On June 15, 2026, the Reserve Bank of India (RBI) issued landmark Master Directions on Authorisation to operate a Payment System — vide Circular No. RBI/DPSS/2026-27/401, DPSS.CO.AUTH.No.S-239/02-27-004/2026-27 — consolidating, into a single authoritative document, payment system authorisation guidance previously spread across six separate circulars / press releases and related updates issued between 2015 and 2023. These Master Directions come into effect immediately, the moment they are placed on the RBI website. They are issued under the statutory powers conferred by Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (PSS Act, Act 51 of 2007), specifically under Chapter III on Authorisation of Payment Systems. Signed by Brij Raj, Chief General Manager, the Master Directions are available on the RBI website under "Master Directions."
This consolidation exercise is part of RBI's ongoing effort — being carried out across multiple departments — to enhance clarity, improve ease of access, and reduce the compliance burden on Regulated Entities. For fintech companies, non-bank payment system operators (PSOs), prepaid instrument issuers, card networks, UPI intermediaries, and anyone seeking a Certificate of Authorisation (CoA) to operate a payment system in India, these Master Directions are now the single, consolidated authorisation framework that must be read alongside other applicable RBI directions governing the relevant payment activity.
Who these Master Directions matter to
These Master Directions are most relevant to entities that seek, hold, renew, surrender, or risk losing a Certificate of Authorisation (CoA) under the Payment and Settlement Systems Act, 2007. In practice, they are a core compliance document for non-bank payment system operators and other applicants proposing to operate an authorised payment system in India.
They do not by themselves replace every entity-specific operational direction applicable to payment aggregators, PPIs, card networks, BBPS participants, or other payment ecosystem players; rather, they provide the common authorisation framework that sits alongside those product- or activity-specific rules.
⚡ Key Facts at a Glance
RBI/DPSS/
2026-27/401
Circular Number
Jun 15, 2026
Issued & Effective
10 Chapters
Complete Framework
6 Circulars
Repealed & Consolidated
PSS Act 2007
Statutory Authority
On-Tap
Authorisation Available
📋 Table of Contents — 10 Chapters
Chapter 1 — Short Title and Commencement
Chapter 2 — Definitions
Chapter 3 — Applicability
Chapter 4 — Eligibility Criteria and Requirements
Chapter 5 — FATF Non-Compliant Jurisdictions
Chapter 6 — Validity Period of CoA
Chapter 7 — Voluntary Surrender of CoA
Chapter 8 — Cooling Period
Chapter 9 — Miscellaneous
Chapter 10 — Repeal and Other Provisions
📜 Background — Why RBI Consolidated These Directions
India's payment systems ecosystem has grown exponentially since the PSS Act was enacted in 2007. Dozens of payment system operators — from card networks to UPI apps to prepaid wallet issuers to cross-border money transfer platforms — operate under Certificates of Authorisation granted by the RBI's Department of Payment and Settlement Systems (DPSS). Over the years, RBI issued several standalone circulars to govern the authorisation process, each addressing a specific gap or policy update. By 2026, six key circulars were in force — issued between 2015 and 2023 — creating a fragmented compliance landscape that required regulated entities to track multiple documents with overlapping and sometimes confusingly dated instructions.
Important Savings Clause: All approvals and acknowledgements granted under the six repealed circulars/guidelines listed above are deemed to have been given under these Master Directions. Existing PSOs do not need to seek fresh approvals — their existing CoAs and consents carry forward automatically.
📌 Chapter 1 — Short Title and Commencement
CHAPTER 1 — SHORT TITLE AND COMMENCEMENT (Paragraphs 1.1 – 1.2)
1.1
These Directions shall be called the "Master Directions on Authorisation to operate a Payment System." This is the official short title of the consolidated framework.
1.2
These Directions shall come into effect on the day they are placed on the website of the Reserve Bank — i.e., June 15, 2026. There is no deferred commencement or phase-in period; the Master Directions are operative from day one.
📖 Chapter 2 — Definitions (Paragraph 2.1)
Chapter 2 provides precise statutory and regulatory definitions for six foundational terms that govern the entire authorisation framework. Understanding these definitions is essential for determining who the Directions apply to, who qualifies as a promoter, and what constitutes a group entity for FATF and other compliance purposes.
