The Reserve Bank of India (RBI) has designated the Self-Regulated PSO Association (SRPA) as a self-regulatory organisation (SRO) for payment system operators (PSOs).

In a formal statement, the central bank said: “An application was received from ‘Self-Regulated PSO Association (SRPA)’ seeking to serve as an SRO for PSOs. The application has been duly considered and it has been decided to recognise SRPA as an SRO for PSOs.”

This development builds on the RBI’s earlier introduction of regulatory guidelines, including the ‘framework for recognition of self-regulatory organisation (SRO) for payment system operators’, in October 2020, as well as the ‘Omnibus framework for recognition of SROs for regulated entities of the Reserve Bank’ rolled out in March 2024.

The omnibus framework sets out general principles on governance, eligibility requirements, responsibilities, objectives, and application procedures that apply to any SRO seeking recognition from the central bank.

The RBI indicated that additional sector-specific rules, such as those concerning the number of SROs or membership structure, will be issued by its departments when necessary.

With this new status, SRPA will act as the main point of contact between RBI and companies operating within India’s payments ecosystem, like PhonePe, Paytm, Razorpay, and Mastercard, according to ET Edge Insights.

The association will be responsible for establishing and monitoring industry standards on data protection, compliance, and consumer safeguards.

Other duties include facilitating mechanisms for resolving grievances and ensuring ethical behaviour among members while serving as the sector’s collective voice before both regulatory authorities and government agencies.

Although ultimate regulatory authority remains with RBI, operational supervision and disciplinary coordination tasks aimed at supporting a transparent payments sector will now fall under SRPA’s remit.

The central bank views this move as an important step in advancing self-governance within India’s digital payments space.

The central bank’s decision comes after previous recognitions of other sector-specific SROs, such as the Finance Industry Development Council (FIDC) for non-banking finance companies last month and the FinTech Association for Consumer Empowerment (FACE) in August last year.

Meanwhile in a separate development, NPCI International Payments Limited (NIPL), a subsidiary of the National Payments Corporation of India (NPCI), has formed a collaboration with Bahrain fintech operator BENEFIT.

This collaboration aims to facilitate real-time money transfers between India and Bahrain by connecting India’s Unified Payments Interface (UPI) with Bahrain’s Electronic Fund Transfer System (EFTS), specifically via Fawri+.

With oversight from both the RBI and the Central Bank of Bahrain, this initiative marks an advance in improving cross-border financial connectivity and fostering digital financial inclusion between the two nations.