RBI issues Master Directions for Payment System Authorisation

The Reserve Bank of India (RBI) has issued Master Directions on Authorisation to operate a Payment System, effective immediately. These directions consolidate instructions from various circulars and government guidelines issued under the Payment and Settlement Systems Act, 2007 (PSS Act). The move aims to enhance clarity, simplify compliance, and ease access for regulated entities.

The consolidated directions include provisions on net-worth computation, voluntary surrender of authorisation certificates, on-tap authorisation, cooling periods for entities, perpetual validity of authorisation certificates, and investment restrictions related to FATF non-compliant jurisdictions. This step is part of RBI's ongoing efforts to streamline regulatory frameworks across its departments.

The Payment and Settlement Systems Act, 2007 empowers RBI to regulate payment systems in India. By consolidating these guidelines, RBI seeks to reduce the compliance burden on payment system operators and ensure better accessibility to regulatory instructions.

The updated framework also addresses voluntary surrender processes for authorisation certificates, ensuring smoother exits for entities no longer wishing to operate payment systems. Additionally, perpetual validity for authorisation certificates simplifies long-term operations for payment system operators.

This initiative reflects RBI's commitment to fostering a transparent and efficient regulatory environment, benefiting both operators and users of payment systems in India.

Key Points
- RBI issued Master Directions for Payment System Authorisation.
- Directions consolidate guidelines under the PSS Act, 2007.
- Includes rules on net-worth, cooling periods, and perpetual validity.
- Effective immediately to simplify compliance and enhance clarity.
- Addresses investment restrictions in FATF non-compliant jurisdictions.

FAQ

What is the purpose of RBI's Master Directions?
To consolidate payment system guidelines for clarity and ease of compliance.

When do the Master Directions take effect?
The directions are effective immediately.