MUMBAI: The Reserve Bank of India on Thursday issued new notifications for the payments sector. In the first notification, it has invited for applications by interested groups/associations of PSOs (banks as well as non-banks) who seek recognition as an SRO. In the second notification, it issued its decision on streamlining the QR code infrastructure.
RBI had expressed to establish a Self-Regulatory Organisation (SRO) for the Payment System Operators to encourage regulatory resources that can be more focused on issues of systemic importance as well as more appropriate to comply with. RBI had invited public comments on the draft framework for the grant of recognition as an SRO earlier this year and on Thursday issued the final framework calling applications for the same. A few of the eligibility requirements for recognition as an SRO mentioned in the notification area, the SRO shall be set up as a not-for-profit company under the Companies Act, 2013; only regulated system entities, viz, banks and non-banks PSOs can be members of an SRO, the SRO shall be professionally managed with clear bye-laws, the memorandum/ bye-laws of the SRO shall specify the criteria for admission of members and the functions it will discharge and others. RBI has also specified the characteristics and functions of an SRO in the notification.
In another notification issued in the interest of the payments industry by the RBI on Thursday, it has decided to continue the two interoperable QR codes in existence- UPI QR and Bharat QR. RBI allowed time until March 2022 for the Payment System Operators (PSOs) that use proprietary QR codes to shift to one or more of the interoperable codes. The decision has come after the Committee on Analysis of QR codes in India had put forward a report, earlier this year, to review the current system of QR codes and had suggested measures to move towards interoperable QR codes. The notification also clarified that no more QR codes should henceforth be launched by any PSO for any payment transactions. It expressed the Central bank’s interest to enable the features identified by the committee report and continued consultations to improve the interoperability of QR codes. The notification advised the PSOs to take initiative to increase awareness about interoperable QR codes.
Mr. Vishwas Patel, Chairman, Payments Council of India, and Director, Infibeam Avenues Limited appreciated RBI’s move on promoting self-regulation in the industry and said, “RBI’s decision to call for application to seek eligibility as an SRO comes in the light of enhancing the global competitiveness of the industry. We appreciate the framework provided by the RBI and as a body continuously working towards supporting the industry players would also like to seek the SRO recognition from the RBI.” Mr. Patel, who was also a member of the RBI appointed committee on QR codes continued “The decision to create an ecosystem of interoperability of QR codes by keeping only Bharat QR and UPI QR in existence will definitely streamline the QR code infrastructure in India. We are happy that RBI accepted the recommendations of the committee report and we look forward to an enhanced consumer convenience with this decision.”
Mr. Loney Antony, Co-Chairman- Payments Council of India and Vice Chairman, Hitachi Payments Services, expressed his agreement with the notification and said, “RBI has always been progressive about making regulations for the benefit of the industry, and its decision on inviting applications for an SRO is a reflection of the same. For RBI’s decision to create an interoperable infrastructure of QR codes, there is an immense potential to provide customer satisfaction and ease of use.”
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