The Board of Directors of Bangladesh Bank has issued Bangladesh Payment and Settlement Systems Regulations-2014 (BPSSR 2014) with a view to promoting, regulating and ensuring secured and efficient payment systems in Bangladesh. In accordance with the paragraph 2 and 3 of section 5.3 of Bangladesh Payment and Settlement Systems Regulations-2014, this ‘Approval Procedure of Payment System Operator (PSO)/Payment Service Provider (PSP)’ has been issued.
Objectives: The following issues are specified by this procedure:
- The process and documents required for submission of application for PSO/PSP license;
- Eligibility criteria for PSO/PSP license; and
- Approval process of PSO/PSP.
3.0 Payment System Operator (PSO) and Payment Service Provider (PSP)
3.1 Payment System Operator (PSO): According to BPSSR 2014, ‘Payment System Operator (PSO) refers to an entity licensed by the Bangladesh Bank for operating a settlement system for payment activities between/among participants of which the principal participant must be a scheduled bank maintaining accounts with the Bangladesh Bank for meeting Cash Reserve Requirements.’ In line with the definition, a PSO shall have the following characteristics:
a) PSO shall be licensed by Bangladesh Bank;
b) PSO shall provide the payment services as approved in its license;
c) PSO shall not issue e-money or payment instrument in any form.
d) Settlement of transactions shall be done through scheduled commercial bank.
3.2 Payment Service Provider (PSP): According to BPSSR 2014, ‘Payment Service Provider (PSP) refers to an entity licensed and approved by the Bangladesh Bank that provides payment service(s) to its participants or to a payment system for the purpose of facilitating payment(s) or payment processes and settling their transactions through a scheduled bank maintaining accounts with the Bangladesh Bank for meeting Cash Reserve Requirements.’ In line with the definition, a PSP shall have the following characteristics:
a) PSP shall be licensed by Bangladesh Bank;
b) PSP shall provide the payment services as approved in its license;
c) PSP may issue e-money or payment instrument under terms and conditions of its license and subsequent rules and regulation of Bangladesh Bank;
d) PSP shall maintain ‘Trust Cum Settlement Account’ with scheduled commercial bank.
4.0 Eligibility
4.1 Eligibility for PSO
- PSO must be a company incorporated under the Companies Act of 1994;
- The paid up capital of the company shall not be less than BDT. 5,000,000/- (Five Million). However, Bangladesh Bank may refix minimum paid up capital based on services and business exposure;
- Key personnel of the company shall have minimum 3 years experience/exposure in the relevant field.
4.2 Eligibility for PSP
- PSP must be a company incorporated under the Companies Act of 1994;
- The paid up capital of the company shall not be less than BDT. 200,000,000/- (Two Hundred Million). However, Bangladesh Bank may refix minimum paid up capital based on services and business exposure;
- Key personnel of the company shall have minimum 3 years experience/ exposure in the relevant field;
- Appropriate Technology infrastructure shall be maintained within Bangladesh.
5.0 Application Procedure Interested institutions should apply in prescribed format (Annexure-A) to Bangladesh Bank with required documents (List of documents has been given in Annexure-B). A non-refundable demand draft of Tk. 25,000.00 (Twenty Five Thousand) in favor of General Manager, Payment Systems Department should be given as application fee.
6.0 Approval Procedure
The approval process will be conducted in two phases. In the first phase, PSD shall issue a ‘No Objection Certificate (NOC)’ and in second phase, PSD may provide final approval to the eligible company based on following process.
Phase-1:
a) Preliminary scrutiny of the documents shall be done by PSD. After preliminary scrutiny,
I) Bangladesh Bank may ask for revised or additional document(s) if necessary.
II) Bangladesh Bank may reject the application with a written notice, if documents and/or proposal are not consistent with proposed services.
III) The documents shall be forwarded to the evaluation committee(s), if documents are found satisfactory.
b) Evaluation committee(s) will evaluate the documents and submit report(s).
c) Based on the score of the evaluation report(s), decision of issuing/ not issuing NOC will be taken by Bangladesh Bank and communicated to the applicant.
6.2 Phase 2:
a) The applicant, received NOC for deploying the system, shall submit a declaration in prescribed format (Annexure-C) within the stipulated period regarding readiness of the proposed infrastructure. An onsite inspection team will be formed to conduct onsite inspection.
b) Approval may be given based on satisfactory inspection report and if all the requirements of NOC are met properly.
7.0 Fees and Payment Method
7.1 Application Fee: A non-refundable pay order/demand draft of Tk. 25,000.00 (Twenty Five Thousand only) shall be required to submit with application.
7.2 License Fee: A non-refundable pay order/demand draft of Tk. 1,00,000.00 (One Lac only) shall be required to submit during final approval.
