RBI/DPSS/2016-17/51
Master Direction DPSS.CO.OD.No.1846/04.04.009/2016-17
January
17, 2017
The Chairman/ Managing Director/
Chief Executive Officer
All Scheduled Commercial Banks including RRBs/
Urban Co-operative Banks/ State Co-operative Banks/
District Central Co-operative Banks/ Payment Banks/ Small Finance Banks/
Primary Dealers/
Authorised Payment System Providers
Dear Sir,
Master Directions on Access
Criteria for Payment Systems
A reference is invited to our circular
DPSS.CO.OD.494/04.04.009/2011-2012 dated September 21, 2011 prescribing
the Access Criteria for Payment Systems. These Master Directions, being
issued under Section 10(2) read with Section 18 of Payment and Settlement
Systems Act 2007 (Act 51 of 2007), consolidate and update all the
instructions issued on the subject up to December 31, 2016 and placed on
the web-site of the Reserve Bank of India (rbi.org.in).
Yours faithfully
(Nanda S. Dave)
Chief General Manager
Contents
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INTRODUCTION
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SECTION I
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1.1 Short Title and Commencement
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1.2 Applicability
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1.3 Purpose
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SECTION II
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2.1 General Guidelines
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2.2 Access Criteria
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SECTION III
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3.1 Guidelines for Membership to
Centralised Payment Systems
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3.2 Guidelines for Membership to
Decentralised Payment Systems
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SECTION IV
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4.1 Sub-membership Facility
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4.2 Sub-membership of Centralised
Payment Systems
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4.3 Sub-membership of Decentralised
Payment Systems
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SECTION V
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5. Review of Membership
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Appendix
1 - Covering letter & Application forms (Centralised Payment Systems)
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Covering Letter for Membership to
Centralised Payment Systems
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Annex I – Application form for Current
Account
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Annex II – Application form for SGL and
IDL-SGL Account
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Annex III – Application form for NDS-OM
and NDS-CALL membership
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Annex IV – Application form for INFINET
membership
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Annex V – Application form for RTGS
membership
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Annex VI – Application form for NEFT
membership
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Appendix 2 - Covering letter &
Application form (Decentralised Payment Systems)
|
Covering Letter for Membership to
Decentralised Payment Systems
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Annex I – Application form for Current
Account
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ANNEX A
|
List of Circulars repealed, as the
contents of the same have been incorporated in the Master Direction
|
INTRODUCTION
In exercise of the powers
conferred by Section 10(2) read with Section 18 of Payment and Settlement
Systems Act 2007 (Act 51 of 2007), the Reserve Bank of India being
satisfied that for the purpose of enabling it to regulate the payment
systems or in the management or operation of the payment systems and it is
necessary and expedient in the public interest so to do, hereby, issues the
directions hereinafter specified.
SECTION
I
1.1 Short title and commencement
1.1.1 These directions shall be
called the Reserve Bank of India (Access Criteria for Payment Systems)
directions 2017.
1.1.2 These directions shall
come into effect on the day they are placed on the official website of the
Reserve Bank of India (RBI).
1.2 Applicability
The provisions of these directions
shall apply to all scheduled/ licensed banks operating in India and
authorised payment system providers (PSPs) who are desirous of
participation in payment systems in India.
1.3. Purpose
These directions are issued with
a view to providing a framework for scheduled/ licensed banks/ primary
dealers /authorised PSPs enabling them to apply for membership of payment
systems. These directions also aim to provide a set of consolidated
requirements for the applicant for various requirements related to payment
systems. To ensure the safety, security and integrity of payment services,
such access is subject to certain minimum standards.
SECTION
II
2.1 General Guidelines
2.1.1 There will be two sets of
access criteria viz., one for centralised payment systems and the other for
decentralised payment systems. The centralised payment systems will include
Real Time Gross Settlement (RTGS) System and National Electronic Fund Transfer
(NEFT) system and any other system as may be decided by RBI from time to
time. The decentralised payment systems will include clearing houses
managed by RBI (Cheque Truncation System (CTS) centres)) as well as other
banks (Express Cheque Clearing System (ECCS) centres)) and any other system
as decided by RBI from time to time.
