India’s digital payments ecosystem has taken an important regulatory step with the first meeting of a newly constituted oversight body. As digital transactions expand rapidly across the country, strong and independent regulation has become essential. The Reserve Bank of India has now operationalised a dedicated board to guide, supervise, and strengthen payment and settlement systems in line with global standards.
Why in the News?
The Reserve Bank of India held the first meeting of the Payments Regulatory Board (PRB) in Mumbai. The meeting was chaired by RBI Governor Sanjay Malhotra.
What is the Payments Regulatory Board (PRB)?
- The Payments Regulatory Board is a statutory body constituted following an amendment to the Payment and Settlement Systems Act, 2007.
- Which came into effect on May 9, 2025.
- The PRB has been created to provide focused regulation and oversight of payment systems in India.
- Which is ensuring safety, efficiency, and innovation in digital payments while maintaining financial stability.
Key Discussions in the First Meeting
- During its first meeting, the PRB reviewed the functioning of the Department of Payment and Settlement Systems within the RBI.
- The Board examined current focus areas covering both domestic and global payment systems, reflecting India’s growing role in international digital payments.
- Members discussed regulatory priorities to ensure secure, inclusive, and resilient payment infrastructure.
Payments Vision 2028 and Digital Payments Survey
- The RBI presented the draft Payments Vision 2028, outlining a roadmap for the future development of India’s payment ecosystem.
- The Board provided strategic guidance to support innovation, customer protection, and global interoperability.
- Additionally, key findings from the RBI’s Survey on Digital Payments were shared, offering insights into user adoption, challenges, and emerging trends in digital transactions.
Participants and Institutional Representation
- The meeting was attended by senior officials, including the Secretary of the Ministry of Electronics and Information Technology, the Secretary of the Department of Financial Services, and senior RBI officials.
- Their presence highlights coordination between the central bank and the government in shaping India’s digital financial architecture.
Importance of Payment System Regulation
- India has one of the world’s fastest-growing digital payments markets, led by platforms like UPI.
- Robust regulation is crucial to address risks such as cyber threats, systemic failures, and consumer protection issues.
- The creation of the PRB ensures specialised and transparent governance of payment systems, supporting trust and long-term growth.
Payments Regulatory Board (PRB) – Key Points
| Legal Basis | Derives authority from the Payment and Settlement Systems Act, 2007 |
| Background | - Replaces the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS)
- BPSS was a committee of the RBI’s Central Board
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| Composition of PRB | - Ex-officio Chairperson: Governor of the RBI
- Ex-officio Members: One Deputy Governor of RBI & Executive Director in charge of Payment and Settlement Systems
- Government Nominees: 3 members nominated by the Central Government
- Permanent Invitee: Principal Legal Adviser of the RBI
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| Support Structure | - Supported by the Department of Payment and Settlement Systems (DPSS) of RBI
- DPSS reports directly to the PRB
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| Decision-Making Process | Decisions taken by majority of members present and voting In case of a tie, - Chairperson has a casting vote
- In chairperson’s absence, the Deputy Governor exercises casting vote
|
| Meeting Requirement | Must meet at least twice a year |
| Functions of PRB | Regulates and supervises all payment systems, including, - Electronic and non-electronic systems
- Domestic and cross-border payment systems
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Key Summary at a Glance
| Aspect | Details |
| Why in News? | First meeting of Payments Regulatory Board |
| Chairperson | RBI Governor Sanjay Malhotra |
| Regulatory Body | Payments Regulatory Board (PRB) |
| Legal Basis | Amended Payment and Settlement Systems Act, 2007 |
| Amendment Effective | May 9, 2025 |
| Key Agenda | Payment system oversight, Payments Vision 2028 |
| Other Highlight | RBI Digital Payments Survey |
| Location | Mumbai |
Question
Q. The Payments Regulatory Board was constituted under which law?
A. RBI Act, 1934
B. Banking Regulation Act, 1949
C. Payment and Settlement Systems Act, 2007
D. Information Technology Act, 2000