The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Payments Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025 for public comments. Issued under Sections 12, 12B, and 35A of the Banking Regulation Act, 1949, these directions seek to ensure that major shareholders of Payments Banks (PBs) remain ‘fit and proper’ on a continuous basis. The provides a structured regulatory framework for prior approval, ongoing monitoring, and reporting in relation to the acquisition and holding of shares or voting rights in PBs, thereby strengthening ownership governance and financial stability.
The directions require any person intending to acquire a major shareholding—defined as 5% or more of paid-up capital or voting rights—to obtain prior approval from the RBI through the PRAVAAH portal. The prescribes detailed fit and proper criteria covering integrity, financial soundness, governance standards, and source of funds. For acquisitions of 10% or more, additional due diligence regarding group structure, business plans, and sustainability of funding sources is mandated. Further, entities from Financial Action Task Force (FATF) non-compliant jurisdictions are barred from acquiring major shareholdings, ensuring alignment with international anti-money laundering standards.
To maintain transparency and compliance, PBs must establish continuous monitoring systems to assess the fitness of existing shareholders, detect violations of Section 12B of the Act, and report share transactions, encumbrances, or changes in beneficial ownership to the RBI within stipulated timelines. Regular due diligence reports, Board assessments, and annual declarations are mandated to uphold supervisory oversight. The framework complements existing RBI guidelines on shareholding in banking companies and reinforces the principle of prudent ownership in India’s payments banking ecosystem.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/205 DOR.HOL.REC.124/16.13.100/2025-26]
