The Reserve Bank will from now on regulate non-bank payments aggregators.
Besides, existing non-bank PAs will be required to submit an application seeking authorisation on or before June 30, 2021.
In its “Oversight Framework for Financial Market Infrastructures and Retail Payment Systems” released on Saturday, the RBI said: “With a view to safeguard the interests of the customers and users and to ensure that the payments made by the intermediaries using electronic or digital or online payment modes were duly accounted for by the intermediaries receiving such payments and transmitted to the accounts of the merchants or to similar other entities, certain guidelines were issued to banks and payment system operators for addressing a few aspects of the functioning of intermediaries.”
As such, RBI said that these entities were not subjected to direct regulations for outsourcing arrangements were made applicable to them.
“Based on the feedback received on the discussion paper and taking into account the important functions of the intermediaries in the online payments space as also keeping in view their role vis-a-vis handling funds, it was decided to (a) regulate in entirety the activities of PAs, and (b) provide baseline technology-related recommendations to PGs.
“Accordingly, the RBI shall regulate and supervise non-bank PAs and the existing non-bank PAs are also required to submit an application seeking for authorisation on or before June 30, 2021. On the other hand, the PGs shall be considered as technology providers or outsourcing partners of banks or non-banks, as the case may be and have been prescribed to put in place certain baseline technology related cybersecurity controls,” the RBI said.
The latest document for FMIs (Financial Market Infrastructures) and RPSs has been updated to incorporate the supervisory framework for the payment system entities.
“This document, by enhancing supervisory transparency and disclosure, would enable better regulatory compliance by payment systems operators, and enhance customer awareness, eventually contributing to the safety and stability of our payment systems,” the RBI said in the statement.