Facilitating Cross Border Payment Transactions? Advent of New Regulations for Payment Aggregators

Brief Overview:

The RBI has issued new regulations titled ‘Regulation of Payment Aggregator – Cross Border (PA – Cross Border)’ (“Regulations”) in order to bring all entities facilitating cross-border payment transactions for import and export of goods and services under direct regulation of the RBI. Such entities shall hereinafter be referred to as “PA CBs”.

Technical Details:

1)   All PA – CBs are compulsorily required to obtain authorisation from the RBI; existing non-bank PA-CBs have been given time till 30th April 2024 to apply for such authorisation.
2)   The RBI has also issued new net worth requirements for PA CBs:
(a)  Existing non-bank payment aggregators will need to have a minimum net worth of INR 150,000,000/- at the time of applying for authorization and a minimum net worth of INR 250,000,000/- by 31st March 2026.
(b)  New non-bank PA-CBs must have a minimum net worth of INR 150,000,000/- at the time of submitting application to the RBI for authorisation and shall attain a minimum networth of INR 250,000,000/- by end of the third financial year of grant of authorisation.
(c)  Upon non-compliance with the above requirements, PA-CBs shall wind up PA-CB activity by 31st July 2024.
3)   Import only PA-CBs shall maintain an Import Collection Account (“ICA”) with an authorised dealer category-I scheduled commercial bank (“AD Bank”).
4)   Export only PA-CBs shall maintain Export Collection Account (“ECA”), denominated in Indian Rupees (INR) and / or foreign currency, with an AD Bank.
5)   The maximum value per unit of goods or services that can be sold or purchased PA-CB transactions is INR 2,500,000/-.
6)   All PA-CBs must undertake customer due diligence of merchants and ensure that they do not facilitate payment transactions for import / export of restricted / prohibited goods and services.
7)   AD Banks maintaining ICA / ECA for PA-CB transactions must ensure that all requirements under FEMA, including for reporting and reconciliation of entries in EDPMS / IDPMS, are adhered to.

For further details, please see:

Regulation of Payment Aggregator – Cross Border (PA – Cross Border)

For any queries/clarifications, please feel free to ping us and we will be happy to chat:

●  Mr. Ankit Sinha (ankit.sinha@jclex.com)
●   Mr. Saurabh Sharma (saurabh.sharma@jclex.com)
● Ms. Rupul Jhanjee (rupul.jhanjee@jclex.com)

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