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Definition of net-worth under PSS act.2007

The Payment System operators including issuers of prepaid instruments, overseas principals for money transfer scheme, card network operators etc. within the country has to obtain authorization from RBI under PSS act.2007. Such payment system operators who apply to RBI for authorization needs to comply with the requirements of minimum paid-up capital and net-worth, as applicable for nature of business.

As per the latest guidelines of RBI  the net-worth of a entity under PSS Act.2007 is defined as below.

Net-worth’ of an entity will consist of ‘paid up equity capital, free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of assets but not reserves created by revaluation of assets’ adjusted for ‘accumulated loss balance, book value of intangible assets and Deferred Revenue Expenditure, if any’.

This definition would apply for the purpose of all approvals under the Payment and Settlement System Act.2007

Source: RBI/2014-15/411/DPSS.CO.AD.No.1344 02.27.005/2014-15 dated 16.1.2015


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