CHAPTER 2 — KEY DEFINITIONS (Paragraph 2.1, Clauses 1–6)
2.1(1)
Payment System
Has the same meaning as defined in the PSS Act. Under Section 2(1)(i) of the PSS Act, a payment system means a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them. Covers card networks, mobile payment systems, UPI, prepaid instruments, real-time gross settlement intermediaries, and more.
2.1(2)
Has the same meaning as defined for System Participant in clause (p) of Section 2(1) of the PSS Act — i.e., any person who is a member of a payment system, and includes every person who holds funds for the purpose of a payment system. For practical purposes: any entity operating a payment system in India requires RBI authorisation as a PSO.
2.1(3)
Company
Means a company registered under Section 3 of the Companies Act, 1956 or the corresponding provision under the Companies Act, 2013. This limits PSO applicants to incorporated companies — other entity forms (partnerships, sole proprietorships, LLPs, etc.) are not eligible to apply for payment system authorisation.
2.1(4)
Companies in the Group
Means an arrangement involving two or more entities related through any of the following relationships:
- Subsidiary–parent relationship (as defined under AS 21)
- Joint venture (as defined under AS 27)
- Associate company (as defined under AS 23)
- Promoter–promotee relationship (per SEBI Takeover Regulations, 1997) for listed companies
- Related party (as defined under AS 18)
- Entities sharing a common brand name
- Investment in equity shares of 20% and above
2.1(5)
Promoter
Means the person who, together with relatives (as defined in Section 2(77) of Companies Act, 2013), by virtue of ownership of voting equity shares, will be or is in effective control of the PSO. This includes all entities forming part of the Promoter Group.
Explanation — Effective Control: Any arrangement — whether in the form of shareholding, agreement, or otherwise — that enables the exercise of control.
2.1(6)
Promoter Group — Comprehensive Definition
The Promoter Group is defined extensively, covering five scenarios (A through G):
A — The Promoter Itself
The promoter and their relatives (Section 2(77) Companies Act 2013).
B — Where Promoter is a Body Corporate
Subsidiary/holding companies; entities with ≥10% cross-shareholding; entities with ≥20% mutual shareholding; JVs/associates (Ind AS 28); related parties (Ind AS 24).
C — Where Promoter is an Individual
Entities where promoter/relative/HUF/firm holds ≥10% equity; cascading entity holding ≥10% in above; HUF/firm with ≥10% aggregate promoter family interest.
D — Declared Promoters in AoA
E — SEBI Prospectus Disclosure
All persons whose shareholding is aggregated under "shareholding of the promoter group" heading in SEBI ICDR prospectuses.
F — Common Brand Entities + Carve-out
Entities sharing a common brand with the above. Carve-out: FIs, SCBs, FIIs, and MFs do not become promoter group entities merely by holding ≥10% unless the investment is strategic in nature.
🎯 Chapter 3 — Applicability (Paragraphs 3.1 – 3.2)
CHAPTER 3 — APPLICABILITY
3.1
Who Must Comply — Two Categories
As mandated by the PSS Act, no person can operate a payment system without authorisation from RBI. These Directions apply to two categories:
Category (i) — Applicants
Any entity applying for authorisation to operate a payment system under the PSS Act — fintech startups, banks seeking to offer new payment services, foreign entities seeking to enter India's payment space.
Category (ii) — Existing PSOs
Any entity already authorised to operate a payment system under the PSS Act — including all currently licensed PSOs operating wallets, UPI handles, card networks, settlement systems, etc.
3.2
On-Tap Authorisation — Available at Any Time
Authorisation is available on an on-tap basis — meaning there is no fixed application window, no annual licensing cycle, and no deadline by which an applicant must apply. An entity that intends to operate a payment system may submit its application to RBI at any time through the prescribed portal. This is a significant ease-of-business feature first introduced in 2019 and now codified in the Master Directions.
✅ Chapter 4 — Eligibility Criteria and Requirements (Paragraphs 4.1 – 4.8)
Chapter 4 is the heart of the authorisation framework — it sets out the substantive eligibility gate that every applicant must clear before receiving a Certificate of Authorisation. It covers the application process, capital and net-worth requirements, the fit and proper criteria for promoters and directors, and the grounds on which applications may be returned.
