The Reserve Bank of India (RBI) on Thursday announced the framework for the formation of a self-regulatory organisation (SRO) for regulated payment system operators (PSOs) in the country.
RBI will issue a letter of recognition to a group of bank and non-bank PSOs and reserves the right to approve the appointment of important positions in the board of directors for the entity.
“The SRO is expected to resolve disputes among its members internally through mutually accepted processes to ensure that members operate in a disciplined environment and even accept penal actions by the SRO,” RBI said in its statement.
In its framework, the RBI also stated that the board of the SRO will establish a code of conduct for its members and will appoint non-members to one-third capacity of the board of directors.
In a separate notification, the central bank has stated that PSOs cannot issue any new proprietary QR codes, and will have to move existing QR codes to an interoperable system by March 31, 2022. It will not affect the two interoperable QR codes -- Bharat QR and UPI QR -- both operated by the National Payments Corporation of India (NPCI).
The decision was taken based on the recommendations of a committee chaired by Dr DB Phatak constituted by the RBI which submitted its report in July. The committee had also recommended doing away with zero MDR (Merchant Discount Rate) on QR-code based payments.
The central bank said that it will continue a consultative process to standardise and improve the interoperable QR codes in the statement.
“RBI’s decision to call for application to seek eligibility as an SRO comes in the light of enhancing 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,” said Vishwas Patel, chairman of industry body Payments Council of India and director at Infibeam Avenues in a statement.
“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," he added.