital Pradhans'.
PayNearby's 50 lakh plus micro-entrepreneurs across over 19,000 PIN codes assist more than 20 crore customers across the country.