Circular No. IFSCA-FMPP0BR/3/2023-Banking 2026-27/01, Dated 10.04.2026
The International Financial Services Centres Authority (IFSCA) has clarified that Payment Service Providers (PSPs) must obtain prior approval to participate in Rupee Drawing Arrangements (RDA) as non-resident Exchange Houses.
1. Requirement of Prior Approval
- PSPs intending to participate in RDA must seek prior approval from IFSCA
- This aligns PSP participation with existing regulatory controls applicable to cross-border payment arrangements
2. Submission of Compliance Framework
PSPs are required to submit a detailed framework demonstrating compliance with:
- Anti-Money Laundering (AML) norms
- Combating Financing of Terrorism (CFT) requirements
- Know Your Customer (KYC) guidelines
- Other applicable legal and regulatory provisions
3. Extension of Existing Framework
- The clarification extends existing approval requirements applicable to international payment systems within IFSC
- Ensures uniform regulatory oversight across all such participants
4. Objective of the Clarification
The measure aims to:
- Strengthen regulatory control over cross-border remittance channels
- Ensure robust compliance and risk management
- Enhance integrity and security of payment systems in IFSC
5. Conclusion
The mandate reinforces IFSCA’s commitment to a secure, compliant, and well-regulated payment ecosystem, ensuring that PSP participation in RDA is subject to stringent approval and oversight standards.
Click Here To Read The Full Circular
The post IFSCA Mandates Approval for PSPs in RDA appeared first on Taxmann Blog.
