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RBI Constitutes Six-Member Payments Regulatory Board
What’s the News?
- The Reserve Bank of India (RBI) has constituted a six-member Payments Regulatory Board (PRB), with RBI Governor serving as its Chairperson.
- The PRB replaces the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), following amendments to the Payment and Settlement Systems Act, 2007, which came into effect on May 9, 2025.
- The Board will be responsible for the regulation and supervision of all payment systems—electronic and non-electronic, domestic and cross-border—strengthening India’s digital payments infrastructure.
Composition & Functions of the PRB
- Members:
- Chairperson: RBI Governor
- Deputy Governor, RBI (in charge of Payment & Settlement Systems)
- Executive Director, RBI (Payment & Settlement Systems)
- Secretary, Department of Financial Services (DFS)
- Secretary, Ministry of Electronics and Information Technology (MeitY)
- Aruna Sundararajan, IAS (Retd), former Telecom Secretary.
- Permanent Invitee: Principal Legal Advisor, RBI
- Key Mandate:
- Oversee licensing, regulation, and supervision of payment system operators (e.g., UPI, wallets, card networks).
- Ensure security, interoperability, and consumer protection in digital transactions.
- Promote innovation and competition while maintaining systemic stability.
Additional Info
- Legal Framework:
- The Payment and Settlement Systems Act, 2007 empowers RBI to regulate payment systems in India.
- The 2025 amendment institutionalized the PRB as a statutory body, enhancing its autonomy and decision-making authority compared to the previous internal committee (BPSS).
- Strategic Context:
- India recorded 131 billion digital transactions in 2024, with UPI accounting for over 80% of real-time payments volume.
- The PRB aligns with the G20 Roadmap for Enhancing Cross-Border Payments and supports India’s ambition to export its payment stack (e.g., UPI123Pay, UPI Lite, Bharat BillPay) globally.
- Regulatory Precedents:
- RBI has previously mandated onshoring of payment data, introduced tokenization norms, and capped merchant discount rates (MDR) to foster inclusive digital finance.
- The PRB will now oversee implementation of upcoming frameworks like Open Network for Digital Commerce (ONDC) integration and Central Bank Digital Currency (CBDC) interoperability.