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Here’s all you need to know about RBI’s new rules for entities facilitating cross-border payments

The new rules apply to entities that facilitate cross-border payment transactions for import and export of permissible goods and services in India via online mode.

The Reserve Bank of India (RBI) on October 31 issued a circular that lays out new rules for entities that facilitate cross-border payments for import and export of goods and services. These entities will now be classified as Payment Aggregators – Cross Border (PA-CB) and will require RBI approval to function as such.

Previously, RBI regulated cross-border payments through ad-hoc circulars. “Keeping in view the developments that have taken place in the area of cross-border payments, it has been decided to bring all entities facilitating cross-border payment transactions for import and export of goods and services under direct regulation of the RBI,” the central bank noted.

Who do the new rules apply to? The new rules apply to entities that facilitate cross-border payment transactions for the import and export of permissible goods and services in India in online mode. This includes any Authorised Dealer (AD) banks, Payment Aggregators (PAs), and PAs-CB involved in the processing of cross-border payment transactions. For example, a payment service provider that allows a seller abroad to receive payments for products sold to someone in India or a payment gateway that allows a seller in India to receive payment for goods purchased by someone overseas.

Do these entities need RBI authorisation under the new rules? Yes. All non-banks who are providing PA-CB services should apply to the RBI for authorisation by April 30, 2024. They can seek authorisation under either of the three categories: export-only, import-only, or export and import. These entities can continue providing services as usual until they hear back from RBI regarding the decision on their application. Banks that provide these services don’t need any separate authorisation.


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Do existing payment aggregators also need RBI approval? Yes. Existing Payment Aggregators should inform the RBI within 60 calendar days from the date of this circular about their existing PA-CB activities. If they want to continue these activities, they should seek approval from RBI for the same. The same applies if in the future any PA wants to facilitate cross-border payments.

What are the prerequisites to apply for authorisation with RBI?

  • Registration with the Financial Intelligence Unit: All non-bank PA-CBs should register themselves with the Financial Intelligence Unit-India (FIU-IND) as a prerequisite before applying for authorisation. This requirement was probably included after the recent Delhi HC ruling that PayPal must report to FIU-IND.
  • Net worth requirements: Non-banks must have a minimum net worth of ₹15 crores at the time of applying to the RBI for authorisation and a minimum net worth of ₹25 crores by March 31, 2026. New entities that commence operation after the date of this circular must attain a net worth of ₹25 crores by the end of the third financial year of grant of authorisation. Any existing PA-CB that cannot meet this requirement must wind up their PA-CB activity by July 31, 2024.

What are the rules for import-only PA-CBs?

  • They must maintain an Import Collection Account (ICA) with an AD Category-I scheduled commercial bank.
  • Payment for imports should be received in an escrow account of the PA. These payments shall then be transferred to the ICA and onward transfer to the foreign merchants should debited from the ICA.
  • PA-CBs can directly onboard merchants located abroad or enter into agreements with e-commerce marketplaces or entities providing PA services abroad. Either way, it is the responsibility of the PA-CBs to ensure that proper KYC of merchants is carried out.
  • PA-CBs should not facilitate payment transactions for the import of any restricted/prohibited goods and services.
  • If the per unit goods/services imported is more than ₹2,50,000, then the concerned PA-CB should undertake due diligence of the buyer also.
  • Payments for imports can be carried out using any payment instrument provided by authorised payment systems in India, except small PPIs.

What are the rules for export-only PA-CBs?

  1. They must maintain an Export Collection Account (ECA) with an AD Category-I scheduled commercial bank. This account can be denominated in Indian Rupees (INR) and/or foreign currency. An ECA for each non-INR currency should be maintained separately.
  2. All export proceeds shall be credited to the relevant currency ECA of the PA-CB.
  3. PA-CBs should not facilitate payment transactions for the export of any restricted/prohibited goods and services.
  4. KYC of merchants should be done by the PA-CB.
  5. Settlement in non-INR currencies is permitted only for those merchants who have been directly onboarded by the PA-CB and not by a third party such as an e-commerce site.

What are the rules for PA-CBs that facilitate both import and export? Import and Export PA-CBs are required to follow the rules applicable to both categories. They must maintain separate collection accounts – ICA and ECA.

Are banks required to comply with these rules? Yes. Although AD Category-I banks don’t need any separate authorisation from RBI to undertake PA-CB activity, they are required to comply with all of the other requirements for PA-CBs by April 30, 2024.

Is there any ceiling to how much amount a PA-CB can process? PA-CBs can process a maximum of Rs 25,00,000 per unit of goods or services.

Do the Payment Aggregator guidelines apply to PA-CBs? “All other instructions issued by the RBI regarding PAs shall apply mutatis mutandis to PA-CBs,” the circular states. This includes the PA guidelines, which will apply three months from the date of this circular.


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