IFSCA Announces New Financial Rules for Payment System Operators, Sets Six-Month Deadline

IFSCA has introduced financial requirements for payment system operators in International Financial Services Centres, setting minimum net-worth thresholds, auditor certification rules and a six-month compliance deadline for existing operators.

IFSCA Introduces New Financial Rules for Payment System Operators in IFSCs

The International Financial Services Centres Authority (IFSCA) has introduced financial requirements for existing payment system operators (PSOs) and entities seeking to establish payment system operations in International Financial Services Centres (IFSCs).

In a circular dated October 27, 2026, the regulator outlined minimum net-worth requirements for specific categories of operators. It also directed certain other operators, including large-value payment systems and card payment networks, to maintain a sound financial position.

The new framework aims to establish financial standards for payment system operators and strengthen compliance monitoring across the IFSC ecosystem.

IFSCA Sets a Six-Month Compliance Deadline

Under the new circular, existing payment system operators have six months from October 27, 2026, to meet the applicable financial requirements.

Operators must also submit a certificate from their statutory auditor confirming compliance for the preceding financial year. This certificate must be provided by September 30 every year.

The requirements apply according to the category of payment system operator and the financial criteria prescribed by IFSCA. The circular took effect immediately on October 27, 2026, meaning the new rules are applicable from the date of issuance.

Minimum Net-Worth Requirements for Different Operators

IFSCA has prescribed specific financial thresholds for certain categories of entities. Other categories must demonstrate that they maintain a sound financial position.

Trade Receivables Discounting System (TReDS)

Operators of Trade Receivables Discounting Systems must maintain a minimum net worth of $1 million.

TReDS platforms facilitate the financing of trade receivables, helping eligible businesses obtain funds against invoices.

Legal Entity Identifier (LEI) Issuers

Entities issuing Legal Entity Identifiers must maintain a minimum net worth of $200,000.

LEIs are identification codes used to identify legal entities participating in financial transactions.

Trade Repositories

Trade repositories must maintain net worth equivalent to at least one year of operating costs.

They are also required to calculate this amount every six months, allowing their financial position to be assessed regularly against their operating expenditure.

Large-Value Payment Systems

Operators of large-value payment systems are required to maintain a sound financial position. The circular does not prescribe a specific minimum net-worth amount for this category in the provided details.

Card Payment Networks

Card payment networks must also maintain a sound financial position under the new framework.

These requirements establish different financial expectations depending on the nature and category of payment system operations.

How IFSCA Calculates Net Worth

The circular also clarifies the financial components used to determine an entity's net worth. The calculation broadly includes paid-up equity capital, eligible reserves and certain preference shares that are required to be converted into equity.

However, certain items must be deducted when calculating net worth. These include accumulated losses, intangible assets and deferred revenue expenditure, wherever applicable.

Reserves arising from the revaluation of assets cannot be included in the calculation.

These provisions help establish a consistent basis for assessing the financial resources available to payment system operators under IFSCA's framework.

What New Applicants Must Do

Entities applying to establish payment system operations in an IFSC must demonstrate that they satisfy the applicable financial requirements when submitting their applications.

They must also provide a certificate from their statutory auditor confirming compliance with the relevant financial criteria.

This means applicants will need to assess their financial position and prepare the necessary supporting documentation before approaching the regulator.

Meeting the prescribed financial conditions will form part of the application process for entities seeking to operate payment systems within an IFSC.

Compliance Obligations for Existing Operators

Existing operators must use the six-month transition period to meet the financial requirements applicable to their respective categories.

After achieving compliance, they must obtain annual confirmation from their statutory auditors for the preceding financial year and submit it by September 30 each year.

Trade repositories have an additional monitoring obligation: they must calculate their net worth against one year's operating costs every six months.

These reporting and assessment requirements will require operators to maintain appropriate financial records and monitor their compliance status regularly.

Conclusion

IFSCA's new rules introduce defined net-worth thresholds for selected payment system operators and financial soundness requirements for others. With immediate implementation, a six-month compliance window for existing operators and auditor certification obligations, the framework establishes clearer financial standards for payment system operations in IFSCs.