The Reserve Bank of India has issued master directions setting out a single framework for authorisation to operate payment systems under the Payment and Settlement Systems Act, 2007. The directions apply to both new applicants and existing authorised payment system operators, confirm that applications are available on an on-tap basis through the RBI portal, and provide that new entities will receive authorisation on a perpetual basis. Existing operators may also move to perpetual validity when renewal falls due, provided they remain fully compliant and do not raise major regulatory, supervisory or adverse reporting concerns. Operators that do not meet those conditions will receive one-year renewals until deficiencies are addressed, failing which authorisation may be withdrawn. The framework sets eligibility requirements around capital, net worth certification by statutory auditors, fit and proper standards for the entity, promoters and promoter groups, and the applicant's financial strength, technology and governance. It also retains differentiated treatment for investment from Financial Action Task Force non-compliant jurisdictions. Existing investors whose holdings pre-date a jurisdiction's non-compliant classification may continue or add investment under existing rules, but new investors from or through such jurisdictions cannot obtain significant influence. Fresh investment from those jurisdictions must remain below 20 per cent of voting power, including potential voting power. The directions also formalise the process for voluntary surrender of authorisation, including notice to stakeholders, repayment or extinguishment of liabilities, monthly progress reporting and, where liabilities remain, a three-year period during which valid customer or merchant claims must still be honoured. RBI may impose a one-year cooling period on entities whose authorisation is revoked, not renewed, voluntarily surrendered or refused, as well as on new entities set up by the same promoters. The directions take effect when placed on the RBI website. They repeal earlier circulars and guidance on on-tap authorisation, investment from FATF non-compliant jurisdictions, cooling periods, perpetual validity, voluntary surrender and net worth computation, while preserving approvals and actions already taken under those earlier instruments.
Reserve Bank of India2026-06-15
Reserve Bank of India issues master directions on payment system authorisation consolidating perpetual approval and FATF investment rules
The Reserve Bank of India has issued master directions that consolidate the authorisation framework for payment systems under the Payment and Settlement Systems Act. New operators will receive perpetual authorisation, while existing operators can obtain perpetual validity at renewal if they remain compliant. The directions also keep the cap on fresh investment from FATF non-compliant jurisdictions below 20 per cent of voting power and formalise surrender and cooling-period rules.