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Obtaining a Payment Institution license in India

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Obtaining a PI license in India in 2020

Benefits of obtaining a payment system license in India:

  • A rapidly developing country;
  • Government's interest in attracting foreign capital;
  • The necessity for introduction of innovative technologies;
  • FinTech regulation at the legislative level.
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From a regulatory perspective, payment services are one of the most developed financial business categories in India. The PSSA provides that any person, including NBFCs, or any other person planning to provide electronic payment services, must obtain a payment institution license in India from the RBI.

PSSA is the main law governing payment institutions in India. In turn, RBI, as a payment regulator issues rules and regulations covering various aspects of the payment ecosystem.

Obtaining a PI license in India

There are some eligibility criteria that must be met by a company interested in ordering a payment system license in India. It is essential that these conditions are met:

  1. You must have a share capital of 20 million INR (about 255 thousand EUR) for Indian companies, or 50 million INR (about 638 thousand EUR) for foreign companies;
  2. Your business must be registered in accordance with the Companies Act;
  3. At least one of the company's owners must have the appropriate education and financial operations background.
Applying to the Reserve Bank of India for a PI license

When the above requirements are fulfilled, the applicant company must submit an online application on the RBI website for registration through the COSMOS system. After filing the application, the company will receive the CARN, and an application's physical copy.

This copy, along with all needed documents must be submitted to the RBI, which has jurisdiction in the place of location of applicant's registered office.

Conditions for obtaining a license for electronic payment services

To establish a company that will provide electronic payment services, you will need the appropriate technical equipment. It is also useful for obtaining an NBFC license in India. Each company that registers as NBFC, must be properly equipped and have the appropriate software. Otherwise, the RBI may reject the application.

In addition, you will need to prepare a business plan. It should consist of business goals, a description of the business model, forecasts and much more.

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It is worth noting that most of the applications for obtaining NBFC licenses are rejected due to incorrect or partially inappropriate documentation. Among other things, the list of documents needed for obtaining a payment system license includes:

  • Business plan and description of the business strategy;
  • CRC (copies);
  • MOA (copies);
  • Description of the corporate structure;
  • Description of the internal control system and compliance with AML/CFT rules;
  • Description of security measures to ensure system reliability;
  • Description of measures to support system survivability in case of failures;
  • Description of dispute resolution conditions;
  • A document confirming the availability of the necessary capital;
  • Company's profit and loss statement for the last 3 years;
  • Documents confirming the educational and professional qualifications of all directors;
  • Documents confirming the work experience of directors (at least one director must have experience of more than ten years);
  • Address of registered office.

This material was published exclusively for informational purposes, and should not be construed by the reader as an instruction, recommendations for action or legal advice. If you have any questions or difficulties related to payment system licensing process in India, IQ Decision experts will provide you with legal advice on obtaining a PI license in India and help you to order a license for a very nominal fee.

Our specialists can offer:
  • Legal assistance in preparing an application for an Indian PI license;
  • Assistance in collecting documents;
  • Assistance in preparing a business plan for a payment institution;
  • Legal support at all stages of obtaining a PI license;
  • Legal aid in opening an Indian bank account; and
  • Other related legal services.

You can request for legal advice on licensing a payment system in India, or find out more details about our services, by filling out the feedback form or calling us right now, using the contacts specified below.

  • The information outlined in the article is actual at the time of its publication.

  • Please refer to our specialists for checking possible solutions for your business.

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