RBI: New guidelines for payment activities
The Reserve Bank of India (RBI) issued new guidelines for payment activities in India. Guidelines were issued under Section 10 (2) & Section 18 of “Payment and Settlement Systems Act of 2007”.
What are the new directives?
- Non-bank payment system operators (PSOs) will need to take approval of the central bank before the takeover or acquisition of control, which may or may not change the management.
- PSOs would also need to take approval from central bank, before the sale or transfer of payment activity to any entity, which is not authorised to undertake such payment activity.
- After this, RBI will review the operations of non-bank PSOs, that are authorised to operate any payment system.
Information to be provided to RBI
The non-bank PSOs are mandated to inform the RBI within 15 days in following circumstances:
- Change in directors or management: In case of acquisition or takeover, non-bank or transfer PSO are mandated to submit an application to the central bank with information about the proposed directors and complete details about the new shareholders.
- Transfer or Sale of payment activity to an entity, that have been authorised to undertake similar activity. In this case, seller or transferor non-bank PSO are mandated to apply to the central bank, in a bid to obtaining prior approval and minimum appropriate details.
Response from RBI
RBI will respond to applications within 45 days after receiving complete details from both the entities. This timeline is not applicable to overseas principal under the Money Transfer Service Scheme. These changes can come into effect after a public notice of some 15 days, following RBI’s approval.
Payment System Operators (PSOs)
PSOs are institutions, which have been authorized to operate payment system. They outsource their payment and settlement-related activities for several other entities.
Month: Current Affairs - July, 2022
Category: Economy & Banking Current Affairs - 2024