Upping the game of cross-border business

In an ever-evolving world of digital commerce, cross-border payments have become increasingly essential for businesses engaged in international trade. 

To ensure the efficiency and security of these transactions, the Reserve Bank of India (RBI) has introduced new regulations for entities facilitating cross-border payment transactions. These regulations aim to encompass all aspects of payment aggregation, providing a clear framework for banks, payment aggregators, and those engaged in import and export activities.        


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RBI has introduced new guidelines aimed at regulating entities involved in handling payment and settlement processes for online cross-border import and export transactions. These guidelines specifically target Payment Aggregators (PAs), which are entities responsible for facilitating online domestic transactions.

Regulatory framework for cross-border payment aggregators

Payment Aggregator-Cross Border (PA-CB) refers to entities that facilitate cross-border payment transactions for the import and export of permissible goods and services in online mode. These regulations target entities involved in online cross-border payments to streamline and regulate their operations.

  • Export only PA-CB (PA-CB-E)
  • Import only PA-CB (PA-CB-I)
  • Export and Import PA-CB (PA-CB-E&I)

Authorization for PA-CB activities varies for AD Category-I banks and non-bank entities. AD Category-I banks are pre-authorized to engage in PA-CB operations, eliminating the need for separate approval from the RBI.

On the other hand, non-bank entities currently involved in PA-CB services are required to apply for authorization from the RBI by April 30, 2024. Their application must specify the type of PA-CB activity they intend to pursue, be it export-only, import-only, or both. Compliance with a comprehensive set of guidelines encompassing governance, merchant onboarding, customer grievance resolution, dispute management, technology, security, fraud prevention, and risk management is obligatory for both existing and prospective PA-CBs.

Additionally, non-bank PA-CBs must register with the Financial Intelligence Unit-India (FIU-IND) as part of the regulatory process, fostering a well-regulated environment for cross-border payment transactions in India.

Net worth requirements for PA-CBs

The RBI’s new regulations introduce specific net worth criteria for PA-CB entities in India. Existing non-bank PA-CBs are required to maintain a minimum net worth of INR 15 crore when submitting their authorization application, and this amount must increase to INR 25 crore by March 31, 2026. In contrast, newly established non-bank PA-CBs are expected to have an INR 15 crore net worth at the time of application and are given a three-year grace period to achieve a net worth of INR 25 crore. To substantiate their financial standing, non-bank PA-CBs must provide a certificate from their statutory auditor, along with audited financial statements.

The regulations also mandate that PA-CBs failing to meet the stipulated net worth requirements or those not applying for authorization within the specified timeframe must cease their PA-CB activities by July 31, 2024. These measures aim to ensure the financial stability and integrity of cross-border payment services in India, providing a robust framework for all stakeholders involved in this domain.

Import and export-specific requirements

  1. Import-only PA-CBs: In accordance with the new RBI regulations, PA-CB entities engaged in import-only activities are mandated to maintain an Import Collection Account (ICA) with an AD Category-I scheduled commercial bank. This ICA serves as a pivotal component of their operations, where payments for imports are received in the PA’s escrow account and subsequently transferred to the ICA for the purpose of onward transactions to foreign merchants. This meticulous approach ensures transparency and compliance in cross-border import transactions, contributing to a more secure and streamlined process.
  1. Export-only PA-CBs: Export-only PA-CBs are required to uphold an Export Collection Account (ECA), which can be denominated in Indian Rupees (INR) and/or foreign currency. This account functions as a repository for all export proceeds, ensuring that the transactions are adequately tracked and managed.
  1. Import and export PA-CBs: PA-CBs engaged in both import and export activities must meticulously adhere to the specific requirements for both ICAs and ECAs, maintaining a clear separation between the two types of transactions. These measures collectively reinforce the integrity and efficiency of cross-border payment activities in India.

ICA and ECA as designated payment systems

The operations of PA-CBs, with the authorization provided by the RBI, are deemed as “designated payment systems” under the Payment and Settlement Systems Act. Additionally, specific instructions on debits and credits are permissible for the ICA and ECA of PA-CBs.

With the authorization granted by the Reserve Bank of India (RBI), the operations of PA-CB entities are recognized as “designated payment systems” under the Payment and Settlement Systems Act. This designation holds significant implications for the regulatory oversight of these entities, as it places them under the purview of the central bank. It ensures that the RBI has direct regulatory control over the operations of PA-CBs engaged in facilitating cross-border payment transactions for import and export activities.

Furthermore, the specific instructions concerning debits and credits associated with ICA and ECA of PA-CBs play a crucial role in maintaining financial transparency and accountability. These instructions are designed to ensure that all transactions are conducted in a secure and compliant manner, adhering to regulatory standards. By providing clear guidelines for the management of funds in these accounts, the RBI strengthens its oversight, enhancing the reliability and integrity of cross-border payment systems in India.


RBI’s latest regulations for cross-border payment aggregators represent a significant stride toward enhancing the safety and efficiency of online cross-border transactions for import and export activities. These guidelines establish a clear framework for Payment Aggregators (PAs) and delineate specific requirements for both AD Category-I banks and non-bank entities.

The introduction of net worth requirements, the distinction between ICA and ECA, and the recognition of PA-CBs as designated payment systems underscore the RBI’s dedication to regulating and strengthening the cross-border payment ecosystem. These changes aim to provide a secure and seamless environment for international trade, ensuring compliance with FEMA requirements and benefiting businesses and consumers alike.

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