Implementation of Bharat Bill Payment System (BBPS) - Guidelines

 

In the   Second Quarter Review of Monetary Policy 2012-13, Implementation of an electronic GIRO system in India,   viz.,   a payment instruction from one bank account to another bank account which is initiated by the payer and not the payee, had been identified as one of the key tasks in Payment Systems in India: Vision 2012-15. Subsequently a committee was constituted to finalise the modalities of implementing an electronic GIRO payment system in India study. Further, a Giro Advisory Group (GAG) was constituted to define a framework that enables the creation of pan India touch points for bill payments by  customers in the country, irrespective of the geographical location of the billers.

 

the GAG concluded that there is a need for a tiered structure for running the bills payment system in the country. There is also a need for the entire system to operate on a single brand image so as to enjoin the confidence and trust of the customers, besides providing the convenience of ‘anytime anywhere’ bill payment. For this, standardisation of rules and processes is imperative, and it is recommended that such standards and processes are set up by an organisation which operates on non-commercial terms. However, the job of setting up the technical and operational bill payments infrastructure including on-boarding of billers and setting up of the agent networks has to have its basis on commercial terms.

 

Based on the public comments on the draft guidelines of GAG for implementation of the Bharat Bill Payment System (BBPS) the final guidelines are now being issued by Reserve Bank of India under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007.

 

The Important features of the Bharat Bill Payment System (BBPS)-Guidelines are as under:

 

Scheme

The Bharat Bill Payment System (BBPS) will function as a tiered structure for operating the bill payment system in the country with a single brand image providing convenience of ‘anytime anywhere’ bill payment to customers.

The BBPS will consist of two types of entities carrying out distinct functions –

(i)    Bharat Bill Payment Central Unit (BBPCU) which will be the single authorized entity operating the BBPS. The BBPCU will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities.

(ii)    Bharat Bill Payment Operating Units (BBPOUs), which will be the authorised operational units, working in adherence to the standards set by the BBPCU. The tiered structure could be further strengthened through an effective agent network/s of the BBPOUs. While there will be a single BBPCU, there could be multiple BBPOUs operating under the BBPS.

 

Payments Covered

To begin with, BBPS would include activities to facilitate collection of repetitive (monthly, bi-monthly, quarterly etc.) payments for everyday utility services provided by utility service providers. Gradually, the scope of BBPS could be extended to include services facilitating the collection of other types of repetitive payments, such as, school / university fees, municipal taxes/payments etc. as decided from time to time by the Reserve Bank of India. The existing players (both banks & non-banks) catering to the requirements of bill payments as well as aggregation of payment services will be a part of BBPS .

 

Only a Company formed/registered with Charitable Objects to be BBPCU

BBPCU shall 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, it has been decided that the National Payments Corporation of India (an authorized umbrella institution for all retail payment systems in the country) which meets the above criteria will be authorized as the BBPCU to implement the BBPS.

 

BBPOU Eligibility Criteria

The eligibility criteria for non-bank entities seeking to operate as BBPOUs would be as follows:

a.      The entity should be a company incorporated in India and registered under the Companies Act 1956 / Companies Act 2013

b.     The Memorandum of Association (MOA) of the applicant entity must cover the proposed activity of operating as a BBPOU

c.      The applicant entity should have a net worth of at least Rs.100 crore as per the last audited balance sheet and the same has to be maintained at all times.

d.     In case of any Foreign Direct Investment (FDI) in the applicant entity, necessary approval from the competent authority as required under the policy notified by the Department of Industrial Policy and Promotion (DIPP) under the consolidated policy on FDI and regulations framed under the Foreign Exchange Management Act (FEMA) must be submitted while seeking authorization.

e.      The company must have domain experience in the field of bill collection/services to the billers, and relevant experience in transaction processing for a minimum period of one year.

f.      The entity must seek authorization under the Payment and Settlement Systems Act, 2007 from the Reserve Bank of India for its operations.

Banks which are desirous of operating as BBPOUs would need to obtain approval from the Reserve Bank of India under the Payment and Settlement Systems Act, 2007. Entities falling under the scope of BBPS and not meeting the eligibility criteria as above, but desirous of continuing business in this domain as a BBPOU, will need to seek time not exceeding one year from the date of operationalization of BBPS to meet the eligibility criteria. Alternately, they may decide to partner with other eligible and authorized BBPOUs. Existing entities, falling within the scope of BBPS, failing to take either of the two actions indicated above will not be allowed to offer aggregation of bill payment services thereafter.

 

Customer Protection and Grievance Redressal

Under the BBPS, the BBPOUs shall disclose all important terms and conditions in clear and simple language (preferably in English, Hindi and the local language) comprehensible to the customers of various billers/users of its services.

The role of BBPCU and BBPOUs in this process would be:

a.      To put in place a centralized end-to-end complaint management system for all ON-US and OFF-US transactions.

b.     Till such time the centralized complaint management system can be put in place, to begin with, the BBPS will facilitate at least the centralized ticketing/lodging of complaints (against any biller) from the end-consumers at any of the BBPS points, even though the final redressal will be handled by the respective billers/BBPOUs.

c.      Each complaint will be assigned and identified by a unique complaint reference number within the BBPS.

d.     After the complaint is lodged at any location, the BBPCU and/or the concerned BBPOU will escalate the complaint to the respective biller for redressal.

e.      A suitable tracking system has to be enabled so that the fate of the complaint is known to the customer (on the basis of the unique complaint reference number) at any location.

f.      The customer should not be levied any charges for lodging any complaints in the BBPS.  

All participants in the BBPS will be required to submit report on customer complaints in the format and frequency as may be mandated.

 

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