RBI's reason for wanting all payments to be processed through the Bharat Bill Payment System

New rules for settling credit card debts have been implemented by the Reserve Bank of India (RBI) starting July 1. The central bank stated that credit card bill payments made through third-party apps must now go through the Bharat Bill Payment System (BBPS) managed by the National Payments Corporation of India (NPCI). This decision affects credit card users from major banks who will no longer have the option to utilize third-party apps such as CRED, PhonePe, Amazon Pay, and Paytm to pay their bills.

This update will affect customers of banks that have not yet connected to the BBPS system. With the implementation of new regulations, we need to comprehend the definition of BBPS and identify the banks that have not yet partnered with it.

The RBI's instruction is also targeting the supervision of peer-to-peer (P2P) credit card transactions facilitated by third-party apps. Payments made through third-party apps are settled with the bank through NEFT/IMPS or direct transfer, unlike regular credit card transactions where payments are settled directly with the bank. The RBI is said to be uneasy about this setup because it avoids using a centralized platform.

BBPS integration status

By July 1, 2024, a total of 12 banks have already started operating on BBPS.

• SBI

• Kotak Bank

• IndusInd Bank

• IDBI Bank

• AU Small Finance

• Canara Bank

• Bank of Baroda

• Federal Bank

• ICICI Bank

• Union Bank

• Punjab National Bank

• Saraswat Bank

However, several major banks are still working on integrating with BBPS, including:

• Axis Bank

• HDFC Bank

• IDFC First Bank

• Indian Bank

• Indian Overseas Bank

• YES Bank

Banks have created a robust network of external partnerships that offer a range of services to customers. This system enables banks to utilize transaction data for creating strong customer profiles and providing customized services. Banks may be hesitant to integrate with the BBPS network due to the substantial investment needed, which they may not view as offering significant benefits.

The RBI's goal is to improve the payment process and increase regulatory supervision to guarantee the security and transparency of all credit card transactions. Experts also anticipate that within a few months, all banks will effectively incorporate BBPS.