The Reserve Bank of India (RBI) has brought under its direct regulation all entities facilitating cross-border payments for import and export of goods and services. Such entities will be termed as Payment Aggregator-Cross Border (PA-CB)
Further, the central bank has prescribed networth criteria for non-banks providing PA-CB services, as per its circular ‘Regulation of PA - Cross Border’, addressed to all payment system providers and payment system participants.
PAs-CB facilitate cross-border online payments for import and export of permissible goods and services.
The RBI said Authorised Dealer (AD) Category-I banks do not require separate approval for PA-CB activity.
Non-banks providing PA-CB services as on the circular date (October 31) must apply to the RBI for authorisation by April 30, 2024; they will be allowed to continue such services until the RBI decides on their application.
Authorisation for PA-CB activity may be sought for one of three categories — export-only PA-CB, import-only PA-CB, and export and import PA-CB.
As a prerequisite to seeking RBI authorisation, all non-bank PA-CBs (existing as on the date of circular) must register with the Financial Intelligence Unit-India (FIU-IND).
Networth criterion
The RBI said non-banks providing PA-CB services as on the date of circular should have a minimum networth of ₹15 crore at the time of application for authorisation and a minimum networth of ₹25 crore by March 31, 2026.
New non-bank PA-CBs (that is, entities which have not commenced operations before the date of the circular) should have a minimum networth of ₹15 crore at the time of applying I for authorisation and ₹25 crore by the end of the third financial year of authorisation.
The RBI said all existing non-bank PA-CBs that cannot comply with the networth requirement or fail to apply for authorisation within the stipulated time frame, shall wind up PA-CB activity by July 31, 2024.
If the per unit goods/ services imported exceeds ₹2.5 lakh, then the PA-CB concerned must undertake due diligence of the buyer also, the RBI said.
Customer due diligence should be undertaken by the merchant (that is, directly onboarded Indian merchants, e-commerce marketplaces, or entities providing PA services), and proceeds from the Export Collection Account (ECA) shall be settled only in the account of such merchants.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.