CHAPTER 4 — ELIGIBILITY CRITERIA AND REQUIREMENTS (Paragraphs 4.1 – 4.8)
4.1
Application Portal — PRAVAAH
An entity seeking authorisation must submit its application in the prescribed form through RBI's PRAVAAH portal (pravaah.rbi.org.in). PRAVAAH (Platform for Regulatory Application, VAlidation And AUtHorisation) is RBI's centralised digital portal for all licensing and authorisation applications.
4.2
Capital Requirement — System-Specific
The capital requirement is not a one-size-fits-all figure. It is determined in accordance with the system-specific Guidelines/Directions issued for each particular payment system. Details are available on the RBI website. For example, prepaid payment instruments, card networks, and cross-border money transfer operators each have different minimum capital requirements set in their respective operating guidelines.
4.3
Net-Worth — Precise Formula
Net-worth is defined with precision as:
➕ ADD (Positive Components)
- Paid-up equity capital
- Preference shares compulsorily convertible to equity
- Free reserves
- Balance in share premium account
- Capital reserves from surplus on asset sales (not revaluation surplus)
➖ DEDUCT (Negative Components)
- Accumulated loss balance
- Book value of intangible assets
- Deferred Revenue Expenditure
- Deferred Tax Assets (if any)
4.4
Along with the application, every entity must submit a certificate from its Statutory Auditor (in the format prescribed in the Annexure to the Master Directions) evidencing compliance with the applicable net-worth requirement.
Special rule for newly incorporated entities: An entity that does not yet have an audited balance sheet may submit the auditor certificate along with a provisional balance sheet of a recent date, thereby enabling fresh entrants and startups to apply without waiting for their first annual audit cycle.
4.5
"Fit and Proper" Criteria — Entity, Promoters, and Promoter Groups
The entity, its promoters, and the entire promoter group must conform to RBI's fit and proper criteria. The standards include:
Positive Requirements:
- (i) Entity must have a past record of sound credentials and integrity
- (ii) Directors of Promoter/Group companies must have a record of financial integrity, good reputation and character, and honesty
⛔ Disqualifications — Any of the following bars a person:
- (a) Convicted by a court for any offence involving moral turpitude, economic offence, or offence under laws administered by RBI
- (b) Declared insolvent and not yet discharged
- (c) Subject to a restraining/prohibiting/debarring order by any regulatory authority that is still in force
- (d) Found to be of unsound mind by a court of competent jurisdiction, with finding in force
- (e) Financially not sound
⚠️ RBI's decision on whether a person is fit and proper is final.
4.6
Other Important Criteria
In addition to fit-and-proper, RBI will assess the following holistically:
- Overall financial strength of the promoters and entity
- Sound technological basis to support payment system operations at scale
- Quality of management and corporate governance structures
4.7
Grounds for Returning an Application
An application will be returned (not merely rejected — returned means the applicant must resubmit) in the following situations:
- Not meeting the minimum capital requirement
- Application is incomplete or not in the prescribed form
- Application is not in compliance with extant DPSS regulatory directions
4.8
System-Specific Criteria — Additive
The fit-and-proper criteria in para 4.5 are in addition to any system-specific fit-and-proper or other eligibility criteria that may be stipulated in the directions issued for particular payment systems (e.g., prepaid payment instruments directions, card network directions, etc.). Applicants must comply with both sets of requirements cumulatively.
🌍 Chapter 5 — Investment from FATF Non-Compliant Jurisdictions (Paragraphs 5.1 – 5.3)
Chapter 5 addresses one of the most sensitive aspects of payment system ownership — foreign investment from jurisdictions that the Financial Action Task Force (FATF) has flagged for weak anti-money laundering and counter-terrorist financing (AML/CFT) controls. This chapter was previously a standalone RBI circular (2021) and is now formally integrated into the Master Directions.
🔍 What is FATF and Why Does It Matter for PSOs?
