New Payment Regulatory Board Established by RBI to Oversee Payment Systems

Introduction of the Payment Regulatory Board

A new Payment Regulatory Board (PRB), led by the Governor of the Reserve Bank of India (RBI), has been formed to regulate and supervise payment systems across the nation. This board will also include three representatives appointed by the central government.

Transition from BPSS to PRB

According to a notification issued by the RBI, this new entity will replace the existing Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). The BPSS, which was also headed by the RBI Governor, did not include any government-appointed members.

Composition and Functioning of the PRB

The RBI announced the Payment Regulatory Board Regulations, 2025, on May 21. The PRB will be chaired by the RBI Governor, with additional members including the Deputy Governor responsible for payment and settlement systems, an RBI officer nominated by the central board, and three members appointed by the government. Each member will have one vote.

The RBI Governor, Deputy Governor, and the central bank officer will serve as ex-officio members of the board. The PRB may invite individuals with expertise in payment and settlement systems, information technology, and law as permanent or ad-hoc members, while the chief legal advisor of the RBI will be a permanent invitee to the meetings.

Meetings and Government Involvement

The board is expected to convene at least twice a year. To finalize amendments to the Payment and Settlement Systems Act of 2007, the government has established an inter-ministerial committee chaired by the Secretary of Economic Affairs.

In its draft report, the committee recommended the establishment of the Payment Regulatory Board as an independent regulator to address payment-related issues. However, the RBI had previously expressed disagreement with the recommendation for an external regulator for payment systems back in October 2018.