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32 current PAs and 19 new PAs were given in-principle approval by RBI

Published on February 17, 2023
Current context: The Reserve Bank of India (RBI) has given provisional approval for 32 existing and 19 new online non-bank Payment Aggregators (PAs) to operate as online PAs. This move is aimed at bringing online payment aggregation businesses under regulatory oversight.
32 current PAs and 19 new PAs were given in-principle approval by RBI

  • In March 2020 and March 2021, the RBI issued guidelines requiring existing non-bank PAs to apply for authorization to act as online PAs by September 30, 2021, under the Payment and Settlement Systems Act, 2007 (PSS Act).
  • The deadline was later extended to September 30, 2022, for all PAs. The RBI has now granted in-principle approval to the shortlisted applications to act as online PAs.
  • The list of approved existing PAs includes Amazon (Pay) India Private Limited, Google India Digital Services Private Limited, Pine Labs Private Limited, Razorpay Software Private Limited, Reliance Payment Solutions Limited, and Zomato Payments Private Limited, among others.
  • The list of approved new PAs includes Hitachi Payment Services Private Limited, Juspay Technologies Private Limited, Payment Gateway Solutions Private Limited, Tata Payments Limited, and Zoho Payment Technologies Private Limited, among others.
  • The RBI has returned the applications of four aggregators, including Axis Bank-led Freecharge Payment Technologies Private Limited, PayTM Payments Services Limited, PayU Payments Private Limited, and Tapits Technologies Private Limited.
  • Those whose applications have been returned are allowed to reapply to the RBI within 120 days.
  • Existing PAs can continue business unless advised otherwise by the RBI, and new PAs that received in-principle approval is not allowed to commence operations until they are granted "authorisation" under Section 7 of the Payment and Settlement Systems Act, 2007, which requires submission of a System Audit Report (SAR) and a certificate from a Chartered Accountant regarding compliance with the net worth requirement.

Question:

Q.1 Which of the following is a requirement for PAs to obtain authorisation from RBI as per the guidelines issued in March 2020?
a. The promoters/promoter groups of the PA entity should satisfy the ‘fit and proper’ criteria prescribed by RBI.
b. The PA entity should have a minimum net worth of INR 25 crore as per the last audited balance sheet.
c. The PA entity should segregate its payment aggregation business from its e-commerce marketplace business.
d. All of the above.
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