The RBI has formed a new six-member Payments Regulatory Board (PRB) to regulate India’s payment systems, replacing the current Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). The PRB, which will have government nominees, will be overseen by the RBI Governor.
The RBI Governor will chair the PRB, which will include 3 government representatives, an RBI Deputy Governor (for payment systems), and an RBI official chosen by the central board. The RBI Governor, Deputy Governor, and the chosen RBI officer are automatic members of the board.
The RBI now mandates the ‘Payments Regulatory Board Regulations, 2025,’ for the PRB to convene biannually. The PRB may engage expert invitees from various fields like payment systems, IT, and law. These experts can serve as permanent or ad-hoc invitees, with the RBI’s Principal Legal Advisor as a permanent attendee. This initiative aims to broaden discussions and decisions by incorporating diverse viewpoints.
In 2018, a government committee led by the Economic Affairs Secretary proposed an independent regulator for amending the Payment and Settlement Systems Act of 2007. The RBI disagreed, stating that the Payments Regulatory Board (PRB) should stay under their control and be overseen by the Governor. The RBI highlighted discrepancies in the PRB’s makeup as per Finance Bill announcements.
According to the RBI’s notification on May 21 in The Gazette of India, each member of the PRB has one vote, with decisions made by majority vote. In case of a tie, the Chairperson or, if absent, the Deputy Governor, a Board Member, will cast a deciding vote. This process guarantees that every board decision receives fair consideration and equal representation from all members.
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