2.1.2 Membership to the
centralised and decentralised payment systems will be open to all
scheduled/ licensed banks. Unlicensed banks can continue to participate in
the decentralised payment systems as sub-members. Co-operative societies
cannot be either direct members or sub-members in any payment system.
2.1.3 Notified institutions like
Post Office Savings Bank will as hitherto be eligible for membership in
decentralised payment systems.
2.1.4 Primary Dealers will also
be eligible for RTGS membership subject to the extant regulations and
recommendations of the regulatory department concerned. For clearing
organisations/ PSPs and other entities, the RBI would consider membership
requests on a case-to-case basis.
2.1.5 Access criteria for
membership to the various payment systems will be reviewed once in two
years.
2.2 Access Criteria
2.2.1 The uniform access
criteria at the time of application for centralised payment systems is given
below:
i. Minimum CRAR of 9% (as per the latest audited balance
sheet);
ii. Net NPAs below 5% (as per the latest audited balance
sheet);
iii. Minimum net-worth of ?25 crore;
iv. Availability of Core Banking Solution / centralised
processing system at applicant’s end; and
v. Recommendation of the concerned regulatory / supervisory
department.
2.2.2 The uniform access
criteria at the time of application for decentralised payment systems is
given below:
i. Minimum CRAR of 9% (as per the latest audited balance
sheet);
ii. Net NPAs below 5% (as per the latest audited balance
sheet);
iii. Availability of Core Banking Solution / centralised
processing system at applicant’s end; and
iv. Recommendation of the concerned regulatory / supervisory
department.
2.2.3 The recommendations of the
regulatory / supervisory department of the RBI will be obtained
independently, and need not be furnished by the applicant entity at the
time of submission of the application.
2.2.4 Continuation of banks/
primary dealers in payment systems may be allowed on the recommendation of
the concerned regulatory / supervisory department in case of any
deterioration in the financials of the bank/ primary dealer below the
thresholds indicated in para 2.2.1 and 2.2.2 above.
2.2.5 For new banks licensed, no
separate recommendation of the regulatory / supervisory department would be
obtained, if the bank has submitted its application for centralised /
decentralised payment system before starting to provide services as banks.
SECTION
III
3.1. Guidelines for membership
to Centralised Payment Systems
3.1.1 All applications for
membership to centralised payment systems should be submitted to the Chief
General Manager, Department of Payment and Settlement Systems (DPSS),
Reserve Bank of India Central Office, 14th floor, Central Office building,
Shahid Bhagat Singh Marg, Fort, Mumbai-400 001.
3.1.2 The application should be
in the format prescribed in Appendix
- 1 “Covering letter for membership to Centralised Payment System”, together with annexures.
3.1.3 The entity on fulfilling
the access criteria mentioned at para 2.2.1 would simultaneously be
eligible for opening a current account, Subsidiary General Ledger
(SGL)/Intra Day Liquidity SGL (IDL-SGL) account, Negotiated Dealing
System-Order Matching (NDS-OM) membership facility with RBI without any
other additional requirements/ prescriptions. Entities which are already
having such accounts/ membership would need to mention the same while
applying for membership of centralised payment systems. NEFT membership is
linked with RTGS i.e. only RTGS members will be eligible to join NEFT.
3.1.4 Entities which are not
having aforesaid accounts/ membership mentioned at para 3.1.3 would need to
apply for the same at the time of application of centralised payment systems,
as the same are pre-requisite for operationalization of RTGS/ NEFT
membership.
3.1.5 The operationalisation of
the current account, SGL/IDL-SGL account, NDS-OM/CALL membership, Indian
Financial Network (INFINET) membership will be subject to the entity
fulfilling the documentation requirements and other formalities as
prescribed by RBI from time to time.
3.1.6 Entities not seeking
specific access to centralised payment system but desirous of opening only
a current account, SGL/Constituent SGL (CSGL) account, NDS-OM/CALL
membership need not approach DPSS and can directly approach the concerned
regional office of RBI/ central office department of RBI.
