RBI issues draft norms for trade via e-com mode

The Reserve Bank of India (RBI) has issued draft guidelines for settlement of payments for export/import through e-commerce i.e. buying and selling of goods and services, including digital products, conducted over digital and electronic networks, and called for feedback by April 24.

In November 2009, the Department of Payment and Settlement Systems (DPSS) of the RBI recognised that the use of electronic/online modes of payments to merchants for goods and services like bill payments, online shopping, etc. has been gaining popularity in the country. With a view to safeguard the interests of the customers and to ensure that the payments made by them using electronic/online payment modes are duly accounted for by the intermediaries receiving such payments and remitted to the accounts of the merchants who have supplied the goods and services without undue delay, the DPSS framed suitable directions for the safe and orderly conduct of these transactions.

In November 2010, the RBI noted that the Online Payment Gateways Service Providers (OPGSP) have emerged as the popular channels for facilitating cross-border transactions also by maintaining notional collection accounts for exporters. The RBI decided to allow the Authorised Dealer Category - l banks to offer the facility of repatriation of export-related remittances by entering into standing arrangements with OPGSPs, subject to certain conditions that included opening a separate NOSTRO collection account for each OPGSP for receipt of the export related payments facilitated through such arrangements. This facility was limited to export of goods and services up to $500 only. This limit was raised to $3,000 in October 2011 and to $10,000 in June 2013.

In 2015, the RBI allowed the OPGSPs to open collection accounts for imports via e-commerce also and prescribed several conditions that included permissible debits and credits in the export and import collection accounts maintained by the OPGSPs. The limit for each import transaction was capped at $2,000 only. The RBI said domestic entities functioning as intermediaries for electronic payment transactions in terms of the guidelines stipulated by DPSS and intending to undertake cross-border transactions should maintain separate accounts for domestic and cross border transactions.

After receiving feedback from stakeholders on a discussion paper placed on the RBI website regarding guidelines for regulation of Payment Aggregators (PAs) and Payment Gateways (PGs) and taking into account the important functions of these intermediaries in the online payments space as also keeping in view their role vis-à-vis handling funds, the DPSS issued guidelines in March 2020 and March 2021 to regulate in entirety the activities of PAs and provide baseline technology-related recommendations to PGs. These included the criteria for authorisations, capital/net-worth requirements, governance standards, safeguards against money laundering, merchant on-boarding, settlements and escrow account management, security related recommendations, grievance redressal and so on.

Last week, the RBI issued draft guidelines for processing and settlement of small value export- and import-related payments facilitated by OPGSPs, now renamed as Online Export-Import Facilitators (OEIF). The limits are proposed to be raised to $3,000 for import transactions and to $15,000 for export transactions.

The roles and responsibilities of the banks and OEIF and the disciplines for operating the import and export collection accounts are clearly spelt out. The reference in the guidelines to Merchandise Exports from India Scheme abolished in January 2021 is unnecessary.

Email:tncrajagopalan@gmail.com