The Reserve Bank of India (RBI) on June 15, 2026, has issued the Master Directions on Authorisation to Operate a Payment System to establish a comprehensive framework for entities seeking to operate payment systems under the Payment and Settlement Systems Act, 2007.
The following has been stated:
The Directions prescribe eligibility conditions, capital and net-worth requirements, and require applicants, promoters, and promoter groups to satisfy RBI’s “fit and proper” criteria relating to integrity, financial soundness, and regulatory compliance. Applications for authorisation may be submitted on an on-tap basis through RBI’s designated portal.
The Directions also impose restrictions on fresh investments from FATF non-compliant jurisdictions, preventing such investors from acquiring significant influence in a Payment System Operator (PSO). A key reform is the grant of perpetual validity for authorisations issued to new payment system operators and to existing operators that maintain satisfactory compliance and governance standards. RBI may, however, impose restrictions or revoke authorisation if a PSO becomes non-compliant. Further, the Directions provide a structured process for the voluntary surrender of a Certificate of Authorisation and empower RBI to impose a one-year cooling period on entities whose authorisation is revoked, surrendered, or whose application is rejected.
The Master Directions consolidate and replace several earlier RBI circulars and guidelines, namely On-tap Authorisation of Payment Systems (2019), Investment in Entities from FATF Non-compliant Jurisdictions (2021), Authorisation of Entities for Operating a Payment System under the PSS Act – Introduction of Cooling Period (2020), Perpetual Validity for Certificate of Authorisation issued to Payment System Operators (2020), Guidelines and Framework for Voluntary Surrender of Certificate of Authorisation (2016), and Computation of Net-worth (2015). Overall, the Directions create a unified regulatory framework aimed at strengthening governance, transparency, and stability in India’s payment systems ecosystem.
[RBI/DPSS/2026-27/401]
