Reserve Bank of India (RBI) has notified the constitution of a new Payments Regulatory Board (PRB) under the Payments Regulatory Board Regulations, 2025, replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
Key Features of New PRB:
Composition: PRB is a 6-member statutory body
| Member Type | Description |
| Chairperson | RBI Governor |
| Ex officio members | Deputy Governor (in charge of Payment Systems), 1 RBI Central Board nominee |
| Government nominees (new inclusion) | 3 members nominated by the Central Government |
| Permanent Invitee | Principal Legal Adviser of RBI |
| Ad hoc Invitees | Experts in payment systems, IT, and law, as required |
Functioning
- Meeting Frequency: At least twice a year (minimum).
- Decision Process:
- 1 vote per member.
- Matters decided by majority vote.
- Tiebreaker: Chairperson or, in absence, Deputy Governor has a casting vote.
- PRB aims to modernize and streamline payment system regulation in India.
- The board will oversee the regulation, supervision, and development of payment systems, ensuring security, innovation, and financial inclusion in India’s fast-evolving digital economy.
- This move strengthens institutional oversight amid the growing usage of UPI, digital wallets, real-time settlement systems, and fintech platforms.
Key Differences from BPSS:
| Feature | BPSS (Old) | PRB (New) |
| Government Representation | No government nominees | 3 Central Government nominees included |
| Total Members | 5 | 6 |
| Legal Basis | Internal Board under RBI | Notified under PRB Regulations, 2025 |
| Invitees | Limited | Can include domain experts & legal advisers |
Background & Historical Developments:
- 2007: Payment and Settlement Systems Act enacted.
- 2018: Govt panel (headed by Economic Affairs Secretary) recommended an independent payments regulator.
- RBI’s Dissent (2018):
- RBI opposed the idea of an external regulator.
- Argued that payment regulation must remain within RBI for smooth integration with monetary policy and financial stability.
- 2025 Notification: RBI retains regulatory control while incorporating government representation to balance oversight.
Significance
| Impact Area | Explanation |
| Regulatory Modernization | Formalizes governance over rapidly evolving digital payment systems |
| Government Involvement | Increases democratic oversight and coordination in payment regulation |
| Institutional Strengthening | Replaces the older BPSS with a more inclusive and flexible structure |
| Financial Sector Reforms | Aligned with Digital India, fintech growth, and payments innovation |