The Reserve Back of India (RBI) has in a Circular dated December 7, 2020 introduced the concept of Cooling Period for entities whose application for authorisation for operating a Payment System under the Payment and Settlement Systems Act, 2007 (“PSS Act”) is returned for any reason by RBI. During the Cooling Period entities are prohibited from submission of applications for operating any payment system under PSS Act for one year from the date of revocation / non-renewal / acceptance of voluntary surrender / rejection of application.
The Cooling Period will apply in the following situations –
a. 1. Authorised Payment System Operators (PSOs) whose Certificate of Authorisation (CoA) is revoked or not-renewed for any reason; or
b. 2. CoA is voluntarily surrendered for any reason; or
c. 3. Application for authorisation of a payment system has been rejected by RBI.
d. 4. 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.
Source: Reserve Bank of India
