RBI says payment operators cannot outsource core functions
text_fields
Mumbai: The RBI said that payment system operators are not allowed to outsource core management functions like risk management, internal audit, compliance, and decision-making functions related to KYC norms.
Payment system operations such as netting and settlement, transaction management like reconciliation, reporting and item processing, giving sanctions to merchants for acquiring, managing customer data, risk management, information technology, and information security management are described as core management functions.
The organisation was announcing the framework for outsourcing payment and settlement-related activities by PSOs. Unless the service provider is a group company of the PSO, it should not be owned or controlled by any director or officer of the PSO or their relatives. The framework is applicable to all service providers, whether located in India or abroad.
This framework is applicable to non-bank PSOs insofar as it relates to their payment and settlement-related activities, said RBI.
The Reserve Bank of India said that the objective of the announcement is to put in place minimum standards to manage risks in outsourcing of payment and settlement-related activities including tasks such as onboarding customers and IT-based services, reported The Indian Express.