RBI’s new guidelines for payment activities

Non-bank payment system operators (PSOs) will require prior approval of the RBI for any takeover or acquisition of control, which may or may not result in change of management.

They would also require prior approval of the RBI for sale or transfer of payment activity to an entity not authorised for undertaking such an activity

This follows a review of the operations of non-bank PSOs authorised to operate any payment system by the RBI.

The non-bank PSOs shall inform the RBI within 15 calendar days in the following cases: change in management or directors and sale or transfer of payment activity to an entity authorised for undertaking similar activity.

This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect.

For acquisition or takeover

In the case of an acquisition or takeover, the transferor non-bank PSO would submit an application to the RBI with information about the proposed directors and complete details about the new shareholders.

In case of sale or transfer of payment activity, the seller or transferor non-bank PSO shall apply to the RBI for obtaining prior approval along with the minimum appropriate details.

RBI shall endeavour to respond within 45 calendar days after receipt of complete details from both the entities. The timeline is not applicable in case of overseas principal in Money Transfer Service Scheme.

Further, after obtaining RBI approval, a public notice of at least 15 calendar days shall be given before effecting the changes.