The Reserve Bank of India (RBI) on November 28, 2025 issued the Reserve Bank of India (Payments Banks – Voluntary Amalgamation) Directions, 2025, providing a regulatory framework for the voluntary merger of Payments Banks with other banks or Non-Banking Financial Companies (NBFCs). The Directions apply to all Payments Banks and define key terms such as amalgamated entity, amalgamating entity, and amalgamation. They outline the scope of amalgamation, covering mergers between two banks or between a bank and an NBFC, and provide for immediate applicability upon issuance.
The Directions require that any amalgamation be approved by a two-thirds majority of the Board of Directors of both entities, with particular attention to due diligence, board composition, swap ratio, asset valuation, capital adequacy, and compliance with RBI and other regulatory norms. In cases involving an NBFC, additional checks include KYC compliance, adherence to existing credit agreements, and regulatory approvals. Shareholder approval is mandated through a resolution passed by two-thirds in value of shareholders present in person or by proxy, with notices published in local newspapers for transparency.
Post approval by boards and shareholders, the scheme of amalgamation must be submitted to RBI for sanction. Dissenting shareholders are entitled to claim the value of their shares as determined by RBI. Additionally, norms for buying and selling shares by promoters must comply with SEBI regulations on insider trading, particularly in listed companies. The Directions aim to ensure orderly, transparent, and compliant mergers, safeguarding financial stability and stakeholder interests.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/206 DoR.HOL.REC.No.125/ 16-13-100/2025-26]
