Master Directions on Access Criteria for Payment Systems (Updated as on July 28, 2021)
UR
- Applies toAll regulated entities
- StatusIn force
- IssuedJan 19, 2017
- Amendmentsnone tracked
- Length36 points in 3 sections · 4 min read
The four dates on this rule
- PublishedJan 19, 2017The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyJan 19, 2017The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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32 of the 36 points name no product and bind every product. All products.
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Must know
1. Co-operative Societies Cannot Join
A co-operative society cannot become a member or sub-member of any payment system.
2. Primary Dealer Access Type
Primary Dealers get one type of big-value transfer access, not the full bank type.
3. PPI Issuers Get Type-D Access
Prepaid instrument issuers and white-label ATM operators get their own transfer-system access type.
4. Review Every Two Years
RBI reviews who can join payment systems once every two years.
5. Bank CRAR Must Be 9pc
A bank needs a capital ratio of at least 9% to join the fast, big-value system.
BankPulse example. Example: a bank's own CRAR is 8.5%. RBI's minimum is 9%, so this bank does not yet qualify to apply.
6. Bad Loans Capped At 5pc
A bank's bad loans must stay under 5% of its book to join.
7. Bank Net-Worth Must Be 25cr
A bank needs a net worth of at least 25 crore rupees to join.
8. Payment Company Needs Authorisation First
A payment company must already hold RBI's authorisation before it can apply to join.
9. Payment Company Net Worth Test
A payment company needs the net worth RBI sets, or 25 crore rupees, whichever is higher.
10. Payment Company Must Be Indian
A payment company must be incorporated in India under the Companies Act.
11. RBI Gets Its Own Recommendation
RBI's own department gives its recommendation directly, not through the applicant.
12. Falling Below The Line
A member who later falls below these numbers may still continue if RBI's department agrees.
13. One Approval Opens Three Doors
Meeting the fast-system test also opens a current account and bond-trading membership.
14. No IDL Facility For PSPs
A payment company cannot use RBI's short-term intra-day cash support line.
15. RBI Clears New Local Members
A local clearing house must get RBI's regional office to clear a new member first.
16. Existing Fast-System Banks Join Automatically
A bank already using the fast, big-value system automatically qualifies for local clearing membership too.
17. No Cap On Sub-Members
A sponsor bank can take on any number of smaller banks as sub-members.
18. Sponsor Bears Full Settlement Risk
The sponsor bank takes complete responsibility for settling every sub-member's transaction.
19. Non-CBS Branches Stay Out
A sub-member's branch with no core banking system cannot use the fast, big-value system.
20. No Approval Needed To Sponsor
A bank needs no prior RBI approval to take on a sub-member, only to inform RBI right after.
21. Same Charges For Sub-Member Customers
A sub-member's own customer cannot be charged more than a sponsor's direct customer.
22. RBI Can End A Membership
RBI can suspend or end a member's access if it harms the payment system.
23. Money Trouble Can Limit Access
If a member's finances worry RBI, RBI can limit how much that member clears each day.
24. Barred Members Lose Other Accounts
If RBI bars a member, its current account and bond-trading memberships are decided separately.
Do it
1. New Banks Skip One Step
A brand-new bank need not get a separate recommendation if it applied before starting business.
2. One Year To Go Live
RBI's payments department gives a new member up to a year to actually start using its access.
3. Skip DPSS For An Account
An entity only wanting a current account, not full system access, can go straight to RBI's regional office.
4. Apply To The Clearing House
To join a local clearing house, apply to that clearing house's own President.
5. Sponsor's Board Approves Risk Plan
A sponsor bank's own Board must approve its risk plan for its sub-members.
6. Sponsor Handles Sub-Member Complaints
The sponsor bank is responsible for resolving a sub-member's customer complaints.
7. Report Fraud To RBI Immediately
A sponsor bank must tell RBI right away if a sub-member is caught in fraud.
Background
1. Who Can Apply
Any bank operating in India, or an authorised payment company, can apply to join.
2. Two Kinds Of Membership
There are separate rules for joining fast, big-value systems and joining local clearing houses.
3. Post Office Can Join Clearing
Post Office Savings Bank can be a member of local clearing houses, as before.
4. Same Test For Local Clearing
The same financial test used for the fast system is also used for local clearing houses.
5. What Sub-Membership Means
A bank with the technology but not the access criteria can join through another bank instead.