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RBI Identifies Unauthorized BPSP Operations in One Card Network

Published on February 16, 2024
Current Context: On February 15, 2024, the Reserve Bank of India (RBI) stated unauthorized Business Payment Solution Provider (BPSP) operations by one unnamed card network.
RBI Identifies Unauthorized BPSP Operations in One Card Network
  • Key points:
    • Unapproved arrangement: The RBI identified an arrangement facilitated by a card network that allowed businesses to use intermediaries to make card payments to entities that don't accept card payments directly.
    • Concerns: This arrangement raised concerns about bypassing card acceptance protocols and potentially violating the Payment and Settlement Systems Act (PSS Act).
    • Only one network: While the RBI didn't name the specific network, they clarified that only one card network had implemented this arrangement in India so far.
    • Action taken: The RBI directed the unnamed network to stop this unauthorized practice and keep all such arrangements on hold until further investigation.


Q.1 What action did the RBI take against the unnamed card network?
a. Imposed a fine
b. Directed the network to stop the unauthorized practice
c. Took no action
d. Encouraged the practice
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