**Executive Summary:**
These guidelines, issued by the Reserve Bank of India (RBI), outline the process for Payment System Operators (PSOs) authorized under the Payment and Settlement Systems (PSS) Act of 2007 to voluntarily surrender their Certificate of Authorisation (COA). The guidelines apply to PPI issuers and MTSS Overseas Principals who have either not commenced operations or intend to discontinue them. The document details the steps PSOs must take, including documentation, public notices, and extinguishing liabilities.
**Key Points / Main Content:**
* **Applicability:**
* These guidelines apply to PPI issuers and MTSS Overseas Principals authorized under the PSS Act 2007.
* The option is available to entities that have either not commenced Payment System operations or intend to discontinue such operations.
* **Process for Entities That Have Commenced Operations:**
* Submit a written request, Board Resolution copy, and a Chartered Accountant-certified statement of outstanding PPIs/liabilities to the RBI.
* Provide a Memorandum of Procedure (MoP) detailing the process for repaying customer/merchant liabilities, including timelines.
* MTSS Overseas Principals should follow the same process for liabilities to customers and Indian Agents.
* Provide an undertaking that no fresh liabilities will be incurred during the drawdown.
* Issue public notices in English, Hindi, and a vernacular language, informing customers/merchants about the intent to close operations, redemption options, and contact information for a Nodal Officer.
* Submit monthly progress reports to the RBI on extinguishing liabilities.
* For PPI issuers, the RBI will advise the Escrow account bank for a one-time refund to PPI holders' bank accounts.
* Submit a "No liability certificate" from a Chartered Accountant upon completion.
* Submit the original COA to CGM, DPSS, CO, Mumbai for cancellation upon acceptance of the surrender request.
* **Process for Entities That Have Not Commenced Operations:**
* Submit a written request, Board Resolution copy, and supporting documents (e.g., cancellation of project) to the RBI.
* Provide a certificate from a Chartered Accountant confirming non-commencement of operations.
* Submit a copy of the latest audited balance sheet.
* Submit the original COA to CGM, DPSS, CO, Mumbai for cancellation upon acceptance of the surrender request.
**Impact Analysis**
* **Payment System Operators (PPI Issuers, MTSS Overseas Principals):**
* *Impact:* Those wishing to voluntarily surrender their COA must follow the prescribed procedures, which include documentation, public notifications, and liability settlements.
* *Action Required:* Prepare and submit required documents, issue public notices, extinguish liabilities, and submit the original COA.
* **Customers/Merchants of PSOs:**
* *Impact:* Need to be informed about the closure of payment system operations and provided with a process to redeem outstanding balances.
* *Action Required:* Respond to public notices, submit requests for refunds within the stipulated timeline, and follow up with the Nodal Officer if needed.
* **Reserve Bank of India (RBI):**
* *Impact:* Responsible for processing requests for voluntary surrender of COA, overseeing the process, and advising entities.
* *Action Required:* Review submitted documents, advise entities on required actions, monitor progress, and process the cancellation of COAs.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the payment and settlement systems in the country.
Payment and Settlement Systems Act, 2007: An act of the Indian Parliament that provides for the regulation and supervision of payment systems in India.
Payment System Operators: Entities authorized under the Payment and Settlement Systems Act, 2007 to operate a payment system in India.
Prepaid Payment Instrument Issuers: Entities that issue prepaid payment instruments (PPIs) as part of the payment system.
Money Transfer Service Scheme: A scheme for facilitating cross-border money transfers.
Mumbai, Maharashtra: The city where the Central Office of the Department of Payment and Settlement Systems of the Reserve Bank of India is located.
Department of Payment and Settlement Systems, Central Office: A department within the Reserve Bank of India responsible for regulating and supervising payment and settlement systems.
Nanda S. Dave: Chief General Manager at Reserve Bank of India
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2015-16/396
DPSS.CO.AD. No.2627/02.27.005/2015-16 May 12, 2016
To,
All entities authorised under the Payment & Settlement Systems Act, 2007 (PSS Act)
Dear Sir/Madam,
Guidelines for Voluntary surrender of Certificate of Authorisation (COA) by
Payment System Operators (PSOs) authorised under PSS Act 2007
As you are aware, in terms of section 4 of the Payment and Settlement Systems Act,
2007 (PSS Act) it is mandatory to seek authorisation from the Reserve Bank of India
(the Bank) to commence or operate a payment system in the country. Section 8 of
the PSS Act empowers the Bank to revoke such authorisation under circumstances
as provided therein.
2. We have been receiving requests from PSOs namely Pre-paid Payment
Instrument (PPI) Issuers and Money Transfer Service Scheme (MTSS) – Overseas
Principals, for surrendering and consequent cancellation of the COA on voluntary
basis. Based on the experience gained so far, the Bank is issuing these Guidelines
for voluntary surrender of CoA by such entities authorised under the PSS Act, 2007.
