What changed
RBI has issued a finalized framework for recognizing SROs for PSOs, following a draft and public comments. The framework outlines characteristics, governance, and application process for SROs. This is part of the Payment and Settlement Systems Vision 2019-21 and the February 2020 monetary policy statement.
What it means for you
Banks and non-bank PSOs can now form or join an SRO to self-regulate on security, pricing, customer protection, and grievance redressal. This shifts some regulatory oversight to the industry, freeing RBI to focus on systemic issues. SROs must enforce rules and resolve disputes among members, promoting ethical standards and compliance.
What you must do
- Review the finalized SRO framework annex for eligibility and compliance requirements.
- Assess if your PSO group or association should apply for SRO recognition.
- Prepare application to the Chief General Manager, DPSS, RBI, as per framework instructions.
- Engage with industry peers to align on SRO formation or membership.
Who it affects
All authorized Payment System Operators (banks and non-banks), Industry associations of PSOs, RBI's Department of Payment and Settlement Systems
What is the purpose of this SRO framework?
To encourage industry self-regulation among PSOs, setting standards for security, pricing, customer protection, and dispute resolution, while supplementing RBI regulations.
Who can apply for SRO recognition?
Interested groups or associations of PSOs, including both banks and non-banks, can apply to the RBI's Department of Payment and Settlement Systems.
Does the SRO replace RBI regulations?
No, the SRO's rules supplement but do not replace applicable laws or RBI regulations.