ll{ABARD

NB.DoS.HO.POL. t 3+11 tJ-1t2017-18

14 December 2017
Circular n". -t03 /DoS t2017

The Chairman, All RRBs

The Managing Directors / Chief Executive Officers of
A!! the State Cooperative Banks /
District Central Cooperative

Madam / Dear Sir

on-boardinq permission for BHIM Aadhaar (as acquirer) / Up!

As you are aware BH|M-Aadhaar (as acquirer/UPl) is a digital payment acceptance
solution which enables the authorised merchant to accept payments ior goods/services
using his/her Android smartphone and fingerprint reader, from customers hiving Aadhaar
seeded bank accounts, by authenticating the customer's biometrics. The transaction will
be interoperable in nature allowing any other participating bank customer to also transact
on the application.

2. Some banks had sought permission to go-live on BHIM Aadhaar Pay as an

acquirer and UPI (both issuer & acquirer) in consultation with National payments
Corporation of lndia (NPCI). The issue was examined by us in consultation with the
Reserve Bank of lndia and it is clarified that the Department of Payment and Setflement
Systems, RBI has not issued any instructions on "merchant acquiring". Banks desirous of
providing mobile banking services may seek prior onetime approvalfrom Reserve Bank
of lndia by furnishing full details of the proposal.
3. The Regional Rural Banks (RRBs) may approach the Department of Banking
Regulation(DBR), RBI for necessary approval, if any, to enter into merchant acquisition
business, under the payment system, including for BHIM Aadhaar Pay, Unified Payment
lnterface (UPl), etc. Similarly, Rural Cooperative Banks (StCBs & DCCBs) may approach
the Department of Cooperative Banking Regulation(DcBR), RBl, in this regard.

4. Please acknowledge the receipt of this circular to our Regional Office.

(K Venkateswara Rao)
Chief General Manager
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National Bank for Agriculture and Rural Development
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Department of Supervision
Plot No. C'24,'G' Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 4oo o51 . Til.: +9r 22 2653 1834 . Fax: +9t zz z65g oro3 . E-mail: dos@nabard.org