3. Applicability
These guidelines for voluntary surrender of CoA are applicable to Payment System
Operators, namely PPI issuers, MTSS- Overseas Principal, authorised under PSS
Act 2007. This option of voluntary surrender of COA is available only to those entities
which have either,
भुगतान और िनपटान �णाली िवभाग, क��ीय कायार्लय, 14वी मंिजल, क��ीय कायार्लय भवन,शहीद भगत �सह माग,र् फोटर्, मुम्बई - 400001
फोन Tel: (91-22) 2260 1000; फैक् स Fax: (91-22) 2265 9566; ई मेल-e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai -
400001
�हदी आसान ह,ै इसका �योग बढ़ाइएa) not commenced Payment System operations, or
b) intend to discontinue such operations.
4. Process to be followed by the PSO:
I. Entity has commenced PSO operations:
1. Such an entity needs to submit the following documents to Department
of Payment and Settlement Systems, Central Office, Reserve Bank of
India, Mumbai :
a) A request in writing by its authorised signatory, along with a
copy of its recent Board Resolution, indicating its intent and the reason
for such voluntary surrender of COA.
b) A statement certified by its Chartered Accountant in respect of
number and amount of outstanding PPIs. Such statement should also
indicate the name of its Escrow account details, outstanding Escrow
amount, and liabilities to merchants.
c) A ‘Memorandum of Procedure (MoP)’ interalia, indicating the
process to be adopted for extinguishing/ repaying the liabilities to the
customer/merchants. This should also include the processes and time-
line for extinguishing the liabilities outstanding to the
customer/merchants.
d) In case of MTSS - Overseas Principals, the above process
should be followed in respect of liabilities to customers and Indian
Agents.
e) An undertaking duly signed, by its authorised signatory, and
clearly stating that it would not incur any fresh liability during this
process of drawing down of Payment system operations.
2. Based on the merits of the case, the Bank will process such requests
and advise the entity to initiate the following process as applicable:
i. Issue a public notice in English, Hindi and a vernacular
language, in print/visual media, on three different occasions, informing
the customer/merchants about its intent to close its payment systems
operations. Such public notice, shall interalia indicate,
Page 2 of 4• That the customers can either use the balances on PPI or obtain
refund, by credit to a bank account, within a stipulated time-line by
making a request to the company.
• The mode of receipt of such requests for redemption.
• Name, contact address, phone number and email id of a Nodal
officer to whom such requests can be sent by the customer.
• Time-line within which the company would redeem the balance
after receipt of request from the customer.
ii. Submit monthly progress report to the Bank regarding the progress in
extinguishing the customer/merchant liabilities. The format of such report
shall be as per format prescribed in circular DPSS.CO.OSD.No.
1381/06.08.001/2010-11, dated December 27, 2010.
3. In case of authorised MTSS- Overseas Principals, the above process,
as applicable, should be followed in respect of liabilities to customers and
Indian Agents.
4. For refund to the customers of a PPI issuer, the Bank would also
advise the respective Escrow account bank for allowing one time refund of
the balance to the PPI holder’s bank accounts.
5. On completing the process of extinguishing the liability to
customers/merchants the entity would be required to submit a ‘No liability’
certificate from its chartered accountant to the Bank.
6. Based on the information submitted, the Bank will process the request
for cancellation of such COA.
7. On receipt of the advice from the Bank about acceptance of the
request for voluntary surrender of COA, the entity shall submit the original
COA to CGM, DPSS, CO, Mumbai for cancellation.
II. Entity has not commenced operations as a PSO:
1. Such an entity needs to submit the following documents to Department
of Payment and Settlement Systems, Central Office, Reserve Bank of India,
Mumbai:
i. A request in writing by its authorised signatory, along with a
copy of its recent Board Resolution, indicating its intent and the reason
for such voluntary surrender of COA.
Page 3 of 4ii. Any other documents (like cancellation of the associated project,
etc.) in support of its intent for such voluntary surrender.
iii. A certificate from its chartered accountant in respect of non-
commencement of any payment system operations by the entity
iv. A copy of the latest audited balance sheet of the entity.
2. Based on the information submitted, the Bank will process the request
for cancellation of such COA.
3. On receipt of the advice from the Bank about acceptance of the
request for voluntary surrender of COA, the entity shall submit the original
COA to CGM, DPSS, CO, Mumbai for cancellation.
5 These directions are issued by the Bank, in exercise of the powers conferred
by section 18 of the Payment and Settlement Systems Act, 2007 (Act 51/2007)
Yours faithfully
(Nanda S. Dave)
Chief General Manager
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