In-Principle Approval to NPCI

The Reserve Bank of India has  decided to grant ‘in principle’ approval to the National Payments Corporation of India (NPCI) to function as the Bharat Bill Payment Central Unit (BBPCU) in BBPS.

The Bharat Bill Payment System (BBPS), an integrated bill payment system, 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. As the central unit, NPCI will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities. The present scope of BBPS will include utility bill payments, such as, electricity, water, gas, telephone and Direct-to-Home (DTH). Based on the experience, this would be extended to include other types of repetitive payments, like school / university fees, municipal taxes etc. in future.

Bharat Bill Payment Central Unit (BBPCU) :Bharat Bill Payment Central Unit (BBPCU) will be a 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. As indicated in the circular dated November 28, 2015 National Payment Corporation (NPCI) has been identified to act as BBPCU. It will be an authorized entity under the Payment and Settlement Systems Act, 2007.

Bharat Bill Payment Operating Units (BBPOUs) : Bharat Bill Payment Operating Units (BBPOUs) will be authorised operational entities, adhering to the standards set by the BBPCU for facilitating bill payments online as well as through a network of agents, on the ground.

Other benefits from this scheme:

• Customer will have ease of paying bills and protection from any frauds.
• RBI and Government can keep tabs on all payments made in India- to fine tune their monetary policy and tax policies respectively.
• Today there are many first-time borrowers for whom credit score stands at zero and banks find it difficult to take a lending decision. Data from BBPS can help banks take a more informed decision. Banks can also come out with some lending practices and loan products mainly dependent on the BBPS data.

By: Vishal