RBI mandates prior approval in case of takeover / acquisition of control of non-bank PSOs and sale / transfer of payment system activity of non-bank PSO
The Reserve Bank of India (“RBI”) has issued a Notification on “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”
RBI has informed that the operations of non-bank PSOs (authorised to operate any Payment System) have been reviewed and they will require prior approval of RBI in the following cases –
a. Takeover / Acquisition of control, which may / may not result in change of management.
b. Sale / Transfer of payment activity to an entity not authorised for undertaking similar activity. 3.
The non-bank PSOs has to inform RBI within 15 calendar days in the following cases –
a. Change in management / directors.
b. Sale / Transfer of payment activity to an entity authorised for undertaking similar activity
Please note, further details on this is provided in Annex I of the present Notification.
Background:
The present notification is issued with reference to *paragraph 5.10 of the Master Directions on Prepaid Payment Instruments dated August 27, 2021, **paragraph 5.2 of Guidelines on Regulation of Payment Aggregators and Payment Gateways dated March 17, 2020 and ***paragraph 3.1 of Annex-A to White Label ATM Guidelines dated June 20, 2012.
___________________
*paragraph 5.10 of the Master Directions on Prepaid Payment Instruments dated August 27, 2021: Any takeover or acquisition of control or change in management of a non-bank entity shall be communicated to the CGM, DPSS, CO, RBI, Mumbai within 15 days with complete details, including ‘Declaration and Undertaking’ (Annex-3) by each of the new directors, if any. RBI shall examine the ‘fit and proper’ status of the management and, if required, may place suitable restrictions on such changes.
**paragraph 5.2 of Guidelines on Regulation of Payment Aggregators and Payment Gateways dated March 17, 2020: Any takeover or acquisition of control or change in management of a non-bank PA shall be communicated by way of a letter to the Chief General Manager, Department of Payment and Settlement Systems (DPSS), RBI, Central Office, Mumbai within 15 days with complete details, including ‘Declaration and Undertaking’ by each of the new directors, if any. RBI shall examine the ‘fit and proper’ status of the management and, if required, may place suitable restrictions on such changes.
***paragraph 3.1 of Annex-A to White Label ATM Guidelines dated June 20, 2012:The authorisation issued to a WLAO cannot be assigned/transferred without prior approval of the Reserve Bank of India.
Source: Reserve Bank of India
