LI Network
Published on: December 08, 2023 at 16:10 IST
The Reserve Bank of India (RBI) has extended its direct regulatory oversight to all entities facilitating cross-border payment transactions for the import and export of goods and services.
The central bank, in a circular, announced its decision to regulate such entities as Payment Aggregators – Cross Border (PA-CB) under the Payment and Settlement Systems Act.
The RBI’s decision reflects the evolving landscape of cross-border payments, prompting the need for tighter regulation.
Entities involved in facilitating payment and settlement for online cross-border export/import transactions will now be categorized as Payment Aggregator-Cross Border (PA-CB), according to the regulatory directive.
As part of the regulatory framework, non-bank entities offering PA-CB services are required to maintain a minimum net worth of Rs 15 crore when submitting their application for RBI authorization.
Additionally, a minimum net worth of Rs 25 crore must be achieved by March 31, 2026. New non-bank PA-CBs, those yet to commence operations, should have a minimum net worth of Rs 15 crore at the time of application and reach a net worth of Rs 25 crore by the end of the third financial year after authorization.
The circular also outlined a strict timeline for compliance, stating that existing non-bank PA-CBs unable to meet the net worth requirement or failing to apply for authorization within the specified timeframe must wind up their PA-CB activities by July 31, 2024.
Regarding import and export transactions processed by PA-CBs, the RBI specified that the maximum value per unit of goods or services sold should not exceed Rs 25,00,000, ensuring a regulated and transparent framework for cross-border payment transactions.
