The Reserve Bank of India (RBI) on Tuesday modified its earlier regulations and allowed prepaid payment instruments (PPI) issuers and payment aggregators (PA) to maintain an additional escrow account with a scheduled commercial bank other than the one where they already maintain an account on an ongoing basis.
This has been done to diversify the risk and address business-continuity concerns. Earlier, the rule was to maintain the escrow balance with only one scheduled commercial bank at one point of time.
The RBI said that in cases where an additional escrow account is being maintained, credit and debit from one escrow account to the other shall also be permitted.
However, inter-escrow transfers shall be avoided as far as possible and if resorted to, auditor’s certification shall clearly mention such transactions.
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