RBI directs payment aggregators to undertake due diligence of merchants on boarded

April 16, 2024
Current Context: The Reserve Bank of India (RBI) has recently issued a directive to all payment aggregators to undertake due diligence of merchants on boarded as per RBI’s norms. This is part of RBI’s efforts to regulate the payment ecosystem.
RBI directs payment aggregators to undertake due diligence of merchants on boarded
  • Here are some key points from the directive:
    • The KYC and due diligence norms shall be applicable 3 months from the date of the circular.
    • The due diligence of all merchants by payment aggregators shall be completed by September 30, 2025.
    • The RBI has directed the aggregators to monitor transaction activity of merchants on an ongoing basis.
    • Based on its transaction pattern, the merchant shall be migrated to a higher category of Customer Due Diligence (CDD). 
    • Upon migration, the Payment Aggregator (PA) shall immediately undertake the additional due diligence of the merchant as prescribed in the guidelines.
    • Non-bank payment aggregators have been asked to register themselves with the Financial Intelligence Unit-India (FIU-IND) and provide the needed information as desired by the said unit.
    • As for the Payment Aggregators – physical Point of Sale (PA-P), the RBI has also announced that all the Non-banks providing these services shall now have a minimum networth of Rs 15 crore at the time of authorisation. Moreover, a minimum networth of Rs 25 crore is required by March 31, 2028.
    • In case of all existing non-bank PA-P failing to comply with the above said requirement or do not apply for authorisation within time, the RBI has asked the institutions to wind-up PA-P activity by July 31, 2025.
    • Additionally, the central bank has also asked the banks to close accounts (used for PA activity) of non-bank PA-P by October 31, 2025, unless such PAs produce evidence regarding application for authorisation submitted to the RBI.

Question:

Q.1 What is the minimum net worth required for non-bank Payment Aggregators – physical Point of Sale (PA-P) by March 31, 2028?
a. Rs 15 crore
b. Rs 20 crore
c. Rs 10 crore
d. Rs 25 crore

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