RBI press release dated 8th October, 2020 on development & regulatory issues.
Perpetual Validity for Certificate of Authorisation (CoA) issued to
Payment System Operators (PSOs)
Currently, the Reserve Bank issues “on-tap’ authorisation under the Payment and Settlement Systems Act, 2007 to non-banks issuing Prepaid Payment Instruments (PPIs), operating White Label ATMs (WLAs) or the Trade Receivables Discounting Systems (TReDS), or participating as Bharat Bill Payment Operating Units (BBPOUs). Authorisation (including renewal of authorisation) of such PSOs has been largely for specified periods up to five years. While such limited period licences were necessitated in the initial period of evolution of the payment system, it can lead to business uncertainty for the PSOs and involves avoidable use of regulatory
resources in the process of renewal. Furthermore, the Reserve Bank’s oversight framework has gradually developed into a more mature and comprehensive system, which clearly lays out its oversight expectations and the methodologies adopted for oversight of PSOs. To reduce licensing uncertainties and enable PSOs to focus on their business and optimise utilisation of scarce regulatory resources, it has been decided to grant authorisation for all PSOs (both new applicants as well as existing PSOs) on a perpetual basis, subject to certain conditions. Detailed instructions will be