The Indian Bill payment service system is a conceptualised system made by the Reserve Bank of India and is regulated by National Payment Cooperation of India (NPCI). The NPCI allows the Integrated, easily accessible and interoperable payment service to the people working inside the geographical boundaries of India by providing them safe transaction methods and reliable system for protection of their payments and personal interest of the people at large. The bill payment service works through a network of agents, bank branches, Retail shops and through e-platforms like Net- Banking, apps, payment websites regulated by govt. bodies and Non- banking entities.

The person making any bill payment can access any payment channel so provided by the govt. agencies, in form of Banking and Non- banking entities which are registered on Bharat Bill Payment System. The Bharata bill payment system is also known as the ‘Bharat BillPay’. The Bill Payment Market is characterised by the regulation of aggregators and multiple billers who are present across India to assist the people for accessing various bill payment methods facilities so created by the Government on India.

The basic guidelines formed by the RBI to regulate the interoperable bill payment system make instant bill payment very handy. This system works through the integrated billers, e-wallets and banks which are all available on a single platform.


The bill payment service agreement highlights the rights and responsibilities of the user towards the bill payment. The Bill Payment Service Agreement is an agreement/ contract entered into between the parties who want to make payment (party making payment is known as Biller) and the bank through which such payment is being made (Service). According to Section 25 of the payment and settlement act, 2007 A person shall be held liable for failure of any payment so made and according to Section 138 of the Negotiable Instruments Act, if the person fails to make payment due to insufficiency of the account balance. The Bill Payment Service permits users to use device connected to Internet for making direct payment from their designated Bill Pay Account to any business, individuals or third party.

The Bill Pay Account so used must be a in a format of checking account. All payments made will be deducted from the account of the person making payments through the Bill Payment Service. There should be availability of enough funds in the account during the time of such bill payment. Bill payment can be saved to one -time payment method. According to which, user can make a payment on that day itself when he/ she enter payment details or can schedule a payment for a future date.

In recurring payment method, payments can be scheduled to be made weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annually, or annually automatically without entering details again or advancing payment request again with the banking or non-banking institute. The Characteristics of the ‘Bharat BillPay’ system are:

  1. The system is Interoperable:

It connects business entities such as banking and non-banking entities on a single platform for operating bills, biller management, payment services etc.

  1. Easily accessible across the country:

Provides easily accessible payment system through the means of e-platform or physical modes of payment

  1. Cost- effective:

It involves flat fee charges against current charges making it highly cost effective.

  1. It is an integrated system:

Banking and Non- banking entities have to connect their system with the Bharat bill payment central units (BBPCU) system to get access and availability to users across India. 

  1. Has good complaint and dispute management:

Is facilitated by effective user grievance handling system and resolve dispute arsing out of transaction made under the Bharat Bill Payment System.

  1. Effective Clearing and settlement mechanism:

It has established a standardised turnaround time for multiple clearing and guarantee system.

  1. Standardisation set by the regulatory bodies:

All the activities which take place in Bharat Bill Payment System are standardised by the appropriate governmental bodies.



RBI has approved 5 categorise of billers on the Bharat Bill Payment System which are Electricity, water bill, Gas supply, DTH and telecom. Payment to such categorised is aided by digital channel of payment and physical channel of payment. The digital channels or the e-channels includes internet banking, Mobile banking, point of sale etc., and the physical channels includes the Bank branch, agents and business correspondents. There are 11 payment modes available for the user to access. A user may choose to schedule a payment to repeat in the same amount on a regular interval’s basis. If the Account of the payee does not have sufficient funds to make a payment on date of payment so the transfer or payment will be cancelled and no further attempt will be accepted. Any cancellation or changes should be made through the bill payment service. There might arise some circumstances which are beyond control so because of which some transactions may take longer to be processed but it is guaranteed by the system that even though It is taking longer to process the transaction it still will be completed by the service provider until the payee cancels such payment before completion.      


The things which are included in bill payment service agreement are:

  1. Scheduling payment clause:

According to this clause, payment is scheduled for a date which is decided to pay online within four or less business days, according to what is agreed between the parties.

  1. Service guarantee clause:

According to this clause, service that is banking and non- banking institutes guarantees the user that they will bear responsibility for any late payment and will compensate the user for the any damages arising out of the same. 

  1. Security of access credentials clause:

According to this clause, Service that is banking and non- banking institutes does not guarantee or take responsibility where the password or means to access of account is given to an unauthorized person or any third party.

  1. Liability for unauthorised transfer clause:

According to this clause, the Service that is banking and non- banking institutes states that in case of any access credential which has been lost or stolen or some unauthorized transfer has been made, then it should be brought to the  notice of service immediately within the reasonable time.

  1. Bill payment authorization and payment remittance clause:

According to this clause, all the people who want to authorize the Service to make payment to any person or entity, then all information related to the person about his/ her name and address should be provided to the service for executing such payment. 

  1. Expedited payment clause:

According to this clause, accelerated payment, which can be cheque sent overnight, or same day electronic payment. 

  1. Disclosure of information to third party clause:

According to this clause, all information given to the service is confidential however, the information about the accounts and transaction can be disclosed to a third party for legal purposes.

  1. Amendments clause:

According to this clause, any changes made by the Service like update, add, delete, or revisions in this agreement will be notified to the user

  1. Address changes clause:

According to this clause, all contact information about the user and the third party should be true, up to date and accurate.

  1. Service termination, cancellation, or suspension clause:

According to this clause, grounds of termination, suspension or cancellation and the consequence of termination are specified.

  1. Information authorization clause:

According to this clause, all the necessary information regarding identity of the user should be verified by the Service in order to get the enrolment and trusted personality receiving services.

  1. Indemnity clause:

According to this clause, reimbursement of all loss, damages, caused due to the third party, including attorney fees is specified.

  1. Disputes clause:

According to this clause, manner in which the any dispute which arises should be resolved, which party will appoint the mediator and will decide the place where the dispute would be resolved are specified.


Bengaluru-560 025 vs Sri. K. Ramamanohar Reddy

In this case an e-fund transfer payment was returned dishonoured, and the accused did not respond to any legal notice served to him by the complainant. So, the accused was convicted for an offence under Section 25 of Payment and Settlement Systems Act, 2007 with reference to Section 138 of the Negotiable Instrument Act. The court held the accuse liable to pay a fine or face imprisonment for a period of five months.