The Reserve Bank of India (RBI) on November 28, 2025, released the Reserve Bank of India (Payments Banks – Governance) Directions, 2025 for public comments, aimed at strengthening corporate governance, board accountability, and executive oversight in Payments Banks (PBs). Issued under Section 35A of the Banking Regulation Act, 1949, these directions establish uniform standards for the constitution of Boards, appointment of directors and key managerial personnel, and the functioning of various Board committees. The framework seeks to align PB governance with sound banking principles while recognising their differentiated business model.
The prescribes detailed ‘fit and proper’ criteria for directors covering integrity, qualifications, experience, and independence, along with mandatory annual declarations and deeds of covenant. It sets age and tenure limits—mandating a minimum age of 35 years and an upper limit of 70 years for Non-Executive Directors (NEDs), and a maximum continuous tenure of eight years. Every bank must have a Part-time Chairman and a separate Managing Director & CEO (MD&CEO), with no one permitted to hold the MD&CEO position beyond 70 years. The Board is entrusted with overseeing solvency, risk profile, profitability, and ethical governance, while Non-Executive Directors are expected to focus on policy, performance, and compliance, avoiding interference in day-to-day operations.
Further, the mandates establishment of key Board Committees such as the Nomination and Remuneration Committee (NRC) and the Audit Committee of the Board (ACB) to oversee director appointments, remuneration, and internal controls. It also stipulates the appointment of Chief Risk Officer (CRO), Chief Financial Officer (CFO), and Chief Technical Officer (CTO) for scheduled PBs, reinforcing risk and financial governance. The directions introduce remuneration norms for senior management and control function staff, including provisions for malus and clawback to ensure accountability. Overall, the framework aims to enhance transparency, professionalism, and prudential management in the governance structure of Payments Banks.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/209 DOR.HGG.GOV. No.128/29.67.001/2025-26]
