Context:
The Reserve Bank of India (RBI) has formally constituted a six‑member Payments Regulatory Board (PRB) to regulate and supervise India’s payment and settlement systems. This new Board replaces the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
About Payments Regulatory Board (PRB):
The PRB is part of a regulatory re‑structure aimed at strengthening oversight of India’s payment infrastructure.
-
- The Board is envisaged to ensure greater accountability, clearer governance, transparency, and responsiveness in the evolving payments ecosystem.
- It replaces the BPSS, which was a committee under the RBI’s Central Board, and which had five members.
- Unlike BPSS, the PRB includes representatives from the central government in its composition.
- The Board is envisaged to ensure greater accountability, clearer governance, transparency, and responsiveness in the evolving payments ecosystem.
Composition & Structure:
The PRB is constituted under the Payments Regulatory Board Regulations, 2025. Its membership and functioning are as follows:
|
Role |
Member / Nominee |
Status / Notes |
|
Chairperson |
RBI Governor |
Ex officio |
|
Member |
Deputy Governor in charge of Payment & Settlement Systems |
Ex officio |
|
Member |
One RBI officer nominated by the Central Board |
Ex officio |
|
Members (3) |
Central Government nominees |
For the first time, the government will have nominee presence on the payments regulator. |
|
Invitees |
Experts in payments, IT, law, etc. |
May be permanent or ad hoc invitees; the RBI’s Principal Legal Adviser is a permanent invitee. |
Voting, Meetings & Powers:
-
- Voting: Each member has one vote. Decisions are by majority vote. In case of a tie, the Chairperson (RBI Governor) holds the casting vote.
- Meetings: The PRB is to meet at least twice a year, under ordinary circumstances.
- Invitees & Expertise: The Board may invite domain experts in payments, IT, or law to its meetings — either as permanent or ad hoc invitees. The Principal Legal Adviser of the RBI is a permanent invitee.
- Jurisdiction & Replacement: The PRB will have jurisdiction over oversight, regulation, and supervision of payment systems in India, effectively stepping into the role held by BPSS.
- Voting: Each member has one vote. Decisions are by majority vote. In case of a tie, the Chairperson (RBI Governor) holds the casting vote.
Significance & Implications:
1. Greater Accountability & Coordination
The inclusion of government nominees ensures closer alignment between regulatory policy (RBI) and government objectives (DFS, MeitY) especially in digital payments, financial inclusion, and tech regulation.
2. Regulatory Clarity in Payments
As the payments ecosystem gets more complex — UPI, prepaid instruments, tokenization, settlement networks, payment aggregators, etc. — a dedicated, empowered board offers clearer oversight.
3. Room for Innovation & Expertise
The ability to invite experts in technology, law, and payments allows the Board to tap specialized knowledge crucial to a rapidly evolving domain.
Conclusion:
The RBI's decision to constitute the PRB demonstrates its commitment to strengthening the regulatory framework for digital payments in India. With its enhanced powers and independent structure, the PRB is well-equipped to oversee the rapidly evolving payments landscape and ensure the stability and security of transactions
