Payment operators can’t outsource core administration capabilities: RBI

The Reserve Bank of India on Tuesday mentioned cost system operators (PSOs) mustn’t outsource core administration capabilities, together with danger administration and inner audit, compliance and decision-making capabilities equivalent to figuring out compliance with KYC norms.
Announcing the framework for outsourcing cost and settlement-related actions by PSOs, the RBI mentioned the target is to place in place minimal requirements to handle dangers in outsourcing of cost and settlement-related actions together with duties equivalent to onboarding clients and IT-based providers.
“This framework is applicable to non-bank PSOs insofar as it relates to their payment and settlement-related activities,” the RBI mentioned, including that it’s relevant to all service suppliers, whether or not situated in India or overseas.
The Reserve Bank mentioned core administration capabilities would come with administration of cost system operations equivalent to netting and settlement, transaction administration like reconciliation, reporting and merchandise processing, in accordance sanction to retailers for buying, managing buyer knowledge, danger administration, info expertise and knowledge safety administration.

The service supplier, except it’s a group firm of the PSO, shouldn’t be owned or managed by any director or officer of the PSO or their family.
The RBI framework has additional mentioned that the PSO will fastidiously consider the necessity for outsourcing its crucial processes and actions and likewise the number of service suppliers based mostly on complete danger evaluation.