Cross-border payment firms to fall under RBI’s regulatory net

Mumbai: The RBI on Tuesday said all entities facilitating cross-border payment transactions for import and export of goods and services will be directly regulated by it. The new regulations will curb small-scale imports of restricted items through international e-commerce sites.
RBI has fixed a minimum net worth of Rs 15 crore for such entities, which will be categorised as payment aggregator-cross border (PA-CB).The central bank has also instructed banks to close the accounts of cross-border payment aggregators not registered with RBI or those who have not applied for registration by July 31, 2024.
The central bank has placed the responsibility of conducting customer due diligence on payment gateways. They will be accountable for ensuring that they do not facilitate payment transactions for the import of any restricted or prohibited goods and services. If the amount involved exceeds Rs 2.5 lakh, the cross-border payment aggregator must carry out due diligence on the buyer as well.
The central bank has indicated that it will accept applications from payment aggregators that are ‘export-only’, ‘import-only’, and those engaging in both activities. These regulations apply to both banks and non-bank entities. Non-bank aggregators involved in such cross-border processing must inform RBI of their intention to continue or discontinue this activity. As a prerequisite, these entities are required to register with the financial intelligence unit.
“In situations where PA-CBs facilitate transactions between merchants/ e-commerce marketplaces in India and customers/ e-commerce marketplaces abroad, it is the responsibility of the PA-CBs to ensure that transactions involving the export of any restricted or prohibited goods and services (not permitted under the prevailing foreign trade policy) are not facilitated,” RBI said.