RBI Update - Master Directions on Authorisation to operate a Payment System

The Master Directions on Authorisation to Operate a Payment System consolidate and streamline the regulatory framework for entities seeking or holding authorisation to operate payment systems under the Payment and Settlement Systems Act, 2007. The Directions introduce an on-tap authorisation mechanism, prescribe eligibility criteria including minimum net-worth certification, fit and proper requirements for promoters and management, and restrictions on investments from FATF non-compliant jurisdictions. Authorisations will generally be granted with perpetual validity, subject to continued regulatory compliance and satisfactory supervisory assessment. The Directions also establish a comprehensive framework for voluntary surrender of Certificates of Authorisation (CoA), including customer liability settlement, escrow management, public disclosures, and auditor certifications. Further, a one-year cooling-off period has been prescribed for entities whose authorisation is revoked, surrendered, or refused, as well as for new entities promoted by such persons, unless waived by RBI in exceptional circumstances. The Directions repeal and consolidate several earlier circulars relating to on-tap authorisation, FATF-related investments, perpetual validity of CoA, voluntary surrender, cooling-off periods, and net-worth computation, thereby creating a unified regulatory framework for payment system operators.