The Reserve Bank of India earlier this week said all entities facilitating cross border payment transactions for import and export of goods and services will be directly regulated by it.
New Delhi: Several FinTech firms, including PayaPal, have expressed concern as their operations will be impacted after RBI’s new guidelines on cross-border payment transactions. The Reserve Bank of India earlier this week said all entities facilitating cross border payment transactions for import and export of goods and services will be directly regulated by it.
The central bank sad 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.
At present, the Payment Aggregators (PAs), which facilitate processing of domestic transactions in online mode, are covered within the scope of RBI guidelines.
The central bank has issued fresh operating guidelines for payment aggregators who want to offer payment services to importers and exporters.
List of new Guidelines:
- Fresh norms for KYC of merchants.
- Stringent net worth criteria have been laid out.
- All non-banks operating in this space need to mandatorily register with the Financial Intelligence Unit of India.
- Even existing payment aggregators need to get an explicit nod from RBI to continue cross-border payments
With these new guidelines, the payment fintech serves export and import merchants will be impacted. PayPal, which had left the Indian domestic payments space to focus on cross-border remittance, is among the major global players that will also be affected.
Earlier this week, the RBI said all entities facilitating cross border payment transactions for import and export of goods and services will be directly regulated by it.
“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.
The RBI in the new guidelines said non-banks providing PA-CB services as on the date should have a minimum net worth of Rs 15 crore at the time of submitting application to the RBI for authorisation and a minimum net worth of Rs 25 crore by March 31, 2026.
And the new non-bank PA-CBs (entities which have not commenced operations) should have a minimum net worth of Rs 15 crore at the time of submitting application and should attain a minimum net worth of Rs 25 crore by the end of the third financial year of grant of authorisation.