RBI Consolidates Payment System Authorisation Framework into Master Directions:

The Reserve Bank of India (RBI) has issued the Master Directions on Authorisation to Operate a Payment System under the powers conferred by the Payment and Settlement Systems Act, 2007, with immediate effect.

The new Master Directions consolidate various instructions and regulatory frameworks previously issued by the RBI concerning the authorisation, operation and governance of payment systems in India. According to the central bank, the move is part of its ongoing effort to enhance regulatory clarity, improve ease of access to instructions and reduce compliance burden for regulated entities.

The Master Directions bring together the provisions contained in seven earlier circulars and guidelines, namely: computation of net worth (2015), voluntary surrender of authorisation (2016), on-tap authorisation of payment systems (2019), introduction of cooling period for authorisation (2020), perpetual validity of certificates of authorisation for payment system operators (2020), investment restrictions involving FATF non-compliant jurisdictions (2021), and the revised framework for voluntary surrender of authorisation (2023).

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By consolidating these scattered instructions into a single regulatory document, RBI has sought to create a comprehensive reference framework for entities seeking authorisation to operate payment systems and for existing payment system operators.

The Directions came into force on 15 June 2026 and form part of a broader regulatory simplification initiative being undertaken across various RBI departments.

Payment system operators and applicants will now have a single consolidated regulatory framework governing authorisation, net-worth requirements, surrender of authorisation, perpetual validity of licences, cooling-period norms and investment-related restrictions, replacing the need to refer to multiple circulars issued over the years.

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