The Reserve Bank of India vide its notification dated 17th November 2020 has instructed authorised Prepaid Payment Instruments Issuers or Payment Aggregators to maintain an escrow account with a scheduled commercial bank on an ongoing basis with a view to diversify risk and address business continuity concerns and it has decided to allow one additional escrow account in a different scheduled commercial bank.
However, only the following debits and credits shall be permitted in the escrow account in case where an additional escrow account is being maintained, credit and debit from one escrow account to the other shall also be permitted. However, inter-escrow transfers shall be avoided as far as possible and if resorted to, auditor’s certification shall clearly mention such transactions.
Further, a certificate signed by the auditor shall be submitted by the authorised entities to the respective Regional Office of DPSS, RBI on a quarterly basis certifying that the entity has been maintaining adequate balances in the escrow accounts to cover outstanding value of PPIs issued and payments due to merchants. In case, an additional escrow account is being maintained, it shall be ensured that balances in both accounts are considered for the above certification. This shall also be indicated in the certificate. The same auditor shall be employed to audit both escrow accounts. The certificate shall be submitted within a fortnight from the end of quarter to which it pertains.
