RBI revises BBPS framework to streamline bill payments, enhance protection

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Reserve Bank of India has put in place a revised regulatory framework for Bharat Bill Payment Systems (BBPS) based on a review of developments in the payments landscape. The new framework, applicable from April 1, 2024, looks to streamline the process of bill payments, enable greater participation, and enhance customer protection, among other changes, the central bank said in a release.

BBPS operates as a tiered structure with NPCI Bharat Bill Pay Ltd (NBBL) as a Central Unit (BBPCU), Bharat Bill Payment Operating Units (BBPOUs), and agent networks of BBPOUs. 

NBBL, a wholly-owned subsidiary of National Payments Corporation of India (NPCI), is the entity authorised as the Payment System Provider for BBPS. It provides a platform connecting customers and billers, and undertakes clearing and settlement activities for transactions routed through the BBPCU.

NBBL as the BBPCU will be responsible for setting the rules and regulations governing participation criteria and system operations, and technical standards for participation in the system. They will also need to provide guaranteed settlement of all transactions routed through NBBL, and ensure that no funds in the system flow through any technology service provider (TSP), RBI said.

Dispute resolution

NBBL will also need to put in place a dispute resolution framework for centralised end-to-end complaint management. All participating entities will be integrated to the centralised system to enable customers and billers to raise and resolve disputes in accordance with the dispute resolution framework.

All 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 will not require separate authorisation. However, non-bank BBPOUs will need to open an escrow account with a Scheduled Commercial Bank exclusively for BBPS transactions. “Non-bank BBPOU operates as Payment Aggregator (PA) when it collects funds from its customers or settles funds with the 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’,” the guidelines said.