Payments Regulatory Board (PRB)
Kartavya Desk Staff
Source: News on Air
Subject: Economics
Context: The first meeting of the Payments Regulatory Board (PRB) was held in Mumbai under the chairmanship of Sanjay Malhotra, marking the operationalisation of the new payments governance framework.
About Payments Regulatory Board (PRB):
What it is?
• The Payments Regulatory Board (PRB) is the statutory body through which the Reserve Bank of India exercises regulatory and supervisory powers over payment and settlement systems in India, ensuring safety, efficiency, and stability of digital and non-cash payments.
Established in:
• Created under Section 3 of the Payment and Settlement Systems Act, 2007.
• Replaced the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
• Brought into effect from 9 May 2025 following amendments notified by the Government of India.
Member structure:
The PRB is a multi-stakeholder body comprising:
• Chairperson: RBI Governor
• Members: RBI Deputy Governor in charge of payments Nominees of the Central Government Experts with experience in payments, fintech, cybersecurity, and financial markets Senior officials linked to digital identity and payment infrastructure (e.g., UIDAI, NPCI)
• RBI Deputy Governor in charge of payments
• Nominees of the Central Government
• Experts with experience in payments, fintech, cybersecurity, and financial markets
• Senior officials linked to digital identity and payment infrastructure (e.g., UIDAI, NPCI)
Key functions:
• Authorisation & oversight: Grants, regulates, and revokes authorisation for payment systems (UPI, cards, wallets, RTGS, etc.).
• Standards setting: Prescribes technical, operational, and security standards for payment systems.
• Risk management: Addresses systemic risk, settlement finality, and consumer protection.
• Policy direction: Reviews payment system performance and guides long-term strategy.
• Supervision & enforcement: Inspects system providers and issues binding directions under the PSS Act.
Significance:
• Strengthens digital payments governance: Provides a dedicated, statutory framework amid rapid fintech growth.
• Enhances consumer trust: Improves safety, reliability, and grievance redress in payment systems.
• Systemic stability: Ensures legal certainty for netting and settlement finality, reducing financial risk.