Current · Source: Reserve Bank of India · RBI/2021-22/73 · issued 28 Jul 2021 · ~2 min read
Quick answerRBI now allows authorised non-bank payment system providers—PPI issuers, card networks, and WLA operators—to directly join RTGS and NEFT as members, reducing their reliance on banks and lowering systemic risk.
The rule, in the simplest words
RBI now lets some non-bank companies (like prepaid card issuers, card networks, and ATM operators) join RTGS and NEFT directly, without needing a bank middleman.
This change lowers risk because payments settle in central bank money (RBI's own money), so there is less chance of a bank failing and causing delays.
Non-banks can save money and time by sending payments directly, instead of relying on banks to do it for them.
The rule started on July 28, 2021, and only applies to certain non-bank payment providers in the first phase.
How it plays out — a real example
A payments & clearing officer in Mumbai, Priya, works for a non-bank that issues prepaid cards. Before this rule, she had to ask a partner bank to process every customer's NEFT transfer, which sometimes took hours. Now, her company joins NEFT directly, so Priya can send loan disbursements to customers in seconds, with no bank delays or extra fees.
What changed
RBI has opened direct membership in RTGS and NEFT to authorised non-bank PSPs, including PPI issuers, card networks, and white label ATM operators, in the first phase. This follows the April 2021 policy announcement and modifies the 2017 Master Directions on Access Criteria for Payment Systems. The circular takes effect from July 28, 2021.
What it means for you
Non-banks can now settle payments directly in central bank money, cutting out intermediary banks and reducing settlement risk. For lenders, this may reduce fee income from providing payment services to non-banks, but it also lowers the operational burden and counterparty risk. The move aligns with global trends toward access neutrality and could accelerate digital payment adoption.
What you must do
Review your current payment service agreements with non-bank PSPs to assess potential revenue impact.
Update risk management frameworks to account for non-banks as direct CPS participants.
Monitor RBI's FAQs and any further phased expansions for new eligible entities.
Engage with your treasury and operations teams to understand implications for settlement flows.
Who it affects
Authorised non-bank payment system providers (PPI issuers, card networks, WLA operators), Banks currently providing payment and settlement services to non-banks, RBI's RTGS and NEFT system operators
❓ Common questions
Which non-banks are eligible for direct CPS access in the first phase?
PPI issuers, card networks, and white label ATM operators that are authorised as payment system providers.
What are the key benefits for non-banks getting direct access?
Lower payment costs, reduced dependence on banks, faster settlement, and elimination of uncertainty in finality since settlement is in central bank money.
Does this circular affect banks' existing roles in payment systems?
Banks remain key participants, but they may lose some fee income from providing settlement services to non-banks. However, systemic risk is reduced as non-banks no longer rely solely on banks for payment finality.
📜 Read the original circular — full text as issued by RBI
RBI/2021-22/73
DPSS.CO.LVPD No.S290/04.04.009/2021-22
July 28, 2021
The Chairman / Managing Director / Chief Executive Officer
Authorised Non-bank Payment System Providers
Madam / Dear Sir,
Access for Non-banks to Centralised Payment Systems
A reference is invited to Paragraph 9 of the Statement on Developmental and Regulatory Policies dated April 07, 2021 wherein it was announced that the Reserve Bank shall encourage participation of non-banks in Reserve Bank of India-operated Centralised Payment Systems (CPS) viz. Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems, in a phased manner. A reference is also invited to the Master Directions on Access Criteria for Payment Systems dated January 17, 2017 wherein Reserve Bank had prescribed criteria for access to CPS.
2. Direct access for non-banks to CPS lowers the overall risk in the payments ecosystem. It also brings advantages to non-banks like reduction in cost of payments, minimising dependence on banks, reducing the time taken for completing payments, eliminating the uncertainty in finality of the payments as the settlement is carried out in central bank money, etc. The risk of failure or delay in execution of fund transfers can also be avoided when the transactions are directly initiated and processed by the non-bank entities.
3. On a review of extant arrangements and after detailed discussions with Payment System Providers (PSPs), it is advised that, in the first phase, authorised non-bank PSPs, viz. PPI Issuers, Card Networks and White Label ATM Operators shall be eligible to participate in CPS as direct members as per the approach presented in the Annexure hereto.
4. The Master Directions on Access Criteria for Payment Systems dated January 17, 2017 are also being modified accordingly. For operational and user convenience, Reserve Bank has placed a set of FAQs on the subject on its website.
5. These instructions are issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and come into effect from the date of this circular.
Yours faithfully,
(P Vasudevan)
Chief General Manager
Annexure to Circular Ref.DPSS.CO.LVPD No.S290/04.04.009/2021-22 dated July 28, 2021
Access for Non-banks to Centralised Payment Systems
Contents
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/73 · issued 28 Jul 2021. The plain-English explanation above is BankPulse’s own independent summary.
Engage with your treasury and operations teams to understand implications for settlement flows.
📜 Compliance
Review your current payment service agreements with non-bank PSPs to assess potential revenue impact.
Update risk management frameworks to account for non-banks as direct CPS participants.
Monitor RBI's FAQs and any further phased expansions for new eligible entities.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Authorised non-bank payment system providers (PPI issuers, card networks, WLA operators), Banks currently providing payment and settlement services to non-banks, RBI's RTGS and NEFT system operators), your first concrete step on “Non-banks get direct access to RTGS and NEFT” is: “Review your current payment service agreements with non-bank PSPs to assess potential revenue impact.” (RBI issued this 28 Jul 2021).
Circular: RBI/2021-22/73 -- Non-banks get direct access to RTGS and NEFT
Issued: 28 Jul 2021
Action required: Review your current payment service agreements with non-bank PSPs to assess potential revenue impact.
Action required: Update risk management frameworks to account for non-banks as direct CPS participants.
Action required: Monitor RBI's FAQs and any further phased expansions for new eligible entities.
Action required: Engage with your treasury and operations teams to understand implications for settlement flows.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12133&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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