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Bharat Bill Payment System (BBPS)
Bharat Bill Payment System (BBPS) is an integrated bill payment system which will offer interoperable bill payment service to customers online as well as through a network of agents on the ground. The system will provide multiple payment modes and instant confirmation of payment.
The policy guidelines for the BBPS system were issued by the Reserve Bank of India on November 28, 2014. The BBPS will operate as a tiered structure with a single Bharat Bill Payment Central Unit (BBPCU) and multiple Bharat Bill Payment Operating Units (BBPOUs).
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) 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.
To start with, the scope of BBPS will cover repetitive payments for everyday utility services such as electricity, water, gas, telephone and Direct-to-Home (DTH). Gradually, the scope would be expanded to include other types of repetitive payments, like school / university fees, municipal taxes etc.
Banks and non-bank entities presently engaged in any of the above bill payment activities falling under the scope of BBPS and desirous of continuing the activity are mandatorily required to apply for approval / authorisation to Reserve Bank of India under the Payment and Settlement Systems (PSS) Act 2007.
The eligibility criteria for non-bank entities seeking authorization to function as BBPOUs are given below:
• The entity should be a company incorporated in India and registered under the Companies Act 1956 / Companies Act 2013
• The Memorandum of Association (MOA) of the applicant entity must cover the proposed activity of operating as a BBPOU
• 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.
• 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.
• 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.
• The entity must apply for authorization under the Payment and Settlement Systems Act, 2007 to the Reserve Bank of India for its operations.
‘Net-worth’ should becomputed taking into account paid up equity capital, free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of assets but not reserves created by revaluation of assets’adjusted for ‘accumulated loss balance, book value of intangible assets and Deferred Revenue Expenditure, if any’.
If an entity applying for authorisation for BBPOU does not have the required net worth as indicated in the eligibility criteria, then they are required to demonstrate unequivocal commitment / sources for raising the funds and also specify the time period within which the funds will be raised.
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