Reserve Bank of India Recognises SRPA as Self-Regulatory Organisation for Payment System Operators

The Reserve Bank of India (RBI) has taken a significant step towards enhancing the regulatory framework for Payment System Operators (PSOs) in India. On October 22, 2020, the RBI introduced a framework for the recognition of Self-Regulatory Organisations (SROs) for PSOs. 

This framework aims to ensure a more robust and transparent regulatory environment for payment systems in India.

SRPA Granted SRO Status by RBI

On March 21, 2024, the RBI issued an "Omnibus Framework" inviting groups and associations to apply for recognition as SROs for regulated entities under its jurisdiction. Among the applications received, the Self-Regulated PSO Association (SRPA) emerged as a significant contender. The RBI has now granted SRPA the status of a recognised SRO for PSOs, acknowledging its role in maintaining a self-regulatory framework for the payment systems industry.

This recognition is a vital development as it allows SRPA to implement and enforce industry-wide standards for PSOs, ensuring greater transparency, accountability, and compliance with regulatory guidelines. SRPA’s role will be pivotal in overseeing member PSOs, facilitating dispute resolution, and promoting adherence to ethical and operational standards.

Impact of SRO Recognition

The recognition of SRPA as an SRO is expected to bring several benefits to the payment systems industry. By acting as a self-regulatory body, SRPA will be able to regulate the conduct of its members, ensuring that they operate with integrity and comply with the regulatory requirements set by the RBI. This will, in turn, enhance consumer confidence in digital payment systems and foster a more secure and reliable payment ecosystem.

Moreover, as India continues to experience rapid growth in digital payments, the need for robust self-regulation becomes even more critical. The establishment of SRPA as an SRO will help mitigate risks and ensure that PSOs align with best practices and evolving regulatory requirements.

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The Role of SRPA in the Industry

SRPA’s role as a self-regulatory organisation will involve setting operational standards, promoting fair competition, and ensuring that PSOs adhere to strict security and privacy norms. The association will also be responsible for resolving conflicts within the industry, offering guidance on compliance, and collaborating with the RBI to align industry practices with national payment regulations.

With this new recognition, SRPA is now in a position to help strengthen the entire payment systems ecosystem by fostering a culture of self-regulation among its members.

Conclusion

The Reserve Bank of India’s recognition of SRPA as a Self-Regulatory Organisation marks a pivotal moment for India’s payment systems sector. As digital payments continue to grow in popularity, the role of SRPA in enforcing self-regulation and maintaining high operational standards will be crucial to the industry’s long-term success and stability.

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