FATF is an inter-governmental body that sets international standards for AML/CFT. It publishes two lists: (i) the High-Risk Jurisdictions subject to a Call for Action (the "blacklist" — currently includes Iran and North Korea) and (ii) Jurisdictions under Increased Monitoring (the "grey list"). A jurisdiction not on either list is FATF-compliant. Because payment systems handle money flows, RBI treats investment in PSOs from non-compliant jurisdictions differently from investment from compliant jurisdictions.
CHAPTER 5 — FATF NON-COMPLIANT JURISDICTION INVESTMENT RULES
5.1
Core Principle — Differential Treatment
Investments in PSOs from FATF non-compliant jurisdictions shall not be treated at par with investments from compliant jurisdictions. The trigger is the FATF classification of the source or intermediate jurisdiction through which the investment flows — not just the direct investing country.
5.2
Existing Investors — Grandfathering
Investors in existing PSOs who held their investments prior to the classification of the source or intermediate jurisdiction as FATF non-compliant may:
- Continue with existing investments (grandfathered)
- Bring in additional investments as per extant regulations to support business continuity in India
This grandfathering provision is critical for PSOs with existing non-compliant jurisdiction investors who had invested before those jurisdictions were listed — they are not forced to unwind legitimate prior investments.
5.3
New Investors — Strict 20% Voting Power Cap
New investors from or through FATF non-compliant jurisdictions — whether in existing PSOs or entities seeking fresh authorisation — are not permitted to acquire, directly or indirectly, "significant influence" in the investee PSO. In practical terms:
The 20% Rule — Dual Test
Fresh investment (directly or indirectly) from FATF non-compliant jurisdictions, in aggregate, must account for less than 20% of both:
(i) Existing voting powers (current equity), AND
(ii) Existing AND potential voting powers (including contingent rights from convertibles, options, and contractual arrangements that may vest in the future)
Explanation — Potential Voting Power: Arises from convertible instruments, contingent voting right instruments, or contractual arrangements that grant investors voting rights (including contingent voting rights) in the future. The test must be run on both existing and fully-diluted basis simultaneously.
♾️ Chapter 6 — Validity Period of Certificate of Authorisation (Paragraphs 6.1 – 6.4)
Chapter 6 codifies the landmark perpetual CoA validity concept — first introduced in December 2020 — which eliminated the burden of periodic licence renewals for compliant PSOs. This is one of the most business-friendly features of the entire authorisation framework.
CHAPTER 6 — VALIDITY PERIOD OF CERTIFICATE OF AUTHORISATION
6.1
New Entities — Perpetual CoA from Day One
Authorisation to operate a payment system granted to a new entity will be on a perpetual basis from the outset. New PSOs do not receive time-limited CoAs — they get perpetual validity immediately, provided they remain compliant.
6.2
Existing PSOs — Path to Perpetual Validity on Renewal
For existing PSOs whose CoA comes up for renewal, perpetual validity will be granted provided all three conditions are met:
- (i) Full compliance with the terms and conditions subject to which authorisation was originally granted
- (ii) No major regulatory or supervisory concerns related to the PSO's operations
- (iii) No adverse reports from other RBI departments, other regulators, or statutory bodies
6.3
Conditional PSOs — One-Year Renewal Mechanism
Existing PSOs that do not satisfy all three conditions at para 6.2 will be given one-year renewals to give them time to achieve compliance. If a PSO fails to comply within a reasonable time, its authorisation may be withdrawn. This creates a structured remediation pathway rather than immediate cancellation for technically non-compliant but still-operating PSOs.
6.4
Post-Grant Non-Compliance — RBI Enforcement Powers
If a PSO that has already received its CoA (even perpetual) becomes non-compliant with any condition of authorisation, RBI may take action as deemed fit under the PSS Act, including:
- Imposition of restrictions on payment system operations
- Revocation of the CoA entirely
📊 CoA Validity — Decision Tree at a Glance
1
New PSO applying today → Perpetual CoA from day one (Para 6.1)
2
Existing PSO at renewal — fully compliant → Perpetual CoA granted at renewal (Para 6.2)
3
Existing PSO at renewal — not fully compliant → 1-year renewal, opportunity to remediate (Para 6.3)
4
Existing PSO — fails to comply in reasonable time → Authorisation may be withdrawn (Para 6.3)
5
Any PSO (perpetual CoA) — becomes non-compliant post-grant → RBI may impose restrictions or revoke CoA (Para 6.4)
🚪 Chapter 7 — Voluntary Surrender of CoA (Paragraphs 7.1 – 7.7)
Chapter 7 is the most detailed chapter in the Master Directions — it provides a comprehensive, step-by-step exit procedure for PSOs that wish to voluntarily wind down their payment system operations. This covers two scenarios: PSOs that have commenced operations (and therefore have outstanding customer liabilities to discharge) and PSOs that have received their CoA but never commenced operations.
