RBI bans investment in PSOs from sectors that are not FATF compliant – rbi bans investment in psos from sectors that are not fatf compliant

RBI bans investment in PSOs from sectors that are not FATF compliant – rbi bans investment in psos from sectors that are not fatf compliant

New Delhi, Jun 14 (PTI) The Reserve Bank of India on Monday banned investment in Payment System Operators (PSOs) from new entities in sectors where the financial system is designed to deal with money laundering and terrorism financing activities. is weak.

The Finance Action Task Force (FATF) from time to time identifies areas with weak systems to combat money laundering and terrorism financing activities.

Areas that do not fall into the high risk and high monitoring requirements are considered FATF compliant.

“Investment in payment system operators from sectors that are not compliant with the FATF norms will not be treated at par with those sectors where the provisions of the Finance Action Task Force are optimally compliant,” RBI said in a notification.

It said that entities/investors in areas with weak law enforcement laws to combat money laundering and financing of terrorist activities, as per FATF, would not be allowed to directly or indirectly acquire PSOs.

As per the notification, “the aggregate direct investment (direct or indirect) from such sectors should be less than 20 per cent of the voting rights (potentially voting rights) of the PSOs. The restriction will be applicable only to new investors.

RBI said existing investors of PSOs who have made investments prior to FATF classification can continue their investments. Such investors can bring in additional investments under the rules to support business in the country.

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The FATF is the global money laundering and terrorism financing watchdog.

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