IFSCA Requires Prior Nod for PSPs in Overseas Payment Systems
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- By Chetan Kulasri
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- Last Updated on 9 June, 2025
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Circular No. E. File No. IFSCA-FMPP0BR/3/2023, Dated, 06.06.2025
The International Financial Services Centres Authority (IFSCA) has issued a directive requiring all Payment Service Providers (PSPs) to seek prior approval before participating in international payment systems involving cross-border transactions or those linked to IFSC-related activities.
1. Applicability and Scope
The directive applies to any international payment system that may have a bearing on domestic IFSC transactions. In such cases, authorisation under Section 7(1) of the Payment and Settlement Systems (PSS) Act, 2007 is mandatory. This measure ensures regulatory oversight over systems that interface with India’s IFSC ecosystem.
2. Compliance Review and Reporting Requirement
All PSPs are required to:
- Conduct a compliance review of their participation in international payment systems, and
- Inform the IFSCA within 30 days, providing details of the payment systems in which they were participants as on May 31, 2025.
3. Regulatory Intent
This directive underscores IFSCA’s focus on maintaining financial integrity, systemic oversight, and cross-border risk management within the IFSC framework. It aims to ensure that PSPs operate in alignment with prescribed regulations when engaging in global payment infrastructures.
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