TITLE: Reserve Bank of India Updates Master Directions on Access Criteria for Payment Systems
BODY:
On January 17, 2017, the Reserve Bank of India (RBI) issued updated Master Directions on Access Criteria for Payment Systems under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act 2007. The directions, updated as of July 28, 2021, consolidate and supersede previous instructions issued on the subject and establish a comprehensive framework for entities seeking participation in India's payment systems.
The Master Directions establish two categories of access criteria: one for centralised payment systems—including the Real Time Gross Settlement (RTGS) System and National Electronic Fund Transfer (NEFT) system—and another for decentralised payment systems, including Cheque Truncation System (CTS) centres and Express Cheque Clearing System (ECCS) centres. Membership eligibility varies by entity type. Scheduled and licensed banks are eligible for Type A membership in RTGS and NEFT. Primary Dealers qualify for Type B RTGS membership covering inter-bank and Own Account Transfer transactions. Authorised non-bank payment system providers, including Prepaid Payment Instrument (PPI) Issuers and White Label ATM Operators, are eligible for Type D RTGS membership, while Card Networks qualify for Type C membership enabling Multilateral Net Settlement Batch transactions.
Access criteria for centralised systems require a minimum Capital to Risk-Weighted Assets Ratio (CRAR) of 9 percent, net non-performing assets below 5 percent, minimum net-worth of ₹25 crore, Core Banking Solution availability, adequate technical competence including cyber resilience, and regulatory department recommendation. Decentralised system criteria mirror these requirements but exclude certain technical specifications. The directions also establish sub-membership provisions, allowing entities to participate through sponsor banks, and outline review mechanisms enabling the RBI to revoke or suspend access if participation becomes detrimental to payment system functioning.
The directions apply to all scheduled and licensed banks, primary dealers, and authorised payment system providers operating in India. Access criteria are subject to review every two years.
REFERENCES:
Reserve Bank of India. Master Directions on Access Criteria for Payment Systems (Updated as on July 28, 2021). Available at: https://www.rbi.org.in/