Skip to main content

What is Bharat Bill Payment System (BBPS)?

Bill payments is an important, recurring, and at times a tedious task. But Bharat Bill Payment System (BBPS) has made it easier by offering ‘anytime anywhere’ bill payment solution.

What is Bharat Bill Payment System (BBPS)?

Bharat Bill Payment System (BBPS) is an integrated bill payment system in the country offering interoperable and accessible bill payment service to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment.

Who are the participants in BBPS?

The BBPS consists of two types of entities –

  1. Bharat Bill Payment Central Unit (BBPCU) – is the single authorized entity operating the BBPS. The BBPCU sets necessary operational, technical, and business standards for the entire system and its participants, and also undertake clearing and settlement activities.
  2. Bharat Bill Payment Operating Units (BBPOUs) – are the authorised operational units working in adherence to the standards set by the BBPCU. While there is a single BBPCU, there can be multiple BBPOUs operating under the BBPS.

Who can be BBPCU?

The BBPCU needs to be a Section 25 company under the Companies Act, 1956 (amended to Section 8 of the Companies Act, 2013), having professional senior management and experience in handling central infrastructure in payments, clearing and settlement, and transaction processing. 

Accordingly, the National Payments Corporation of India (NPCI) has been authorized as the BBPCU to implement the BBPS.

Who can be BBPOUs?

Both banks and non-banks catering to the requirements of bill payments as well as aggregation of payment services can be BBPOUs.

Banks which are desirous of operating as BBPOUs need to obtain approval from Reserve Bank of India (RBI) under the Payment and Settlement Systems Act, 2007.

The eligibility criteria for non-bank entities seeking to operate as BBPOUs is as follows –

  1. The entity should be a company incorporated in India and registered under Companies Act, 1956 / Companies Act, 2013.
  2. The Memorandum of Association (MOA) of the applicant entity must cover the proposed activity of operating as a BBPOU.
  3. The applicant shall have a net-worth of ₹25 crore at the time of application for authorisation and the same shall be maintained at all times thereafter.
  4. The company must have domain experience in the field of bill collection / services to the billers, and relevant experience in transaction processing for at least 1 year.
  5. The entity must seek authorization under the Payment and Settlement Systems Act, 2007 from RBI for its operations.

What are ON-US and OFF-US transactions?

The nature of transactions is classified into ON-US (the biller and payment collecting agent belong to same BBPOU) and OFF-US (the biller and the payment collecting agent belong to different BBPOUs) transactions.

BBPOUs takes care of ON-US transactions. BBPCU handles all the OFF-US transactions reported by all BBPOUs and arrive at appropriate settlement for each biller across various BBPOUs. The BBPCU arranges to instruct the settlement bank to make pay-outs to respective billers’ banks for credit to billers’ accounts.

Which billers are included under BBPS?

BBPS includes all categories of billers which raise recurring bills as eligible participants, on a voluntary basis.

Now, even a person staying outside India can make payments to billers in India through BBPS under the Rupee Drawing Arrangement (RDA) – ‘Direct to Account’ Facility.


References

Reserve Bank of India. (2014, November 28). 'Implementation of Bharat Bill Payment System (BBPS) - Guidelines (Updated as on May 26, 2022)'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=9368&Mode=0

Reserve Bank of India. (2021, June 14). 'Bharat Bill Payment System – Addition of Biller Category'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12113&Mode=0

Reserve Bank of India. (2022, September 15). 'Rupee Drawing Arrangement - Enabling Bharat Bill Payment System (BBPS) to process cross-border inbound Bill Payments'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12386&Mode=0


Follow at - Telegram   Instagram   LinkedIn   Twitter

Labels:

Comments

Post a Comment

Popular Posts

Payment of Agency Commission to Agency Banks (ABs) and Disbursement of Government Pension by ABs

