RBI improves Bharat Bill Payment System to enhance customer protection

The Reserve Bank of India (RBI) has introduced the Bharat Bill Payment Systems Directions, 2024, applicable to NPCI Bharat Bill Pay Limited and all Bharat Bill Payment Operating Units. These directions aim to streamline bill payments, enhance customer protection, and improve participation. Effective from April 1, 2024, these directions outline the roles and responsibilities of various entities within the system.

According to the directions, NBBL is authorised as the Payment System Provider for BBPS. Any entity operating payment systems outside BBPS scope requires RBI authorisation. The directions specify the roles of the system operator, system participants, BBPCU, BOU, and COU. BBPCU will guarantee settlement, ensure transaction tracking, prevent fund flow through Unauthorized Payment Systems, and provide conflict resolution mechanisms.

BOU must adhere to due diligence requirements for merchant onboarding. COU is responsible for providing customer interfaces, accessing all billers on BBPS, maintaining dispute systems, and overseeing agent institutions activities as per agreement. Regarding escrow operations, non-bank BBPOUs must have a dedicated escrow account with a Scheduled Commercial Bank for BBPS transactions. They operate as Payment Aggregators and must comply with the guidelines.

A Complaint Management and Grievance Redressal system is also mandated by the directions. NBBL must establish a centralised complaint resolution system in line with RBI’s guidelines. All participating COUs and BOUs must integrate with the centralised system to manage disputes using BBPS reference numbers. Failed transactions must be resolved within RBI’s prescribed timelines, following the Harmonisation of Turn Around Time (TAT) circular on customer compensation for failed transactions using authorised Payment Systems.