The Reserve Bank of India has asked non-bank lenders to apply for a payment aggregator licence so as to offer cross-border trade settlement.
These entities are required to seek a licence under any one of these categories—export, import, or both import and export—at the latest by April 30, 2024, the RBI circular said on Tuesday.
Those entities, which are already offering cross-border trade settlement services, must have a minimum net worth of Rs 15 crore at the time of application. By March 31, 2026, the minimum net worth of entities seeking a licence must be Rs 25 crore.
The non-bank lenders, which do not have any existing business in the segment, must have a minimum net worth of Rs 15 crore at the time of application. At the end of three financial years of approval, the entity must attain a minimum net worth of Rs 25 crore.
"All existing non-bank PA-CBs (payment aggregators, cross-border), which are not able to comply with the net worth requirement or do not apply for authorisation within the stipulated time frame, shall wind up PA-CB activity by July 31, 2024," the RBI said in the circular.
However, those banks that already deal in foreign exchange transactions do not need to seek approval from the RBI.
Further, the entities must ensure complying with earlier stated guidelines on governance, merchant onboarding, customer grievance redressal, security, fraud prevention, and risk management framework by Jan. 31, 2024. "Non-adherence to these instructions may lead to the application for authorisation being refused," it said.
All the banks and non-bank payment aggregators will disclose their existing business activity in cross-border trade settlement to the regulators by Dec. 31. The continuation of the existing business in terms of exports, imports, or both, as well as the commencement of new business, will be subject to regulatory approvals.
"In other words, a single authorisation will be required by a non-bank to undertake PA and PA-CB activity," the RBI said.
If an entity wants to get into the imports business from its existing exports business, the regulators must be informed and approval sought at least two months before the commencement of business in such a new activity category.
The pre-requisite for seeking a payment aggregator licence is to register with the Finance Ministry's Financial Intelligence Unit. The maximum value of goods and services traded should not exceed Rs 25 lakh, the RBI said.
Following are the guidelines for payment aggregators as prescribed by the RBI:
Payment Aggregators In The 'Import Only' Business
They shall maintain an import collection account with a bank.
Payment for imports shall be received in an escrow account of the payment aggregator and then transferred to the import collection account.
Onward transfer to the foreign merchants shall be carried out only by debit to the import collection account.
Payment aggregators may directly onboard merchants located abroad or enter into an agreement with e-commerce marketplaces or entities providing payment aggregator services abroad.
In all such arrangements, it is the payment aggregator's responsibility to ensure the due diligence of merchants.
Goods and service imports worth more than Rs 2.5 lakh would require the buyer's due diligence as well.
Payments for imports can be carried out using any payment instrument provided by authorised payment systems in India, except small PPIs.
Payment Aggregators In The 'Export Only' Business
They shall maintain an export collection account denominated in Indian rupees and/or foreign currency with an Indian bank.
An export collection account for each foreign currency shall be maintained separately.
All export proceeds shall be credited to the relevant currency account of the payment aggregator.
Payment aggregators need to ensure that the transactions for the export of any restricted goods and services are not facilitated.
Due diligence by the merchant shall be undertaken, and proceeds from the export collection account shall be settled only in the account of the merchant.
Settlement in foreign currencies shall be permitted only for those merchants that have been directly onboarded by the payment aggregator.
Payment Aggregators In 'Import And Export' Business
All above requirements, withstanding, separate collection accounts for import and export transactions, shall be maintained.
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