What changed
RBI issued standalone 'Reserve Bank of India (Payments Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025', replacing earlier guidelines for Payments Banks. The Directions define 'acquisition' broadly to include indirect holdings and aggregate holdings with relatives and associates. They introduce a formal prior approval process with fit-and-proper criteria and ongoing due diligence requirements.
What it means for you
Payments Banks must now comply with a dedicated regulatory framework for shareholding changes, separate from other banks. The expanded definition of 'aggregate holding' captures indirect stakes through related entities, requiring banks to monitor and report such holdings. This tightens oversight on ownership structures to prevent undesirable control or influence.
What you must do
- Review and update internal policies to align with the new Directions' definitions of acquisition and aggregate holding.
- Ensure any proposed acquisition of shares or voting rights in a Payments Bank obtains prior RBI approval as per the fit-and-proper criteria.
- Implement continuous monitoring mechanisms to detect violations of Section 12B(1) of the Banking Regulation Act, 1949.
- Submit required reports and information to RBI as specified in the Directions, including Forms A1 and A2.
- Train compliance and legal teams on the new lock-in requirements and voting rights ceilings.
Who it affects
Payments Banks, Existing and prospective shareholders of Payments Banks, Promoters and promoter groups of Payments Banks, Compliance and legal departments of Payments Banks
What is the effective date of these Directions?
The Directions become effective on the day they are placed on the RBI official website, i.e., November 28, 2025.
Do these Directions apply to all banks?
No, they apply specifically to Payments Banks, as defined in the Directions.
What is considered 'acquisition' under these Directions?
Acquisition includes acquiring or agreeing to acquire shares or voting rights, directly or indirectly. It covers equity and preference shares, and indirect acquisition through entities under common management, control, or ownership.