News | RBI Forms New Payments Regulatory Board, Includes Government Members for the First Time

RBI Forms New Payments Regulatory Board, Includes Government Members for the First Time

News

24 May 2025

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The Reserve Bank of India (RBI) has set up a newly constituted Payments Regulatory Board (PRB) to oversee the country’s fast-growing digital payments landscape, formally replacing the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). The new six-member board marks a notable shift in regulatory dynamics by granting the central government a formal role in payment system oversight for the first time.

Chaired by the RBI Governor, the PRB will also include the Deputy Governor in charge of payment systems, one RBI-nominated official, and three members nominated by the central government. All six members hold equal voting rights, with the Chairperson casting the deciding vote in case of a tie.

The RBI said the board will meet at least twice a year, and may invite subject-matter experts in payments, law, and information technology to its meetings. The Principal Legal Adviser to the RBI will attend as a permanent invitee.

The decision aligns with a recent government notification under the Payment and Settlement Systems Act, 2007. It also reflects an evolving governance model where the regulatory apparatus for digital payments becomes more inclusive of policy-level interests.

While the RBI had historically voiced concern over external oversight of payment systems, the current structure maintains its leadership role while opening doors to collaborative governance. Analysts view the new PRB as a move to balance financial innovation, regulatory security, and national policy objectives.

India’s digital payments ecosystem has seen exponential growth in recent years, prompting a need for more agile and responsive regulatory mechanisms. The PRB is expected to play a key role in ensuring that growth is sustained without compromising consumer protection or systemic stability.

Reference: ETBFSI