CHAPTER 7 — VOLUNTARY SURRENDER OF CoA — COMPLETE PROCESS
7.1
Trigger — Intention to Discontinue
A PSO authorised under the PSS Act that intends to discontinue its payment system operations may apply to RBI for voluntary surrender of its CoA. This route is available regardless of the reason for discontinuation — business strategy, merger, acquisition, financial difficulty, or any other reason.
7.2
Step 1 — Initial Application to DPSS, Central Office
The PSO must submit a written request signed by its authorised signatory to the Department of Payment and Settlement Systems (DPSS), Central Office, RBI, Mumbai, along with four mandatory documents:
- (i) Recent Board Resolution stating the intent and reason for voluntary surrender
- (ii) Statutory Auditor-certified statement detailing escrow account details and outstanding liabilities to customers, merchants, agents, banks, etc.
- (iii) Memorandum of Procedure (MoP) detailing the process and timelines for extinguishing/repaying all liabilities
- (iv) Undertaking from the authorised signatory that the entity will not undertake payment system operations (for which CoA is being surrendered) during the voluntary surrender process
7.3
Step 2 — RBI's Response and Further Process Directions
On receipt of the application, RBI will process it on the merits and direct the entity to initiate three actions:
i
Digital stakeholder communication: Notify all stakeholders through digital channels — SMS on registered mobile numbers, in-app notifications, and email — about the intent to close payment system operations.
ii
Public notice — triple publication: Issue a public notice in English, Hindi, and a vernacular language, in print/visual media on three different occasions, informing customers, merchants, agents, and banks about the closure. The notice must specify: (a) repayment process; (b) mode of receipt of redemption requests; (c) name, address, phone, and email of a Nodal Officer; (d) timelines for processing and repayment.
iii
Monthly progress reports to RBI: Submit monthly progress reports on the status of extinguishment of liabilities to customers, merchants, agents, and banks.
7.4
Step 3 — "No Liability" Certificate
Once all liabilities to customers, merchants, agents, and banks have been fully extinguished, the entity must submit a "No Liability" certificate certified by its Statutory Auditor.
Scope of "liabilities": The Master Directions expressly clarify that liabilities include, but are not limited to, chargebacks and transactions under dispute — ensuring that no residual contested amounts remain unresolved.
7.5
Special Provision — Unextinguished Liabilities
If the entity is unable to fully extinguish all liabilities, a three-step process applies to protect customers while still permitting the CoA to be cancelled:
- (i) Entity must undertake not to recognise the residual escrow balance as income or transfer it to P&L for three years from CoA cancellation, and must honour any valid claims during that period
- (ii) RBI will issue a Press Notification stating that customers/merchants with valid claims may approach the entity for settlement within three years of CoA cancellation
- (iii) Entity must submit a status report of outstanding escrow amounts to RBI after the three-year period ends
7.6
Separate Track — PSOs That Never Commenced Operations
For an entity that received its CoA but never actually commenced payment system operations (no customers, no float), the process is simpler — just a written request to DPSS, CO, RBI, Mumbai with:
- (i) Recent Board Resolution with intent and reason for surrender
- (ii) Statutory Auditor certificate confirming non-commencement of payment system operations
- (iii) Latest audited balance sheet of the entity
- (iv) Any other supporting document
7.7
Final Step — Submission of Original CoA
On receiving RBI's acceptance of the request for voluntary surrender, the entity must submit the original Certificate of Authorisation to DPSS, Central Office, RBI, Mumbai for physical cancellation. This final physical surrender formally closes the CoA.
