The Reserve Bank of India (RBI) on Tuesday said it has been decided to bring all entities facilitating cross-border payment transactions for import and export of goods and services under direct regulation of the regulator. Such entities, form hereon, shall be treated as Payment Aggregator-Cross Border (PA-CB), the regulator said.
The RBI said that currently authorised dealer (AD) category-1 banks do not require separate approval from the RBI for undertaking cross border payment transactions. However, non-bank entities, which provide PA-CB services as on date, shall apply to the RBI for authorisation by April 30, 2024.
Entities shall be allowed to continue such services till they receive communication from the RBI regarding the decision on their application, the central bank said. Authorisation for PA-CB activity may be sought for any one of the following categories — export only PA-CB, import only PA-CB and export and import PA-CB.
The entities, currently carrying out the activity should also adhere to the regulator’s extant guidelines on governance, merchant on-boarding, customer grievance redressal and dispute management framework, among others, within a period of three months and should be complied with on an ongoing basis thereafter. “Non-adherence to these instructions may lead to the application for authorisation being refused,’ RBI said.
Non-bank payment aggregators, both authorised and those whose applications for authorisation are pending with the RBI, shall advise the Department of Payment and Settlement Systems (DPSS), of RBI within 60 days about their existing PA-CB activity and whether or not they would want to continue it. If they wish to continue, they shall seek an approval from RBI for the same, it said.
If an authorised PA-CB desires to change its activity category, it shall inform DPSS at least 60 calendar days prior to commencement of business in such new activity category. The RBI said such entities shall commence the new business only after approval from the regulator and as a pre-requisite for seeking authorisation from the RBI, all non-bank PA-CBs shall register themselves with the Financial Intelligence Unit-India.
Further, non-banks providing PA-CB services shall have a minimum net worth of Rs 15 crore at the time of submitting application to the RBI for authorisation, and a minimum net worth of Rs 25 crore by March 31, 2026. Entities which are not able to comply with the net worth criteria will have to wind down their business activity by July next year. Lastly, AD category-1 banks undertaking PA-CB activity shall ensure compliance with the requirements for PA-CBs by April 30, 2024, RBI said.