Reserve Bank of India (RBI) has issued guidelines on the conduct of Government business by Agency Banks (ABs), payment of agency commission to ABs and disbursement of Government pension by ABs. Who are ABs? ABs mean all Public Sector Banks (PSBs), scheduled Private Sector Banks (PVBs), scheduled Payments Banks (PBs), and scheduled Small Finance Banks (SFBs) appointed by the RBI under Section 45 of the RBI Act, 1934, by mutual agreement, to carry out Government banking business of the Central Government (CG) / State Governments (SGs). What is agency commission? Agency commission means the remuneration paid by the RBI to an AB in consideration of it acting as an agent of the RBI in the conduct of general banking business of the CG and the SGs at the places and in the manner specified in the agreement between the RBI and the bank, with the exception of the functions relating to the management of the public debt. What are the guidelines on appointment of ABs? Any eligible bank which intend...
Post a Comment
Read more

Kisan Credit Card (KCC) Scheme

Reserve Bank of India (RBI) has issued directions on Kisan Credit Card (KCC) Scheme. To whom are the directions applicable? The directions are applicable to the following entities – Commercial Banks (excluding overseas branches of Indian banks) Small Finance Banks (SFBs) Regional Rural Banks (RRBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) Central Co-operative Banks (CCBs) To which loans shall the directions be applicable? The directions shall be applicable to loans sanctioned under the KCC Scheme with effect from January 01, 2027.  What are the crop seasons? Crop season means the period up to harvesting and marketing of the crops raised. Short duration crops shall mean crops with anticipated period from sowing to marketing up to 12 months. Long duration crops mean crops which are not short duration crops. The crop season for long duration crops i.e., anticipated period from sowing to marketing is more than 12 months and up to 18 months. For the purpose of the KCC...
Post a Comment
Read more

Credit Derivatives

Reserve Bank of India (RBI) has issued directions on credit derivatives. What is Credit Derivative? Credit derivative means a derivative contract whose value is derived from the credit risk of an underlying debt instrument or an index of underlying debt instruments. What is Credit Default Swap (CDS) and Total Return Swap (TRS)? Credit Default Swap (CDS) means a credit derivative contract in which one counterparty (protection seller) commits to pay to the other counterparty (protection buyer) in the case of a credit event with respect to a reference entity and in return, the protection buyer makes periodic payments (premium) to the protection seller until the maturity of the contract or the credit event, whichever is earlier. Total Return Swap (TRS) means a credit derivative contract under which one counterparty (total return payer) commits to transfer the entire economic performance of a reference asset to the other counterparty (total return receiver), and, in return, receives a pre-d...
Post a Comment
Read more

Deposits between a person resident in India and a person resident outside India

Reserve Bank of India (RBI) has updated the regulations on deposits between a person resident in India and a person resident outside India. What are the restrictions on deposits between a person resident in India and a person resident outside India? No person resident in India shall accept any deposit from, or make any deposit with, a person resident outside India. However, the following deposits are exempted – Deposits held in rupee accounts maintained by foreign diplomatic missions and diplomatic personnel and their family members in India with an authorised dealer. Deposits held by diplomatic missions and diplomatic personnel in special rupee accounts namely Diplomatic Bond Stores Account to facilitate purchases of bonded stocks from firms and companies who have been granted special facilities by customs authorities for import of stores into bond. The funds in the account may be repatriated outside India without the approval of the RBI. Deposits held in accounts maintained in foreig...
Post a Comment
Read more

Lead Bank Scheme (LBS)

Reserve Bank of India (RBI) has issued guidelines on the Lead Bank Scheme (LBS). Who is a Lead Bank? RBI designates a commercial bank as Lead Bank in each district, to coordinate the efforts of the banks, Government, National Bank for Agriculture and Rural Development (NABARD) and other stakeholders at the district level to improve credit flow to the priority sectors and promote financial inclusion in the district. 12 public sector banks and 2 private sector banks (Jammu & Kashmir Bank and ICICI Bank) have been assigned lead bank responsibilities, covering 778 districts across the country. What appointments are made under the LBS? Every lead bank shall appoint a Lead District Manager (LDM) in each district where it has the lead bank responsibility, to exclusively oversee and coordinate the implementation of the LBS in the district. NABARD shall appoint a District Development Manager (DDM) for each district to act as a liaison between NABARD and the district-level banking and financ...
Post a Comment
Read more