RBI-appointed panel suggests new centralised bills payment system

An advisory group set up by the Reserve Bank of India (RBI) has suggested the setting up of a centralised bills payment system in the country, in order to fill the gaps in delivery of services in large parts of the country.

The committee, headed by Prof Umesh Bellur of the Indian Institute of Technology, Bombay, has recommended a tiered structure where the Bharat Bill Payment Services (BBPS) will be the authorised standard setting body handling settlement functions while the Bharat Bill Payment Operating Units (BBPOUs) will be the authorised operational units, working in adherence to the standards set by the BBPS.

The BBPS, which has necessary experience in the payment systems space, will function as a 'not-for-profit' organisation, while the BBPOUs may be operated on commercial lines by existing entities in the bill payments space as well as new entities interested in this segment.

The BBPS will also handle the settlement responsibilities arising out of the transactions in the system.

The committee, called GIRO Advisory Group (GAG), set up under the chairmanship of Prof Umesh Bellur of the Indian Institute of Technology, Bombay, to implement a national GIRO-based Indian Bill Payment System, submitted its report to the RBI on 20 March 2014.

The GAG observed that the bills payment landscape in the country is mostly biller-specific and thus do not provide an environment to customers to make bill payments through an inter-operable system in a seamless and efficient manner at many of the agent / customer service points that exist today.

These gaps in delivery of services in large parts of the country thus present an opportunity, as well as potential, for the creation of a centralised bills payment system in the country.

The GAG had interacted with various stakeholders / institutions from the bill payments industry and many organisations with experience and expertise in the area of bill payments. Based on these deliberations, the GAG said it had examined multiple options available to establish and run such a system in the country.

All the entities in this tiered structure will operate under the uniform and single brand of the BBPS. This will also ensure a uniform dispute resolution and customer grievance redressal mechanism, thereby building trust and confidence in such a centralised bill payment system, the panel noted.

Reserve Bank said it would issue further detailed guidelines after taking into account comments if any received on the approach suggested in the report.