The Payment System Operators (PSOs), by virtue of services they provide and the construct of models on which they operate, largely outsource their payment and settlement-related activities to various other entities.
In order to enable effective management of attendant risks in outsourcing of such activities, it was announced in the Statement on Developmental and Regulatory Policies released with the bi-monthly Monetary Policy Statement 2020-21 on 5 February 2021, that a framework for the outsourcing of payment and settlement-related activities by PSOs, will be issued by the Reserve Bank of India (RBI). Accordingly, a framework for the same is provided in the Annex. The PSOs shall ensure that all their outsourcing arrangements, including the existing ones, are in compliance with this framework by 31 March 2022.
This framework was issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).