RBI mandates regulatory approval for PoS providers to continue operations
MUMBAI : The Reserve Bank of India (RBI) has proposed that non-banks offering physical point of sale services (PoS) must notify the regulator of their intent to seek authorization within 60 days, and then submit their application by 31 May 2025, for approval to continue operations. “…they shall be allowed to continue their operations till they receive communication from the RBI regarding (the) fate of their application," the regulator said in a draft circular late on Tuesday.
The central bank said that existing non-bank physical payment aggregators (PA-P) failing to meet the net worth requirements or not applying for authorization within the specified timeframe must cease operations by 31 July 2025. It has directed banks to close the accounts associated with the PA activities of these non-banks by 31 October 2025, unless evidence of a submitted authorization application is provided.
In September 2022, the RBI had said that payment aggregators play an crucial role in the payments ecosystem and were thus brought under regulations in March 2020. However, the regulations are only applicable to those processing online or e-commerce transactions and not offline payments.
The new draft seeks to harmonise regulations between the two sets of service providers. In line with this expanded regulatory framework, non-bank PoS providers in the online domain are now required to seek approval from the Department of Payment and Settlement Systems (DPSS) of the regulator within 60 calendar days to continue their business.
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