Head / NACH – NACH – Bill Payments. Bharat Bill Payment Systems

            Reserve Bank of India today released the final guideline for rollout of BBPS. BBPS expands to Bharat Bill Payment Systems.

            NPCI will function as the authorised Bharat Bill Payment Central Unit (BBPCU) to set the standards for BBPS processes which need to be adhered to by all operating units (Bharat Bill Payment Operating Units - BBPOUs) under the system.

At the same time NPCI, as the BBPCU, will also undertake clearing and settlement activities related to the BBPS as outlined in the guidelines.

            Going ahead interested future participants of the BBPS system have been advised by RBI to interact with the NPCI to work out the modalities.

RBI will accept the applications from the prospective BBPS participants from the first quarter of 2015.

The exact date from which/format in which such applications for authorisation/approval can be submitted will be notified by RBI in due course

BBPS or the Indian GIRO in the long run is expected

01) to reduce the waiting time for bills payments  across India,

02)to increase the float in the Billers Bank accounts,

03) to encourage on time payment of bills,

04)to eliminate the activity of bill payments in the billers outlets

05) to save fuel

06)to introduce a new subset of loyalty points

In the initial phase the share of cash receipts as compared to electronic receipts will be more. As the consumers and participants gain knowledge, the share of electronic receipts will increase.

            The Payment Systems Vision in India 2012-15  highlighted the existence of a huge bill payments market with a diverse and a complex biller market structure with varied national/regional players and private/state owned entities.

In the Second Quarter Review of Monetary Policy 2012-13, the Reserve Bank of India announced the setting up of a Committee to finalise the modalities of implementing an electronic GIRO payment system in India.

The Committee was set up under the chairmanship of Shri G. Padmanabhan, Executive Director, Reserve Bank of India to study the feasibility of implementation of an electronic GIRO payment system in the country. Subsequently, based on the recommendations of the Committee, a Giro Advisory Group was constituted under the Chairmanship of Prof. Umesh Bellur, IIT Bombay, with the objective of defining 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 Group, which submitted its report on March 20, 2014, had recommended a tiered structure for bill payments system in the country – with a central unit setting the standards and various operating units working in accordance and adherence to the standards set for the BBPS.

Accordingly, the draft guidelines for implementation of the Bharat Bill Payment System (BBPS) were placed on the Reserve Bank’s website on August 7, 2014 for public comments. The final guidelines for implementation of the Bharat Bill Payment System (BBPS) have been prepared based on public comments received on draft guidelines.