RBI/2020-21/68
DPSS.CO.PD.No.660/02.14.008/2020-21

November 17, 2020

All Scheduled Commercial Banks / Authorised Prepaid Payment Instrument Issuers /
Payment Aggregators / Payment System Providers / System Participants

Madam / Dear Sir,

Maintenance of Escrow Account with a Scheduled Commercial Bank

A reference is invited to the instructions issued by Reserve Bank of India vide (a) DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October 11, 2017 (updated as on February 28, 2020) on ‘Issuance and Operation of Prepaid Payment Instruments (PPIs)’; and (b) DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020 on ‘Regulation of Payment Aggregators (PAs) and Payment Gateways (PGs)’.

2. An authorised PPI Issuer or a PA is required to maintain an escrow account with a scheduled commercial bank on an ongoing basis. With a view to diversify risk and address business continuity concerns, it has been decided to allow one additional escrow account in a different scheduled commercial bank. The relevant instructions are being modified as per Annex 1 and 2 to this circular.

3. These directions are issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007.

Yours faithfully,

(P. Vasudevan)
Chief General Manager