Online Payment Gateway Service Providers (OPGSPs)

Can OPGSPs operate without opening NOSTRO account?


Banking  guidelines on operation by OPGSPs without opening a  NOSTRO account.


How does OPGSPs system work in Export and Import payment?  What is the process to operate with OPGSPs?  What is the value limit under OPGSPs? Can OPGSPs operate without opening NOSTRO account?

Payment against exported goods has to be received from foreign country through Authorized Dealer Bank as per FEMA Regulations 2016.  The amount of export proceeds can be paid by overseas buyer through Debit card, Credit card or any other means but as per FEMA Regulations. 

The payment against invoice amount of exported goods can be received through OPGSPs ( Online Payment Gateway Service Providers)

As per RBI guidelines to receive payments through OPGSPs, the following conditions are applicable:

A.3 Manner of receipt and payment

(i) The amount representing the full export value of the goods exported shall be received through an AD Bank in the manner specified in the Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2016 notified vide Notification No. FEMA.14 (R)/2016-RB dated May 02, 2016.

(ii) When payment for goods sold to overseas buyers during their visits is received in this manner, EDF (duplicate) Export Declaration Form should be released by the AD Category – I banks only on receipt of funds in their Nostro account or if the AD Category – I bank concerned is not the Credit Card servicing bank, on production of a certificate by the exporter from the Credit Card servicing bank in India to the effect that it has received the equivalent amount in foreign exchange, AD Category – I banks may also receive payment for exports made out of India by debit to the credit card of an importer where the reimbursement from the card issuing bank/ organization will be received in foreign exchange.

(iii) Processing of export related receipts through Online Payment Gateway Service Providers (OPGSPs)

Authorised Dealer Category – I (AD Category – I) banks have been allowed to offer the facility of repatriation of export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers (OPGSPs) subject to the following conditions –

a) The AD Category-I banks offering this facility shall carry out the due diligence of the OPGSP.

b) This facility shall only be available for export of goods and services of value not exceeding USD 10,000 (US Dollar ten thousand).

c) AD Category-I banks providing such facilities shall open a NOSTRO collection account for receipt of the export related payments facilitated through such arrangements. Where the exporters availing of this facility are required to open notional accounts with the OPGSP, it shall be ensured that no funds are allowed to be retained in such accounts and all receipts should be automatically swept and pooled into the NOSTRO collection account opened by the AD Category-I bank.

d) A separate NOSTRO collection account may be maintained for each OPGSP or the bank should be able to delineate the transactions in the NOSTRO account of each OPGSP.

e) Under this arrangement, the permissible debits to the NOSTRO collection account are for repatriation of funds representing export proceeds to India for credit to the exporters’ account, payment of fee/commission to the OPGSP as per the predetermined rates / frequency/ arrangement; and charge back to the importer where the exporter has failed in discharging his obligations under the sale contract.

f) The balances held in the NOSTRO collection account shall be repatriated and credited to the respective exporter's account with a bank in India immediately on receipt of the confirmation from the importer and, in no case, later than seven days from the date of credit to the NOSTRO collection account.

g) AD Category -I banks shall satisfy themselves as to the bona-fides of the transactions and ensure that the purpose codes reported to the Reserve Bank in the online payment gateways are appropriate.

h) AD Category -I banks shall submit all the relevant information relating to any transaction under this arrangement to the Reserve Bank, as and when advised to do so.

i) Each NOSTRO collection account should be subject to reconciliation and audit on a quarterly basis.

j) Resolution of all payment related complaints of exporters in India shall remain the responsibility of the OPGSP concerned.

k) AD Category-I banks desirous of entering into such an arrangement/s should report the details of each such arrangement as and when entered into to the Foreign Exchange Department, Central Office, Reserve Bank of India, Mumbai.

l)  A start-up can realise the receivables of its overseas subsidiary and repatriate them through Online Payment Gateway Service Providers (OPGSPs).

The above details explains about OPGSPs system mechanism in  Export and Import payment,  the process to operate with OPGSPs,  the value limit under OPGSPs, OPSPs operation with opening NOSTRO account etc.

Hope the above information about OPGSPs payment system in import and export helps you.

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