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ARTICLE · 30 MAY 2024

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Back To The Drawing Board: RBI Proposes Major Changes To The Payment Aggregator Framework

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The Reserve Bank of India (RBI) on 16 April 2024 issued two draft directions (Draft Directions) on regulation of payment aggregators (PAs), viz., (i) draft directions...

IndiaFinance and Banking
Sanjay Khan Nagra
Sanjay Khan Nagra
Prashanth Ramdas
Prashanth Ramdas
Smita Jha
Smita Jha
Riddhiman Sarkar
Riddhiman Sarkar
Ishani Sahai
Ishani Sahai
Jino Mathews Raju
Jino Mathews Raju
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Introduction

The Reserve Bank of India (RBI) on 16 April 2024 issued two draft directions (Draft Directions) on regulation of payment aggregators (PAs), viz., (i) draft directions (Draft PA-P Directions) on regulation of PA – Physical Point of Sale (PA-P / Offline PA); and (ii) draft amendments (Draft Amendments) to the existing Guidelines on Payment Aggregators and Payment Gateways, dated 17 March 2020 (PA-PG Guidelines).

These Draft Directions have been issued in furtherance of RBI's Statement on Developmental and Regulatory Policies dated 30 September 2022, wherein the RBI had emphasised on the need to regulate PAs undertaking proximity / face-to-face transactions, as the PA-PG Guidelines only regulated PAs processing online or e-commerce transactions (PA-O / Online PA). Through the Draft Directions, the RBI has made clear its intent to have a consolidated and harmonised legal framework for regulating the activities of both Online PAs and Offline PAs.

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