RBI Revised Bharat Bill Payment System for Better Efficiency

The Reserve Bank of India (RBI) has issued the revised regulatory framework of the Bharat Bill Payment System (BBPS) to streamline the bill payments process, enable greater participation, and enhance customer protection. The new directions will be applicable from April 1, 2024, to banks, NPCI Bharat BillPay Limited (NBBL) and other non-bank payment system participants.

What is Bharat Bill Payment System (BBPS)?

BBPS is an integrated bill payment platform that enables payment or collection of bills through multiple channels using various payment modes, such as UPI, internet banking, cards, cash, and prepaid payment instruments. The channels include mobile apps, mobile banking, physical agents, and bank branches. BBPS is operated by NBBL, a wholly owned subsidiary of National Payments Corporation of India (NPCI).

What are the key changes?

The revised directions seek to clarify the roles and responsibilities of the system operator and system participants. They also specify the operational guidelines for escrow account management, settlement mechanism, dispute resolution framework, customer grievance redressal system, and data security standards.

Some of the key changes are:

• Any entity, other than a biller, operating a system for payment of bills outside the scope of BBPS is a ‘payment system’ and will require RBI authorisation to undertake the activity.
• Bharat Bill Pay Central Unit (BBPCU) will provide guaranteed settlement of all transactions routed through NBBL. It will also ensure that all transactions have BBPS reference number from the payment initiation stage and that no funds in the system flow through any third-party service provider (TSP).
• Biller Operating Unit (BOU) will be responsible for onboarding billers to BBPS and ensuring compliance with due diligence requirements in respect of onboarding of merchants.
• Customer Operating Unit (COU) will provide digital or physical interface to their customers, directly or through agent institutions. It will also ensure that customers have access to all billers onboarded on BBPS and provide a system for raising disputes. It will take responsibility for the activities of its agent institutions.
• A non-bank BBPOU shall open an escrow account with a Scheduled Commercial Bank exclusively for BBPS transactions. A non-bank BBPOU operates as Payment Aggregator (PA) when it collects funds from its customers or settles funds with billers onboarded by it. For the purpose of maintenance of escrow account, payment system operated by BBPOU shall be deemed to be designated payment system.
• NBBL shall put in place a dispute resolution framework for centralised end-to-end complaint management in compliance with RBI’s guidelines.

What are the benefits for customers?

The revised directions aim to provide customers with more convenience, choice, and confidence in paying their bills through BBPS. Customers can access all billers onboarded on BBPS through any COU or agent institution. They can also avail various payment modes and channels as per their preference. They can also raise disputes and get them resolved through a centralised system. Moreover, they can enjoy enhanced protection as the transactions are guaranteed by BBPCU and the funds are safeguarded in escrow accounts.

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