The Reserve Bank of India has revealed plans to boost the oversight process for the card payment networks and cross-border money transfer operators.
The central bank said if required it will conduct on-site inspections of these networks, which are usually regulated and controlled by off-site surveillance only.
This is because these networks, except the National Payments Corporation of India (NPCI), are domiciled in foreign jurisdictions.
In addition to NPCI, the card payment networks operating the country include Mastercard, Visa, American Express, and Diners Club International.
The cross-border money transfer, also known as inbound operators, include Western Union, MoneyGram, and UAE Exchange.
As part of this initiative, RBI has urged these institutions to submit a system audit report on an annual basis, including reports on their domestic infrastructure.
RBI published these steps in its document on ‘Oversight Framework for Financial Market Infrastructures (FMIs) and Retail Payment Systems (RPSs)’.
In the document, RBI noted: “Steps will be taken to conduct an on-site inspection of the card networks and cross-border money transfer (inbound service) operators and to start with, the need for an onsite visit will be examined by RBI for the purpose of interaction with the executives of the entities as well as the overseas regulators.”
Moreover, the central bank has also mandated them to ensure that the payment systems data used is stored in a system located only in India.
This data includes end-to-end transaction details, information collected, carried, processed as part of the message or payment instruction, the central bank said.