3.1.7 The centralised payment
systems would continue to be regulated/ guided by RTGS System Regulations,
NEFT Procedure Guidelines, instructions issued from time to time, which are
generally placed on RBI website at following links –
https://rbi.org.in/Scripts/Bs_viewRTGS.aspx
https://rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2346
https://rbi.org.in/scripts/FS_Notification.aspx?fn=9
3.2. Guidelines for membership
to Decentralised Payment Systems
3.2.1 All applications for
membership to decentralised payment systems should be submitted to the
respective President of the clearing house where the entity desires to
participate.
3.2.2 The application should be
submitted in the format prescribed in Appendix - 2 “Covering letter for membership to
Decentralised Payment System”,
together with annexures.
3.2.3 The admission of an entity
to a clearing house shall be subject to the entity fulfilling the
requirements as laid down in the Uniform Regulations and Rules for Bankers'
Clearing House (URRBCH), procedural guidelines and instructions issued in
this regard, from time to time, which are placed on RBI website at following
links –
https://rbi.org.in/Scripts/OccasionalPublications.aspx?head=Uniform
Regulations and Rules for Bankers Clearing Houses
https://rbi.org.in/Scripts/OccasionalPublications.aspx?head=Procedural%20Guideline%20for%20Cheque%20Truncation%20System
https://rbi.org.in/scripts/FS_Notification.aspx?fn=9
3.2.4 President of the clearing
house (not managed by the RBI) will seek the formal clearance of the
Regional Office (RO) of the RBI before granting membership. The clearing
house, based on the communication received from RBI, RO (DPSS/National
Clearing Cell) and after considering other requirements as applicable to
the payment system, shall admit the member bank to the clearing house.
3.2.5 The entity on fulfilling
the access criteria mentioned at para 2.2.2 would simultaneously be
eligible for opening current account with RBI / current account with
settlement bank, without any other additional requirements / prescriptions.
3.2.6 Notwithstanding the above,
the operationalisation of the current account with RBI/settlement bank will
be subject to the entity fulfilling the documentation requirements and
other formalities as prescribed from time to time.
3.2.7 Scheduled/ licensed banks
which have already been admitted as participants of the centralised payment
systems (RTGS and NEFT) will be eligible for automatic membership of the
decentralised payment systems across all clearing houses. However, such
banks would have to apply to the President of Clearing House for
operationalisation of membership of decentralised payment systems and will
be subject to Regulation 8 of URRBCH.
SECTION
IV
4. Sub-membership facility
4.1 Sub-membership is an alternate mechanism to all
scheduled/ licensed banks which have the technological capabilities but are
not participating in payment systems on account of either not meeting the
access criteria or because of cost considerations.
4.2 Sub-membership of
Centralised Payment Systems: The
sub-member/s would participate in the centralised payment systems through
their sponsor bank which is a direct member of the centralised payment
system. Sponsor bank has to ensure the following:
(a) There are no restrictions on
the number of sub-members a sponsor bank could sponsor. Aspects relating to
operational feasibility, risk mitigation, fund settlement, collaterals,
etc., have to be taken care of by the sponsor bank before sponsoring
sub-member/s.
(b) The sponsor bank should put
in place a risk management framework and a system of continuous monitoring
of the risk management practices of sub-member/s that they desire to
sponsor. The risk management framework should be approved by the Board of
the sponsor bank.
(c) The sponsor bank would be
responsible for sending/ receiving the transactions/ messages on behalf of
their sub-member/s.
(d) The settlement of
transactions by/on the sub-members would take place in the settlement
accounts of the sponsor bank maintained with RBI. The sponsor bank under
this arrangement will assume complete responsibility for the settlement of
all transactions by/on the sub-members.
(e) The sponsor bank at all
times should ensure that their sub-member/s adhere to and abide by the
rules, regulations, operational requirements, instructions, orders,
decisions, etc. of the centralised payment systems, as laid down by the RBI
from time to time.