⏸️ Chapter 8 — Cooling Period (Paragraphs 8.1 – 8.3)
Chapter 8 codifies the cooling period mechanism — a regulatory tool that prevents entities (or their promoters) from immediately re-entering the payment system space after exiting through revocation, non-renewal, or voluntary surrender. This was first introduced in December 2020 and is now a permanent feature of the Master Directions.
CHAPTER 8 — COOLING PERIOD FRAMEWORK
8.1
When a 1-Year Cooling Period May Be Imposed — Four Triggers
RBI may impose a cooling period of one year in any of the following four situations:
Trigger (i)
CoA revoked by RBI, or CoA not renewed for any reason
Trigger (ii)
CoA voluntarily surrendered for any reason
Trigger (iii)
Application refused by RBI
Trigger (iv)
New entities set up by promoters involved in any of the above three situations
Trigger (iv) is particularly important — it captures promoter-level circumvention, preventing a situation where the same promoter group simply incorporates a new company and immediately re-applies after their previous PSO's CoA was revoked, surrendered, or application refused.
8.2
Effect of Cooling Period — Barred from Fresh Applications
During the cooling period, the affected entities shall not be allowed to submit an application for operating any payment system under the PSS Act. This is a blanket prohibition covering all categories of payment systems — not just the specific system for which the CoA was revoked/surrendered.
8.3
RBI's Discretion — Waiver or Curtailment
RBI retains the discretion to waive or curtail the cooling period in cases where it is "deemed necessary and expedient in exceptional cases, on representation." This safety valve ensures that genuine exceptional circumstances (for example, a voluntary surrender triggered by an M&A transaction rather than any failure) can be dealt with flexibly.
ℹ️ Chapter 9 — Miscellaneous (Paragraphs 9.1 – 9.2)
CHAPTER 9 — MISCELLANEOUS PROVISIONS
9.1
Application Guidance — FAQs and Citizen's Charter
Entities applying to operate a payment system under the PSS Act are directed to refer to the FAQs section of DPSS and the Citizen's Charter on the RBI website for application guidance. These resources provide practical, plain-English guidance on the application process, documentation requirements, and expected timelines.
9.2
Takeover / Acquisition of Non-Bank PSOs — Separate Prior Approval Regime
Authorised non-bank PSOs are directed to refer to the RBI Circular on prior approval for takeover/acquisition of control of non-bank PSOs and sale/transfer of payment system activity (as updated from time to time) for any corporate actions involving:
- Takeover or acquisition of control, whether or not resulting in a change of management
- Sale or transfer of payment system activity
This cross-reference ensures that M&A activity involving PSOs is separately regulated under the applicable prior approval framework and is not conflated with the authorisation process under these Master Directions.
🔒 Chapter 10 — Repeal and Other Provisions (Paragraphs 10.1 – 10.3)
CHAPTER 10 — REPEAL AND OTHER PROVISIONS
10.1
Repeal of Prior Circulars — With Full Continuity Savings
The six circulars/directions listed in the table above (under the Background section) stand repealed with the issuance of these Master Directions. However, three important legal continuity protections apply:
- All approvals and acknowledgements given under the repealed directions are deemed given under these Master Directions
- Any action taken or initiated under the repealed instructions will continue to be guided by those instructions (for acts already in progress)
- Any purported action taken — i.e., enforcement steps or proceedings already underway — are not invalidated by the repeal
10.2
Other Laws Not Barred — Additive Compliance
These Master Directions are in addition to, and not in derogation of, the provisions of any other laws, rules, regulations, or directions in force. A PSO must comply with these Master Directions as well as all other applicable laws — FEMA, IT Act, PMLA, SEBI regulations, Competition Act, etc. These Directions do not provide immunity from or supersede any other legal obligation.
10.3
Interpretations — RBI's Interpretation is Final
For the purpose of giving effect to these Directions or removing any difficulties in their application, the RBI may issue clarifications on any matter covered herein. The interpretation of any provision given by the RBI is final and binding. This standard "RBI decides" clause is consistent with all other RBI Master Directions.
