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Requirement of prior RBI approval for non-bank PSOs

Reserve Bank of India (RBI) has reviewed the guidelines for non-bank Payment System Operators (PSOs).

Prior approval of RBI RBI to be intimated
The non-bank PSOs (authorised to operate any Payment System) require prior approval of RBI in the following cases –
  • Takeover / Acquisition of control, which may / may not result in change of management.
  • Sale / Transfer of payment activity to an entity not authorised for undertaking similar activity.
RBI endeavours to respond within 45 calendar days after receipt of complete details from both the seller / transferor non-bank PSO and the buyer / transferee entity. The timeline is not applicable in case of overseas principal in Money Transfer Service Scheme.		 The non-bank PSOs shall inform RBI within 15 calendar days in the following cases –
  • Change in management / directors.
  • Sale / Transfer of payment activity to an entity authorised for undertaking similar activity.

What are the requirements of prior public notice?

Sale / Transfer of payment activity to an entity not authorised for undertaking similar activity Sale / Transfer of payment activity to an entity authorised for undertaking similar activity
After obtaining RBI approval, a public notice of at least 15 calendar days needs to be given before effecting the changes. The entities are required to issue prior public notice at least 15 calendar days before the actual sale / transfer.
Such public notice may be given either separately by the authorised non-bank PSO and the buyer / acquirer bank / non-bank, or jointly by them. The notice to be published in at least one leading national and in one leading local vernacular newspaper (covering the place of the registered office of the respective entities).
The seller / transferor non-bank PSO need to inform all stakeholders (agents, bankers, customers, merchants, etc.) of the changes, at least 15 calendar days before effecting the changes. The seller / transferor non-bank PSO need to inform all stakeholders at least 15 calendar days before the actual sale / transfer.


References

Reserve Bank of India. (2022, July 04). 'Requirement for obtaining prior approval in case of takeover / acquisition of control of non-bank PSOs and sale / transfer of payment system activity of non-bank PSO'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12348&Mode=0


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