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RBI through notification no. RBI/DPSS/2026-27/401 dated 15.06.2026 has notified the Master Directions on Authorisation to operate a Payment System (“PS Directions”).
The salient features of the PS Directions are as follows:
- Applicability – Under the Payment and Settlement Systems Act, 2007 (“PSS Act”), no person can operate a payment system without an authorisation issued by RBI in accordance with the PSS Act. PS directions are applicable only on entities applying for authorisation or authorised to operate a payment system under the PSS Act. Such authorisation is based on an ‘on-tap basis’.
- Eligibility Criteria – Entity seeking authorisation shall make an application through RBI’s portal along with a certificate from its Statutory Auditor evidencing compliance with net-worth requirement. A newly incorporated entity shall submit the certificate, along with a provisional balance sheet of a recent date.
(a) Fit and proper criteria – Entities, promoters, and promoter groups must maintain integrity and sound credentials. Directors of promoter or group companies shall have a record of financial integrity; good reputation and shall not be disqualified due to past conviction for offences involving moral turpitude, economic offences, or declared insolvent; debarred by any financial regulatory authority; or found to be of unsound mind. RBI’s determination on fit and proper status shall be final.
(b) RBI may additionally consider the overall financial strength of the promoters/entity, sound technological basis to support operations, and any other system-specific directions issued by RBI.
- Entities from FATF Non-Compliant Jurisdictions - Investments in Payment System Operators (“PSO”) from Financial Action Task Force (“FATF”) noncompliant jurisdictions shall not be treated at par with that from compliant jurisdictions.
(a) Existing investors from jurisdictions subsequently classified as FATF non-compliant may continue with or bring in additional investments to ensure business continuity.
(b) New investors from or routing through noncompliant FATF jurisdictions are not permitted to acquire “significant influence” in investee PSO. Aggregate fresh investments from such jurisdictions must remain below 20% of the voting power (including potential voting power).
- Certificate of Authorisation (“CoA”) - Newly authorised PSOs will be granted CoA on a perpetual basis. Existing PSOs may be granted perpetual validity upon renewal of CoA, subject to absolute compliance with authorisation terms, absence of major regulatory or supervisory concern, and no adverse reports from any external regulators/statutory bodies. Non-compliant entities will be granted a period of one-year to comply, failing which authorisation may be withdrawn and subsequent noncompliance may lead to revocation under the PSS Act.
- Voluntary Surrender of CoA - PSO shall submit a written request to Department of Payment and Settlement Systems Central office, Mumbai for voluntary surrender of its CoA in the manner prescribed in PS Directions. RBI shall process such requests on merits and advise PSO to inform all its stakeholder through digital communication and issue public notice informing the customers/ merchants/agents/banks, etc., about its intent to close its payment systems operations. After extinguishing third party liabilities (if any), PSO shall submit a ‘No Liability’ certificate, certified by its statutory auditor.
- Cooling Period - RBI may impose a cooling period of one year, where a CoA is either revoked, nonrenewed, or voluntarily surrendered or when an application for authorisation is refused. Entities shall not be allowed to submit any application for operating a payment system during this period. RBI, where it is deemed necessary may waive or curtail the coolingoff period.
The PS Directions came into force on date of notification on the RBI website i.e., 15.06.2026.
* Master Directions on Authorisation to operate a Payment System.
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