PA-CB Guidelines by RBI: OPGSP Update 2024

As businesses are increasingly participating in global trade, the need for secure and compliant cross-border payment systems has become more apparent. To address this, the Reserve Bank of India (RBI) released a master circular on October 31, 2023. This introduced new guidelines for entities and organizations facilitating international payments. This circular officially defined a new category of entities called Payment Aggregators - Cross Border (PA-CB).

If you're a fintech, exporter, or cross-border service provider, this update significantly changes how you operate. In this article, we will take a look at everything you need to know.

To understand why the PA-CB framework matters, it is helpful to examine the rules that preceded it.

Before this circular, cross-border payments were primarily handled through Online Payment Gateway Service Providers (OPGSPs) under a 2015 RBI framework. These OPGSPs were not required to hold a license. They only needed a tie-up with an AD Category-I bank to facilitate payments.

That changed with the new master circular (RBI/2023 24/80 CO.DPSS.POLC.No.S-786/02-14-008/2023-24). Under the new system set by the RBI:

• All entities (banks and non-banks) facilitating online cross-border payments for import and export of permissible goods and services came under RBI regulation.
• Non-banks were required to register as PA-CBs and obtain approval to operate.
• OPGSPs, as a category, began being phased out. No new OPGSPs could be set up.

The release of this circular aligned with the RBI's Payments Vision 2025, which focused on bringing all payment aggregators, including non-bank players, within its regulatory circle of influence.

Key changes and updates

The 2023 circular introduced several reforms that reshaped the way cross-border payment aggregation was handled in India. Consequently, the landscape looks a lot different today than it did a decade ago. Some of the most significant updates in the 2023 circular include:

• RBI Authorization Made Mandatory
• Non-bank entities could no longer operate informally through partnerships with AD banks. They were required to get authorization from the RBI to act as PA-CBs.
• Transaction Cap Introduced
• A per-unit cap of ₹25 lakh was set for goods and services processed via PA-CBs. This replaced the older OPGSP limits. 
• Operational Classification of PA-CBs
• Entities were categorized as Export Only, Import Only, or both. Each type needed to maintain separate accounts and comply with specific requirements.
• Stricter KYC and Due Diligence Norms
• KYC requirements were changed significantly. PA-CBs had to follow RBI’s KYC Master Directions and conduct additional checks when the per-unit transaction value exceeded ₹2.5 lakh.
• Mandatory FIU-IND Registration
• Non-bank PA-CBs needed to register with the Financial Intelligence Unit of India before applying to the RBI. This ensured compliance with anti-money laundering and reporting standards.
• Technology and Compliance Standards Enforced
• Lastly, PA-CBs were expected to adopt governance, tech, and risk standards outlined in the 2020 RBI guidelines for Payment Aggregators, covering areas such as security, dispute resolution, and fraud prevention.

Unlike OPGSPs, PA-CBs are now considered full-fledged payment systems. This means stricter scrutiny, compliance obligations, and transparency.

RBI has also categorized PA-CBs based on their operational focus. We will explore this in the next section.

The RBI classifies PA-CBs into three categories based on the type of cross-border activity they conduct.

1. Export Only PA-CB (PA-CB-E)

Entities in this category handle cross-border payments for Indian exporters. They must:

• Open Export Collection Accounts (ECAs) with an AD Category-I bank, where they received export proceeds.
• Ensure that all goods and services being exported were permissible under India’s Foreign Trade Policy at the time.
• Conduct thorough due diligence on merchants, e-commerce platforms, or any other partners involved in processing export transactions, in line with RBI’s compliance standards.

2. Import Only PA-CB (PA-CB-I)

These entities help Indian importers pay for international purchases. Their duties include:

• Setting up Import Collection Accounts (ICAs) with an AD bank, through which funds were routed to international sellers.
• Using escrow accounts to temporarily hold domestic funds before transferring them to the ICA, adding a layer of transactional integrity.
• Carrying out Know Your Customer (KYC) verification and enhanced diligence for Indian importers, especially when the value of individual goods or services imported exceeded ₹2.5 lakh.

3. Export and Import PA-CB (PA-CB-E&I)

Finally, some PA-CBs engage in both export and import payment facilitation. These entities have to comply with all obligations applicable to both export and import PA-CBs. Additionally, they need to maintain separate accounts for each activity.

Along with classification, financial stability is another requirement. Here’s what the RBI mandates when it comes to net worth.

Any instance of non-compliance with these requirements would have resulted in the closure of PA-CB accounts. Let’s now compare this with the older OPGSP model.

Snapshot Comparison Between OPGSP Circular (2015) and PA-CB Circular (2023) 

Here's a quick side-by-side snapshot to clarify the differences.

If you're planning to enter the market or continue operations, understanding the application process is very important. With the key differences clarified, let’s walk through the application process that new PA-CBs must follow.

Non-bank entities acting as PA-CBs must follow this step-by-step process outlined by the RBI:

1. Register with FIU-IND (Financial Intelligence Unit – India).
2. Prepare and submit Form A to the Department of Payment and Settlement Systems (DPSS), RBI. Form A includes:

• Part A: Company profile
• Part B: Payment system architecture
• Part C: Financial information
• Part D: Governance, ownership, compliance

1. Receive in-principle approval (valid for 6 months)
2. Undergo a System Audit Report (SAR) during the approval window. This includes questions from the RBI about shareholding, processes, or tech readiness.
3. Receive final authorization
4. In addition, they must ensure full compliance within three months of approval, including:

• Data protection and fraud prevention controls
• Grievance redressal systems
• Adherence to PA-PG guidelines issued in March 2020

Once authorized, PA-CBs had to maintain ongoing compliance and be audit-ready. This marks a shift towards a transparent cross-border payments ecosystem.

The RBI’s PA-CB circular reshaped the way Indian companies handle cross-border payments. For non-bank fintechs, it opened a formal route to manage import and export transactions on their own, but with new, stricter rules and more compliance responsibilities.

At the same time, this opened up space for new business models including embedded finance, QR code-based collections, currency hedging, virtual account management, and recurring cross-border billing.

The RBI’s 2023 circular on PA-CBs marks a clear shift toward regulatory clarity. It aims to bring transparency to a space that was previously running under informal or bank-tied frameworks. If you have a business dealing in global payments, staying compliant is now non-negotiable. It is important to start preparing your RBI license application early.