Transforming Payment Systems: India's New Regulatory Landscape

The Payments Regulatory Board, led by the RBI Governor, will oversee India’s payment systems. It replaces the BPSS and includes government nominees. This new structure aims to enhance governance while encouraging innovation in digital payments. The RBI had previously opposed an external regulator, emphasizing the need for continued RBI oversight.

The Reserve Bank of India (RBI) has announced the formation of a new Payments Regulatory Board (PRB) led by its Governor, according to a recent notification. This six-member board will take over from the current Board for Regulation and Supervision of Payment and Settlement System (BPSS).

The PRB introduces a broader representation, including three central government nominees, along with two members from the RBI, aiming to balance innovation and governance according to the regulations notified for 2025. A significant change from its predecessor, the PRB includes representatives from the government, marking a collaborative approach to managing payment systems.

Set up to enhance systemic oversight and foster innovation within the payment landscape, the PRB's meetings will welcome experts in payment systems, IT, and law. The RBI underscores the importance of retaining regulatory oversight to ensure consumer protection and infrastructural resilience, despite some historical dissent regarding the establishment of an independent regulator.

(With inputs from agencies.)