What changed
RBI substituted definitions for 'Agency Business' and 'Referral Services' in the 2025 Master Direction, adding new terms like 'Regulated financial products and services' and 'Third-party Product and Service Provider'. Paragraphs 7 and 8 were omitted, and paragraph 12 now restricts agency business to regulated products listed under sub-section (a) to (m) and (o) of Section 6(1) of the Banking Regulation Act, 1949.
What it means for you
Payments banks must now strictly limit third-party product sales to regulated financial products (e.g., insurance, mutual funds, pensions) and cannot offer unregulated ones. Referral services are only for products where the bank does not handle distribution, grievance redressal, or post-sales service. This reduces operational risk and aligns with the new Responsible Business Conduct Directions.
What you must do
- Review and update your agency business agreements to ensure only regulated financial products are offered.
- Remove any unregulated third-party products from websites, apps, and digital channels by Jan 1, 2027.
- Train staff on the new definitions and limits for referral services vs. agency business.
- Ensure compliance with the Reserve Bank of India (Payments Banks - Responsible Business Conduct) Directions, 2025.
Who it affects
Payments banks in India, Third-party product and service providers (TPPSPs), Customers of payments banks
What products can payments banks now sell as agents?
Only regulated financial products and services under RBI, SEBI, IRDAI, PFRDA, or IFSCA, and those permitted under Section 6(1) of the Banking Regulation Act, 1949.
Can payments banks still refer customers to unregulated products?
No. Referral services are only for products where the bank does not handle distribution, grievance redressal, or post-sales services, and must be regulated financial products.
When do these changes take effect?
The amendment directions come into effect on January 1, 2027.