(f) Redressal of all customer
complaints/grievance would be the responsibility of the sponsor bank. To
aid in this process, the sponsor bank should ensure that the sub-member/s
have put in place a transparent and robust mechanism to resolve customer
complaints in a quick and efficient manner, as laid down in the procedural
guidelines, business rules and regulations of the centralised payment
systems.
(g) All disputes between the
sponsor bank and the sub-member/s will be handled bi-laterally amongst
them.
(h) In order to ensure
compliance with the timely credit and return disciplines which are of
utmost importance in centralised payment systems, branches of sub-member/s
that are not under core banking system shall be kept out of the centralised
payment systems till such time they are brought under core banking.
(i) The sponsor bank should
bring to the immediate notice of the RBI:
· any involvement of its sub-member/s in any suspicious
transactions, frauds, etc.;
· any of its sub-member/s resorting to any unfair
practices relating to their participation in centralised payment systems;
· any of its sub-member/s not adhering to the rules,
regulations, operational requirements, instructions etc. of centralised payment
systems.
(j) The sponsor bank is not
required to take prior approval of the RBI for sponsoring a sub-member/s or
cessation of its sub-member/s in the centralised payment systems. However,
as and when a bank sponsors sub-member/s or cease to act as sponsor bank of
sub-member/s, it should immediately inform the Regional Director, Mumbai
Regional Office, Reserve Bank of India, the details of the sub-member/s,
IFSC/MICR codes allotted to the branch/branches of sub-member/s, date of
commencement/ discontinuation of sub-membership etc.
(k) The charges for customer
transactions of sub-member/s cannot exceed the charges applicable to
customers of sponsor banks/direct members of the centralised payment
systems viz., RTGS and NEFT.
4.3 Sub-membership of Decentralised
Payment Systems: The sub-member/s would
participate in the decentralised payment systems through their sponsor bank
subject to the regulation 10, 12, 15 and 16 of URRBCH which is available at
the RBI website at following link-
https://rbi.org.in/Scripts/OccasionalPublications.aspx?head=Uniform
Regulations and Rules for Bankers Clearing Houses
SECTION
V
5. Review of Membership
5.1 Once an entity is admitted as a member, it will
generally continue to be a member so long as it is permitted to accept deposits
or its participation in the payment system is not found to be detrimental
to the smooth functioning of the product/ system in any manner or its
membership is not suspended/ revoked/ terminated as per the rules,
regulations and guidelines of the respective payment systems.
5.2 RBI will have the authority to determine if a
member can continue to participate in payment systems. RBI will have the
right to revoke, or suspend the access of an entity to any of the payment
system, if its continuation is felt to be detrimental to the smooth
functioning of the payment systems in any manner.
5.3 Where concerns have been expressed on the
financial conditions of an entity, in such cases, RBI could initiate
measures which may also include limits on presentations by such entities in
the clearing house. The limits on presentations for such entities would be
decided in consultation with the concerned regulatory/ supervisory
department/s and/or the President of the clearing house.
5.4 In the event of an entity which has access to
payment systems, (and has a current account, SGL/IDL-SGL/CSGL account,
NDS-OM/CALL membership, INFINET membership), being subsequently debarred
from the payment systems or downgraded in access to the payment systems,
the continuation or otherwise of the other accounts/ membership will be
decided by RBI separately.
ANNEX A
List
of Circulars repealed, as the contents of the same have been incorporated
in the Master Direction
Sr. No.
|
Circular No.
|
Circular date
|
Subject
|
1
|
DPSS.CO.OD.494/04.04.009/2011-2012
|
September 21, 2011
|
Access
criteria for payment systems
|
2
|
DPSS (CO) EPPD No. 838/04.03.01/2011-12
|
November 17, 2011
|
NEFT
– Access Criteria for Regional Rural Banks (RRBs)
|
3
|
DPSS (CO) CHD. No.
1691/03.01.14/2011-2012
|
March 15, 2012
|
Access
Criteria for Payment Systems – Membership to Clearing Houses operating
Decentralised Payment Systems
|
4
|
DPSS.CO.OD.1848 /06.07.003/2011-2012
|
April 9, 2012
|
Access
criteria for payment systems – sub-membership to centralised payment
systems
|
|