📊 Impact Analysis — Who Benefits and How
🚀 New Fintech Applicants
On-tap availability, PRAVAAH portal, and a single consolidated Master Direction mean applicants no longer need to hunt across multiple circulars to understand requirements. The newly incorporated entity exception (provisional balance sheet allowed) reduces barriers for startups.
🏢 Existing PSOs — Perpetual CoA
Compliant PSOs can now obtain perpetual CoA at renewal and never need to go through the renewal process again — eliminating the operational, legal, and management bandwidth previously consumed by periodic licence renewals.
🌍 Foreign Investors in PSOs
The consolidated FATF chapter with its precise 20% dual-test (existing + potential voting power) and explicit grandfathering of pre-classification investments gives foreign investors clear, unambiguous rules for structuring their investments in Indian PSOs.
🚪 Exiting PSOs — Voluntary Surrender
The detailed, multi-step voluntary surrender process — including the unextinguished-liabilities protection and the three-year escrow undertaking — gives PSOs winding down a clear, structured, customer-protective exit pathway rather than an abrupt cancellation.
⚖️ Legal and Compliance Teams
One document replaces six circulars spanning 2015–2023. Compliance matrices, legal opinions, and board presentations can now reference a single authoritative source with clear chapter/paragraph numbers, reducing ambiguity and legal risk.
👥 Consumers & Merchant Partners
The robust voluntary surrender process — with triple-language public notices, a dedicated Nodal Officer, and mandatory escrow liability tracking for three years after CoA cancellation — significantly strengthens consumer and merchant protection in case a PSO exits the market.
✅ Compliance Action Checklist for PSOs and Applicants
-
✅
New Applicants — PRAVAAH Portal: All new applications for payment system authorisation must be submitted through pravaah.rbi.org.in. Prepare the statutory auditor net-worth certificate using the prescribed Annexure format. Review system-specific directions for applicable capital requirement before applying.
-
✅
Existing PSOs — Perpetual CoA Review: Assess your current CoA renewal date and compliance status against the three conditions in Para 6.2. Resolve any pending regulatory/supervisory concerns before renewal to qualify for perpetual validity.
-
✅
Fit & Proper — Director KYC/Due Diligence: Re-run fit-and-proper checks on all directors of promoter companies and group companies against the five disqualification criteria in Para 4.5. Ensure board-level documentation of this exercise.
-
✅
FATF Investor Screening: Map all existing and proposed investors through the source/intermediate jurisdiction FATF classification test. Run the dual 20% test (existing + potential voting power) for any new investments from or through FATF non-compliant jurisdictions.
-
✅
Update Internal Compliance Documents: Replace references to all six repealed circulars (Jan 2015, May 2016, Oct 2019, Dec 2020 ×2, Jun 2021) in internal compliance matrices, board presentations, and legal opinions with the single citation: "RBI Master Directions on Authorisation to operate a Payment System, June 15, 2026."
-
✅
Voluntary Surrender Planning (If Applicable): PSOs contemplating winding down should begin the Memorandum of Procedure (MoP) and escrow liability mapping exercise in advance. Factor in the Board Resolution, auditor certification, multilingual public notice obligations, and monthly RBI reporting requirements into the exit timeline.
-
✅
Cooling Period Risk Awareness: Promoters involved in any PSO whose CoA has been revoked, not renewed, surrendered, or application refused must be aware of the 1-year bar before any new PSO applications can be filed. New entities set up by such promoters are equally barred during the cooling period.
-
✅
M&A Transactions — Separate Prior Approval: Any proposed takeover, acquisition of control, or sale/transfer of payment system activity in a non-bank PSO must follow the separate prior approval circular referenced in Para 9.2. Do not conflate this with the authorisation process under these Master Directions.
Sources: RBI Press Release 2026-2027/463 dated June 15, 2026 | RBI/DPSS/2026-27/401 — Master Directions on Authorisation to operate a Payment System (DPSS.CO.AUTH.No.S-239/02-27-004/2026-27) | Payment and Settlement Systems Act, 2007 (Act 51 of 2007) — Sections 10(2), 18, and Chapter III |
rbi.org.in |
pravaah.rbi.org.in
This article is for informational purposes only and does not constitute legal advice. Verify all details with the official RBI Master Directions before relying on this content for compliance or regulatory purposes.
