Master Direction on Regulation of Payment Aggregator (PA)
UR
- Applies toBanks that handle foreign money and commercial banks · read from RBI’s Para 3
- StatusIn force
- IssuedSep 15, 2025
- Amendmentsnone tracked
- Length36 points in 3 sections · 3 min read
The four dates on this rule
- PublishedSep 15, 2025The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applySep 15, 2025The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actDecember 31, 2025The day by which the work this rule asks for must be finished. This document states 2 such dates; the earliest is shown.
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Numbers to remember
| 45 days | A regulated applicant must attach its NOC within 45 days. RBI Para 5 |
| December 31, 2025 | A PA-O hopeful must report its PA-P business by December 31, 2025. RBI Para 5 |
| February 28, 2026 | A late filer must tell its bank and close by February 28, 2026. RBI Para 5 |
| ₹15 crore | A new PA needs at least ₹15 crore net worth to apply. RBI Para 6 |
| ₹25 crore | Net worth must reach ₹25 crore by the third financial year. RBI Para 6 |
| ₹25 lakh | A cross-border transaction may not go above ₹25 lakh. RBI Para 11 |
| ₹40 lakh | A merchant earning under ₹40 lakh a year can use a simpler check. RBI Para 13 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Chapter I. Preliminary
1. Covers all PA businesses
This rulebook covers every bank and non-bank PA business.
2. Other banks covered too
Authorised Dealer banks and Scheduled Commercial Banks are covered too, where stated.
Chapter II. Authorisation and Capital Requirements
Must know
1. Banks need no extra okay
A bank does not need its own approval for PA business.
2. Non-banks apply through portal
A non-bank PA applies for approval on RBI's own online portal.
3. NOC deadline is 45 days
A regulated applicant must attach its NOC within 45 days.
4. PA-O hopefuls report PA-P work
A PA-O hopeful must report its PA-P business by December 31, 2025.
5. Apply by December 2025
A PA-P-only business must apply for authorisation by December 31, 2025.
6. Late filers must shut down
A late filer must tell its bank and close by February 28, 2026.
7. Net worth starts 15 crore
A new PA needs at least ₹15 crore net worth to apply.
8. Grows to 25 crore later
Net worth must reach ₹25 crore by the third financial year.
9. Net worth kept up always
This net worth level must be kept up all the time.
Chapter III. Conduct of PA business
Must know
1. Directors must pass fit test
Every promoter and director must meet RBI's fit-and-proper test.
2. RBI's fit-proper call is final
RBI has the final say on who counts as fit and proper.
3. Ownership changes need RBI's rule
Any change of control at a non-bank PA follows a set RBI rule.
4. Pending applicants covered too
The rule also covers a PA still waiting for approval.
5. PA must resolve disputes
Every PA needs its own way to fix payment disputes.
6. One officer handles complaints
Every PA must name an officer for merchant complaints.
7. Fraud systems are compulsory
Every PA must run systems to catch and stop fraud.
8. Yearly cyber audit required
A cyber security audit is done and reported every year.
9. No marketplace business allowed
A PA business may not also run a marketplace.
10. Charges shown before payment
Any extra charge must be shown to the payer before the transaction.
11. No ATM PIN online pay
ATM PIN may never be used to verify an online card payment.
12. Refunds go back same way
A refund goes back to the same payment method used.
13. Inward, outward funds stay apart
Money for inward and outward transactions must be kept separate.
14. Only dealer banks trade forex
A PA-CB may buy or sell foreign currency only through an Authorised Dealer.
15. 25 lakh cap per transaction
A cross-border transaction may not go above ₹25 lakh.
16. Reports listed in Annexure 2
Every authorised PA must send the reports listed in Annexure 2.
17. KYC follows the standard rule
A PA checks every merchant using the standard KYC rulebook.
18. Small sellers get simpler checks
A merchant earning under ₹40 lakh a year can use a simpler check.
19. Merchant funds only to merchant
Money owed to a merchant goes only into that merchant's own account.
Chapter V. Settlement of Funds and Escrow Accounts
1. Merchant funds stay in escrow
A non-bank PA must keep merchant funds in a separate escrow account.
2. Escrow account, PA business only
The escrow account may be used only for PA business.
3. Core funds stay in escrow
The escrow's core portion stays inside that same escrow account.
4. No cash-on-delivery via escrow
Cash-on-delivery payments may not run through the escrow account.
Chapter VI. Repeal and Savings
1. Old intermediary rules repealed
One more old circular on intermediaries is now repealed.
2. Annexure 3 circulars now gone
All circulars listed in Annexure 3 are now repealed.