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Business News/ Economy / RBI to directly regulate entities facilitating cross border payment transactions
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RBI to directly regulate entities facilitating cross border payment transactions

The Reserve Bank of India, on Tuesday, announced it would directly regulate entities facilitating cross border payment transactions for import and export of goods

Reserve Bank of India to directly regulate entities facilitating cross border payment transactionsPremium
Reserve Bank of India to directly regulate entities facilitating cross border payment transactions

The Reserve Bank of India will directly regulate all entities facilitating cross-border payment transactions for the import and export of goods and services, the central bank said in a circular on Tuesday. 

As per the circular, such entities will be treated as Payment Aggregator-Cross Border (PA-CB).

"Keeping in view the developments that have taken place in the area of cross-border payments, it has been decided to bring all entities facilitating cross-border payment transactions for import and export of goods and services under direct regulation of the RBI," it said.

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Currently, all Payment Aggregators (PA), which facilitate the processing of domestic transactions in online mode, come under the ambit of RBI regulations.

The RBI clarified the minimum net worth of non-banks providing the service of payment aggregators. According to the new circular, RBI made it mandatory for the non-banks providing PA-CB services to have a minimum net worth of 15 crore at the time of applying to the RBI for authorisation and a minimum net worth of 25 crore by March 31, 2026.

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The circular also prescribed the procedures for handling online transactions by the PAs. For new non-bank PA-CBs, it is mandatory for them to have a minimum net worth of 15 crore at the time of applying and should attain a minimum net worth of 25 crore by the end of the third financial year of grant of authorisation.

"In respect of import and export transactions processed by PA-CBs, the maximum value per unit of goods / services sold/purchased shall be 25,00,000," the circular said.

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The RBI, in its circular, also laid procedures for the handling of online transactions by the PAs. It also said banks undertaking PA-CB activity need to fulfil the requirements for  PA-CBs by April 30, 2024.

Payment Aggregators act as a bridge between e-commerce sites and customers for payment transactions. PAs let e-commerce sites and merchants accept various instruments from customers to complete their payment obligations. This saves merchants from creating their systems. A common payment transaction by a customer involves PAs getting payment from customers, pooling, and transferring them to the merchants.

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Published: 31 Oct 2023, 09:45 PM IST
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