On 20 May 2025, the Reserve Bank of India (RBI) notified the Payments Regulatory Board Regulations, 2025 (Regulations), under the powers conferred by Sections 3(4) and 38(1)–(2) of the Payment and Settlement Systems Act, 2007 (Act). The Regulations have come into effect on 20 May 2025 and have replaced the Board for Regulation and Supervision of Payment and Settlement Systems Regulations, 2008. This marks a critical step toward enhancing governance, transparency, and efficiency in India’s payments and settlement ecosystem.
Some of the Key Features of the Regulations are:
Governance and Structure:
- The Payments Regulatory Board (Board) is reconstituted under Section 3(2) of the Act.
- The composition of the Board will include officials from the RBI and nominated experts from relevant fields such as payment systems, law, cybersecurity, and information technology.
- Permanent and ad hoc invitees may be included for their expertise, and the Principal Legal Adviser of the RBI will be a permanent invitee.
Eligibility and Tenure:
- Board Members nominated under Section 3(3)(d) must demonstrate integrity, experience, and expertise.
- Ineligibility includes:
- Age above 70 (seventy) years;
- Membership in Parliament or any State Legislature;
- Insolvency, criminal conviction, or physical/mental incapacity; or
- Conflicts of interest with other payment systems.
- Tenure: 4 (Four) years, non-renewable unless the individual is classified as a public servant under Section-2(28) of the Bharatiya Nyaya Sanhita, 2023.
- Members can resign by giving 6 (six) weeks’ notice, subject to acceptance by the Central Government.
Functioning and Meetings:
- The Board is supported administratively by the Department of Payment and Settlement Systems, RBI, which reports directly to the Board.
- Meetings:
- Board will be required to hold meetings, at least twice a year.
- Presided over by the Chairperson or, in absence, the Deputy Governor.
- Quorum: Minimum of 3 (three) members including the Chairperson/Deputy Governor and a nominated member.
- Decisions are by majority vote, with a casting vote held by the Chairperson or Deputy Governor in case of equality of votes who will have a second/ casting vote.
- Confidentiality of proceedings must be strictly maintained.
Ethical Standards:
- A Code of Conduct will be mandated for all members and invitees for upholding dignity and integrity disclosure of conflicts of interest; high standards of public conduct and so on.
- Declaration of Fidelity and Secrecy must be signed upon appointment, as provided in Schedule to the Regulations.
- Members are entitled to be indemnified by the RBI against all losses and expenses incurred in relation to duties performed, except in cases of wilful act or default.
Delegation and Support:
- The Board may delegate its powers to sub-committees, individual members, or RBI officers as deemed appropriate, provided that the existing delegation orders remain valid unless amended.
Committees and Compensation:
- The Board is empowered to constitute committees for advisory or operational support and also invite persons with experience in the field of payment and settlement systems to attend meetings as invitees.
- Members and invitees are eligible for remuneration, travel, lodging, and subsistence allowances as determined by the Board.
This robust regulatory framework reinforces RBI’s commitment to a resilient and inclusive digital financial system by enhancing the independence, accountability, and technical capability of its oversight body in the payments domain.
Full text of the Government’s notification on the Regulations may be accessed at: https://egazette.gov.in/(S(qy0ouoa5pcfhnyarbwtuqj0x))/ViewPDF.aspx