**Summary:**
This policy directive, issued by the Reserve Bank of India (RBI) on December 4, 2020, introduces a "Cooling Period" for entities seeking authorization to operate a payment system under the Payment and Settlement Systems Act, 2007 (PSS Act). This measure aims to promote discipline among Payment System Operators (PSOs), encourage serious applications, and optimize the use of regulatory resources.
The Cooling Period of one year will be enforced from the date of:
* Revocation or non-renewal of an Authorized Payment System Operator's (PSO) Certificate of Authorization (CoA).
* Voluntary surrender of a CoA.
* Rejection of an application for payment system authorization by the RBI.
* For new entities set up by promoters involved in any of the above categories, the definition of promoters for this purpose shall be as defined in the Companies Act, 2013.
Entities whose applications are returned by the RBI will be given an additional opportunity to submit before the Cooling Period is invoked.
During the Cooling Period, entities are prohibited from submitting new applications for operating any payment system under the PSS Act.
This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
For further information, contact the Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400001. Tel: 91-22-2260 1000; Fax: 91-22-2265 9566; email: cgmdpsscorbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the country's financial system.
Payment and Settlement Systems Act, 2007: An act of the Indian Parliament that provides for the regulation and supervision of payment systems in India.
Non-bank Payment System Operators: Entities authorized by the Reserve Bank of India to operate payment systems but are not banks.
Oversight Framework for Financial Market Infrastructures and Retail Payment Systems: A framework issued by the Reserve Bank of India on June 13, 2020, to oversee financial market infrastructures and retail payment systems.
Payment and Settlement Systems Regulations, 2008: Regulations defined in relation to the Payment and Settlement Systems Act, 2007.
Companies Act, 2013: An act of the Parliament of India that regulates incorporation of companies, responsibilities of a company, directors, dissolution of a company and other aspects.
Mumbai, Maharashtra: City in India where the Central Office of the Department of Payment and Settlement Systems of the Reserve Bank of India is located.
P Vasudevan: Chief General Manager at Reserve Bank of India.
भारतीय�रज़वर्बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2020-21/73
DPSS.CO.OD.No.753/06.08.005/2020-21 December 4, 2020
The Chairman / Managing Director / Chief Executive Officer
Non-bank Payment System Operators
Madam / Dear Sir
Authorisation of entities for operating a Payment System under the Payment and
Settlement Systems Act, 2007 (PSS Act) – Introduction of Cooling Period
Please refer to provisions contained in Section 4 of PSS Act and ‘Oversight Framework for
Financial Market Infrastructures and Retail Payment Systems issued on June 13, 2020’, in
terms of which any person before commencing or operating a payment system shall obtain
authorisation from the Reserve Bank and for the purpose shall apply in a prescribed format to
RBI as defined in Payment and Settlement Systems Regulations, 2008.
2. To inculcate discipline and encourage submission of applications by serious players
as also for effective utilisation of regulatory resources, it has been decided to introduce the
concept of Cooling Period in the following situations –
a) Authorised Payment System Operators (PSOs) whose Certificate of Authorisation
(CoA) is revoked or not-renewed for any reason; or
b) CoA is voluntarily surrendered for any reason; or
c) Application for authorisation of a payment system has been rejected by RBI.
d) New entities that are set-up by promoters involved in any of the above categories;
definition of promoters for the purpose, shall be as defined in the Companies Act, 2013.
3. The Cooling Period shall be for one year from the date of revocation / non-renewal /
acceptance of voluntary surrender / rejection of application, as the case may be. In respect of
entities whose application for authorisation is returned for any reason by RBI, condition of
Cooling Period shall be invoked after giving the entity an additional opportunity to submit the
application.
भुगतान और िनपटान �णाली िवभाग, क��ीयकायार्लय, 14वीमंिजल, क��ीयकायार्लयभवन,शहीदभगत�संहमागर्, फोट,र् मुम्बई – 400001
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, ShahidBhagat Singh Road, Fort, Mumbai – 400001
फोनTel: (91-22) 2260 1000; फैक् सFax: (91-22) 2265 9566; ईमेल-e-mail : cgmdpssco@rbi.org.in
�हदं ी आसानह,ै इसका�योगबढ़ाइए4. During the Cooling Period, entities shall be prohibited from submission of applications
for operating any payment system under the PSS Act.
5. This directive is issued under Section 10(2) read with Section 18 of Payment and
Settlement Systems Act, 2007 (Act 51 of 2007).
Yours faithfully,
(P Vasudevan)
Chief General Manager