**Executive Summary**
This report outlines the implementation progress of the PM eBus Sewa – Payment Security Mechanism (PSM) Scheme as of March 2026. It details the status of bus tenders, infrastructure disbursements totaling ₹1254.38 crore, and the operational framework for payment security. Key highlights include the submission of Direct Debit Mandates by 19 States/UTs and a 12-year payment security coverage for deployed buses.
**Key Points / Main Content**
**Implementation Progress and Tenders**
* **Scheme Status:** Guidelines and Standard Operating Procedures (SOPs) have been published following the scheme's notification on October 28, 2024.
* **PM-eBus Sewa Tenders:** Tenders for 6,228 buses were concluded by February 28, 2026, with Letters of Award issued for 4,720 units.
* **PM E-DRIVE Tenders:** Tenders for 10,900 buses are concluded, while 2,900 additional buses are currently in the tendering process.
* **Regulatory Compliance:** As of March 12, 2026, 19 States/UTs have submitted Direct Debit Mandates (DDM) to the Reserve Bank of India.
**Financial Status and Infrastructure**
* **PSM Fund:** A first tranche of ₹500 crore was disbursed to CESL in FY 2025-26 to establish the Payment Security Mechanism Fund.
* **Sanctioned Amounts:** ₹1254.38 crore has been sanctioned for infrastructure proposals, comprising ₹706.16 crore for "Behind-the-Meter" power infrastructure and ₹548.22 crore for Civil Depot Infrastructure.
* **Expenditure:** By December 2025, ₹483.70 crore had been spent across sanctioned projects, with the highest expenditures recorded in Maharashtra (₹200.18 crore) and Bihar (₹87.55 crore).
**Operational Timelines and Mechanism**
* **Deployment Timeline:** Buses are typically expected to be deployed within two years from the date the Concession Agreement is signed between Public Transport Authorities and OEMs.
* **Security Coverage:** The PSM Scheme provides payment security for each deployed bus for a duration of up to 12 years.
* **Repayment Terms:** States are granted a 90-day window to repay disbursed amounts plus the applicable Late Payment Surcharge (LPS) to maintain the financial stability of State Transport Undertakings.
**Impact Analysis**
**State Governments and Union Territories**
**Impact:**
States gain access to a reinforced financial mechanism that secures payments for electric bus operations and provides substantial funding for depot and power infrastructure.
**Action Required:**
Non-compliant states must submit Direct Debit Mandates to the RBI and ensure the repayment of disbursed funds within the 90-day window to avoid surcharges.
**Public Transport Authorities (PTAs)**
**Impact:**
PTAs are the primary drivers of bus procurement, responsible for issuing Letters of Award and entering into long-term Concession Agreements.
**Action Required:**
Expedite the signing of Concession Agreements to initiate the two-year deployment countdown and manage the delivery of sanctioned buses.
**Original Equipment Manufacturers (OEMs)**
**Impact:**
OEMs benefit from reduced financial risk due to the 12-year payment security coverage provided under the scheme.
**Action Required:**
Fulfill bus delivery and deployment obligations within the typical two-year timeline following the execution of Concession Agreements.
**Convergence Energy Services Limited (CESL)**
**Impact:**
CESL acts as the fund manager responsible for the first tranche of ₹500 crore for the PSM Fund.
**Action Required:**
Administer the PSM Fund to ensure the financial integrity and availability of payment security for the scheme's duration.
Key Entities Referenced
PM e-Bus Sewa–PSM Scheme: The primary payment security mechanism providing coverage for up to 12 years to ensure financial stability for electric bus operators and state transport undertakings.
PM E-DRIVE Scheme: A major initiative for the procurement and deployment of electric buses, under which tenders for thousands of vehicles have been concluded across multiple states.
Ministry of Heavy Industries: The nodal ministry responsible for notifying the PSM scheme, overseeing its implementation progress, and managing the disbursement of infrastructure funds.
Convergence Energy Services Limited (CESL): The entity responsible for setting up and managing the Payment Security Mechanism (PSM) Fund with initial government disbursements.
Reserve Bank of India (RBI): The regulatory body to which States and Union Territories submit Direct Debit Mandates to facilitate the financial enforcement of the payment mechanism.