Consultation Paper on the financial soundness criteria for existing Payment System Operators (PSOs) and applicants desirous of operating payment systems in IFSC

International Financial Services Centres Authority, vide Consultation Paper dated August 04, 2026, has announced an important update regarding the proposed financial soundness criteria for existing Payment System Operators (PSOs) and applicants seeking authorisation to operate payment systems in IFSC.

Key Details of the Update –

• IFSCA has issued a consultation paper proposing financial soundness criteria for existing Payment System Operators (PSOs) and prospective applicants seeking authorisation to operate payment systems in the International Financial Services Centre (IFSC).

• The proposal has been issued pursuant to the IFSCA (Payment and Settlement Systems) Regulations, 2024, which provide the framework for authorisation and regulation of payment systems in IFSC.

• The proposed framework will apply to the following categories of payment systems:
• Real Time or Deferred Large Value Payment Systems (LVPS).
• Trade Repository (TR).
• Issuers of Legal Entity Identifier (LEI).
• Card Payment Networks.
• Trade Receivables Discounting System (TReDS).
• Any other payment system authorised by IFSCA.

• Applicability: The proposal applies to:
• Existing authorised Payment System Operators (PSOs) operating in IFSC.
• Applicants seeking authorisation to operate payment systems in IFSC.

• The draft circular proposes the following financial soundness criteria:

Category of Payment System

Proposed Financial Soundness Criteria

Large Value Payment Systems (LVPS)

Entity shall have sound financial status.

Trade Repository (TR)

Entity shall maintain net worth equivalent to at least one year's operating costs, calculated on a half-yearly basis.

Issuer of Legal Entity Identifier (LEI)

Minimum net worth of USD 0.2 million.

Card Payment Networks

Entity shall have sound financial status.

Trade Receivables Discounting System (TReDS)

Minimum net worth of USD 1 million.

• The consultation paper also proposes the definition of Net Worth, which shall comprise:
• Paid-up equity capital.
• Compulsorily convertible preference shares.
• Free reserves.
• Balance in share premium account.
• Capital reserves representing surplus from sale of assets.
• Less accumulated losses, intangible assets and deferred revenue expenditure.

• The draft circular further clarifies that compulsorily convertible preference shares may be issued as cumulative or non-cumulative preference shares, provided they are mandatorily convertible into equity and the shareholders' agreement prohibits withdrawal of such capital.

• Existing authorised PSOs would be required to comply with the prescribed financial soundness criteria within six months from the date of issuance of the final circular.

• Applicants seeking authorisation would be required to satisfy the prescribed financial soundness criteria before authorisation is granted under the Payment and Settlement Systems Act, 2007.

• Effective Date: Not Mentioned. The document is a consultation paper and the proposed requirements will become applicable upon issuance of the final circular.

• Penalty/Consequence: Not Mentioned.

Actions if Any –

• Stakeholders may submit comments, views and suggestions on the draft circular to IFSCA in the prescribed format.

• Comments should include the relevant paragraph number, suggested revision and detailed rationale.

Compliance Deadline –

• Comments on the consultation paper must be submitted on or before August 28, 2026.

• Existing authorised PSOs would be required to comply with the financial soundness criteria within six months from the date of issuance of the final circular, if the proposal is finalised.