On 20-5-2025, the Reserve Bank of India (‘RBI’) notified the ‘Payments Regulatory Board Regulations, 2025’ to establish a structured framework for overseeing India’s payment and settlement system by formally creating a Payments Regulatory Board. It became enforceable on 20-5-2025.
Key Points:
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Under the powers conferred to RBI to make such regulations, defined in S. 38 of Payment and Settlement Systems Act, 2007, and as a designated authority it has depicted its vision to bring strength, transparency and innovation to traditional payment systems.
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The statute aims to regulate payments systems governance by establishing a dedicated regulatory body, managing India’s host of payment operations ranging from manual paper-based clearance to non-cash modes of payments, which were previously managed by the RBI committee.
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By covering all the essential aspects of the regulatory body, such as- commencement, definitions, compositions of board members, and its appointment criteria, this regulation defines the governance system.
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An expert-led Board composition is created which will be including-
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Governor of RBI
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Deputy Governor
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Member ex-officio
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Three members of Central Government
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Experts, from various fields- payments, IT, law, etc.
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Members must meet stringent criteria, such as experience in payments or cybersecurity, no political affiliations, no insolvency history, and no conflicts of interest.
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Department of Payment and Settlement Systems (‘DPSS’) will be created to assist the Board.
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The Board structure will ensure that it adheres to meetings and quorum decided, follow majority-rule when casting vote, delegate powers to appropriate authorities while ensuring confidentiality and upholding public trust and integrity.
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The Board can establish advisory committees and invite experts from the payment and settlement domain.
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By incorporating diverse expertise, this regulation fosters a robust, well-balanced, and efficient governance model.
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Payments Regulatory Board will now be a central authority responsible for regulating India’s digital payment landscape, ensuring a well-structured framework backed by expert governance.
