RBI Issues Master Directions on Authorisation to Operate a Payment System

The Reserve Bank of India has issued a single set of Master Directions covering the authorisation needed to operate a payment system. These directions take effect immediately. They are issued under the powers given to the RBI by the Payment and Settlement Systems Act, 2007, which is the main law that lets the central bank oversee and regulate payment systems in the country.

The new directions are mainly a consolidation exercise. Over the years, the RBI had released several separate circulars and guidelines on different aspects of payment-system authorisation. The fresh Master Directions bring all of these instructions together into one document, so that the rules sit in a single place instead of being scattered across many notices.

The earlier instructions now combined include rules on how to compute net worth, guidelines for the voluntary surrender of a certificate of authorisation, the on-tap authorisation process for payment systems, the cooling period for entities seeking authorisation, perpetual validity for certificates issued to payment system operators, and limits on investment from jurisdictions that do not comply with global financial-action standards.

The RBI said this step is part of a wider effort across its departments to make rules clearer, easier to find, and less burdensome for regulated entities to follow. By reducing duplication and confusion, the bank aims to lower the compliance load on companies that run payment systems.

Payment systems are the backbone of India's fast-growing digital payments world, covering services that move money between people, businesses, and banks. Clear and consolidated rules on who may operate such a system help keep the digital payments space safe, orderly, and well regulated.