Payment operators can’t outsource core management functions: RBI

The Reserve Bank of India on Tuesday said payment system operators (PSOs) should not outsource core management functions, including risk management and internal audit, compliance and decision-making functions such as determining compliance with KYC norms.

Announcing the framework for outsourcing payment and settlement-related activities by PSOs, the RBI said the objective 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.

“This framework is applicable to non-bank PSOs insofar as it relates to their payment and settlement-related activities,” the RBI said, adding that it is applicable to all service providers, whether located in India or abroad.