The Reserve Bank of India (RBI) on Tuesday released the draft framework for grant of recognition to an industry association as a self-regulatory organisation (SRO) for payment system operators (PSOs).
The SRO will cover operators in all segments of payment systems and will be expected to observe best practices on security, customer protection and competitiveness, the RBI said in a statement.
It will also serve as a two-way communication channel between the PSOs and RBI and work towards establishing minimum benchmarks and standards in the payments space, apart from helping disciplined behaviour by members, the statement added.
The framework is open for public comments until on or before September 15, 2020 following which the central bank will place the final guidelines.
Setting up of the SRO was first proposed in the bi-monthly monetary policy release by the RBI in February 2020.
“With substantial growth in digital payments and maturity gained by entities in the payment ecosystem, it is desirable to have a self-regulatory organisation (SRO) for orderly operations of the entities in the payment system,” RBI had said in February.
In June 2020, RBI released an updated version of an oversight framework document to monitor financial market infrastructures (FMIs) and retail payment systems (RPSs). The document is expected to update the supervisory transparency and disclosures by payment system operators.