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What is Bharat Bill Payment System (BBPS)?

Reserve Bank of India (RBI) has revised the regulatory framework for Bharat Bill Payment System (BBPS).

What is Bharat Bill Payment System (BBPS)?

Bharat Bill Payment System (BBPS) is an integrated bill payment platform which enables payment / collection of bills through multiple channels (mobile apps, mobile banking, physical agents, bank branches, etc.) using various payment modes (UPI, internet banking, cards, cash, prepaid payment instruments, etc.). 

Who are the participants in BBPS?

The BBPS has the following participants –

  • Bharat Bill Payment Central Unit (BBPCU) – BBPCU is the entity which operates BBPS; sets operational, technical and business standards, and also undertakes clearing and settlement functions. 
  • Bharat Bill Payment Operating Units (BBPOUs) – BBPOUs are the system participants in BBPS. A BBPOU may function either as a Biller Operating Units (BOUs) or a Customer Operating Units (COUs) or both.
    • BOU is an entity which on-boards billers, either directly or through biller aggregators, on to the BBPS platform for collection of its bills.
    • COU is an entity which provides its customers with an interface (physical / digital) to pay bills, either directly or through agent institutions.

Who is BBPCU?

  • NPCI Bharat BillPay Limited (NBBL), a wholly owned subsidiary of National Payments Corporation of India (NPCI), is the authorised BBPCU.
  • NBBL is the entity authorised as the Payment System Provider for BBPS.
  • NBBL as the BBPCU, provides a platform connecting customers and billers, through COUs and BOUs, respectively. 
  • NBBL also undertakes clearing and settlement activities for transactions routed through the BBPCU.

Who are BBPOUs?

  • Banks (All Scheduled Commercial Banks including Regional Rural Banks / Urban Cooperative Banks / State Cooperative Banks / District Central Cooperative Banks), non-bank Payment Aggregators (PAs) and other existing entities authorised as BBPOUs can participate in BBPS as operating units. 
  • Banks and non-bank PAs, intending to operate as BBPOUs, will not require a separate authorization but they shall intimate RBI before commencing operations.

What are other directions?

  • The transactions facilitated through BBPS platform will require the bill to be fetched before payment initiation. 
  • In case of transactions involving payments for prepaid services, the customer relationship with the biller will be validated through the BBPS platform.
  • A non-bank BBPOU shall open an escrow account with a Scheduled Commercial Bank exclusively for BBPS transactions.
  • Non-bank BBPOU operates as PA when it collects funds from its customers or settles funds with the billers on-boarded by it. For the purpose of maintenance of escrow account, payment system operated by BBPOU shall be deemed to be ‘designated payment system’ under Section 23A of the PSS Act, 2007.
  • NBBL shall put in place a dispute resolution framework for centralised end-to-end complaint management in compliance with RBI’s guidelines on Online Dispute Resolution (ODR) System for Digital Payments dated August 06, 2020.
  • COUs and BOUs shall ensure that failed transactions are dealt with in accordance with the timelines prescribed in RBI’s circular on Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems dated September 20, 2019.

From when shall the directions be applicable?

The revised framework on BBPS shall be applicable from April 01, 2024.


References

Reserve Bank of India. (2024, February 29). 'Master Direction – Reserve Bank of India (Bharat Bill Payment System) Directions, 2024'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12616&Mode=0


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