Introduction:
In early March 2020, a regulatory moratorium imposed on a private bank in India froze the country’s digital payments ecosystem. Many payment aggregators (“PA”) and payment gateways (“PG”) had set up nodal accounts with this bank, including others, and it raised a question on whether the customer funds pooled in those accounts were bankruptcy ‘remote’. Within 10 days, the Reserve Bank of India (“RBI”) issued the payment aggregator and gateway guidelines (“PA/PG Guidelines”) on March 17, 2020, under the Payment and Settlement Systems Act, 2007 (“PSSA”), to regulate PAs and prescribe baseline technology standards for PAs and PGs.