Maintenance of Escrow Account with a Scheduled Commercial Bank

Last updated: 18 November 2020

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The Reserve Bank of India (RBI) has issued new guidelines allowing authorised Prepaid Payment Instrument (PPI) Issuers and Payment Aggregators (PAs) to maintain an additional escrow account with a different scheduled commercial bank. This change aims to diversify risk and address business continuity concerns. The modifications update existing instructions for PPIs and PAs, clarifying conditions for maintaining these accounts, including reporting requirements and permitted transactions.

Reserve Bank of India RBI/2020-21/68 DPSS.CO.PD.No.660/02.14.008/2020-21 November 17, 2020 All Scheduled Commercial Banks / Authorised Prepaid Payment Instrument Issuers / Payment Aggregators / Payment System Providers / System Participants Madam / Dear Sir, Maintenance of Escrow Account with a Scheduled Commercial Bank A reference is invited to the instructions issued by Reserve Bank of India vide (a)DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October 11, 2017(updated as on F

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FAQ :

Authorised PPI Issuers and Payment Aggregators can now maintain an additional escrow account with a different scheduled commercial bank, in addition to their existing one.

The RBI has allowed this to diversify risk and address business continuity concerns for these entities.

These instructions apply to all authorised Prepaid Payment Instrument (PPI) Issuers and Payment Aggregators (PAs).

If an additional escrow account is maintained, balances in both accounts must be considered for auditor certifications submitted to the RBI. The same auditor should audit both accounts.

Yes, auditor certifications must now consider balances in both escrow accounts if two are maintained, and this must be indicated in the certificate.

The escrow account is used to hold funds collected by PPI issuers and PAs, with specific debits and credits permitted, primarily for making payments to merchants and PPI holders.

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Notification No : RBI/2020-21/68 DPSS.CO.PD.No.660/02.14.008/2020-21
Published in Community & General
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11996&Mode=0

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