RBI issues norms for voluntary surrender of licence by PSOs

According to the PSS Act, 2007, it is mandatory to seek authorisation from the Reserve Bank to commence or operate a payment system in the country

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The Reserve Bank of India on Thursday issued guidelines for voluntary surrender of licence by payment system operators (PSOs) under Payment & Settlements Systems (PSS) Act.

According to the Payment and Settlement Systems Act, 2007 (PSS Act), it is mandatory to seek authorisation from the Reserve Bank to commence or operate a payment system in the country.

RBI said the option of voluntary surrender of Certificate Of Authorisation (COA) is available only to those entities which have either not commenced Payment System operations or intend to discontinue such operations.

For entities already into the operations, RBI said they will need to request in writing about the intent and reason for voluntary surrender of the licence.

They will also have to furnish details about escrow account, outstanding escrow amount and liabilities to merchants.

They will have to clearly state about not incurring any fresh liability during the process of drawing down of payment system operations. “In case of MTSS — Overseas Principals, the process should be followed in respect of liabilities to customers and Indian Agents,” the RBI said.

For entities who have not commenced operations as PSO, the RBI said they need to submit the relevant documents to Department of Payment and Settlement Systems of the RBI.

The Reserve Bank said, it had been receiving requests from PSOs -- Pre-paid Payment Instrument (PPI) Issuers and Money Transfer Service Scheme (MTSS)–Overseas Principals, for surrendering and consequent cancellation of the COA on voluntary basis.

The guidelines for voluntary surrender of COA are applicable to Payment System Operators -- PPI issuers, MTSS- Overseas Principal.