The second round covers revisions and updates to KYC and due diligence of retailers, operations in escrow accounts, and many others, and are meant to additional strengthen the cost ecosystem, the central financial institution mentioned.
RBI had, in September 2022, introduced regulation of offline PAs who deal with proximity / face-to-face funds. The regulator has sought feedback and suggestions on the draft round Could 31, 2024.
The funds ecosystem in India contains on-line PAs (PA – O) and people which facilitate face-to-face or proximity cost transactions ((PA – P). “An authorised non-bank PA-O (or PA-P) which desires to start bodily (or on-line) PA exercise (because the case could also be), shall search approval from Division of Cost and Settlement Methods (DPSS), RBI, CO previous to graduation of such enterprise,” RBI mentioned.
Compliance deadline
The draft tips mandate PA-P banks to adjust to the ultimate norms inside three months of situation whereas non-bank entities offering PA-P providers might want to inform RBI about their intention to hunt authorisation inside 60 days of the round being issued and submit an utility by Could 2025.
Non-bank PA-Os too may also want to hunt RBI’s approval inside 60 days in the event that they want to proceed their PA-P operations.
Non-banks offering PA-P providers will want a minimal internet value of ₹15 crore on the time of utility and a minimal internet value of ₹25 crore by March 31, 2028. New non-bank PA-P will want minimal internet value of ₹15 crore on the time utility and shall be required to develop it to ₹25 crore by finish of the third monetary yr of grant of authorisation.
“Current non-bank PA-P which aren’t in a position to adjust to the web value requirement or don’t apply for authorisation inside the stipulated timeframe, shall wind-up PA-P exercise by July 31, 2025,” RBI mentioned.
Within the second round, RBI mentioned that non-bank PAs shall be permitted to interact brokers to help their retailers for onboarding, topic to a Board authorised coverage and correct due diligence of the brokers.
It additionally mentioned that for face-to-face / proximity cost transactions accomplished utilizing playing cards, no entity within the card transaction / cost chain, apart from the cardboard issuers or card networks, shall retailer the card-on-file information from August 1, 2025.
“Any such information saved beforehand shall be purged. For transaction monitoring and / or reconciliation functions, entities can retailer restricted information – final 4 digits of card quantity and card issuer’s title – in compliance with the relevant requirements,” it mentioned.
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