RBI to put minimum net worth requirement of Rs 100 Cr for payment gateways and aggregators
Reserve Bank of India (RBI), as a part of a discussion paper, on ‘Guidelines for Payment Gateways and Payment Aggregators’, suggested that payment gateways and aggregators will have to maintain a minimum net worth of Rs 100 crore at all times.
Existing payment gateways and payment aggregators are expected to comply with this net worth requirement, within one year after the issuance of guidelines by RBI.
Explaining the nature of this net worth, the RBI in the discussion paper revealed,
“Net-worth shall consist of paid-up equity capital, preference shares which are compulsorily convertible into equity capital, free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of assets but not reserves created by revaluation of assets adjusted for accumulated loss balance, book value of intangible assets and deferred revenue expenditure, if any."
"Compulsorily convertible preference shares can be either non-cumulative or cumulative, and they should be compulsorily convertible into equity shares and the shareholder agreements should specifically prohibit any withdrawal of this preference capital at any time,” the RBI added.
Further, the apex banks said that entities that are not able to comply with the net worth requirement within the stipulated time frame shall wind-up payment aggregation business within one year of issuance of guidelines.
The banks presently maintaining nodal accounts of such entities shall have to report compliance in this regard.
In addition to the net-worth guidelines, the RBI also suggested that entities undertaking payment aggregation and gateway activities will have to be incorporated in India. It said,
“Entities undertaking Payment Aggregation and Payment Gateway activity shall be a company incorporated in India under the Companies Act, 2013. They shall be given one financial year (from the date of issue of guidelines) to comply with the entry point norms and other technology, security, storage, etc., norms issued in this regard."
Further, about onboarding merchants, the RBI said the entities should ensure compliance with Know Your Customer or Anti Money Laundering requirements.
In addition to this, the Central Bank also suggested that ecommerce marketplaces will have to be separated from the payment gateway or aggregator business.
(Edited by Saheli Sen Gupta)