Reserve Bank of India (Payments Banks - Governance) Directions, 2025
UR
- Applies toPayments banks
- StatusIn force
- ImportanceMUST READ
- IssuedNov 28, 2025
- Last amendedJul 30, 2026 · 2 incorporated
- Length51 points in 5 sections · 5 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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Numbers to remember
| 51 per cent | At least 51 per cent of the board must have real knowledge of listed fields. RBI Para 8 |
| eight years | No non-executive director may serve more than eight years in total. RBI Para 8 |
| two years | The person may come back only after a gap of two years. RBI Para 8 |
| six months | For certain promoter directors the gap is only six months. RBI Para 8 |
| fifteen years | The finance chief must be a qualified Chartered Accountant with fifteen years behind him. RBI Para 34 |
| ₹30 lakh | A non-executive director may be paid up to ₹30 lakh a year, apart from the Chair. RBI Para 35 |
| 60 per cent | At least 60 per cent of variable pay must be held back for later. RBI Para 37(6) |
| ₹25 lakh | If the cash part of the bonus is under ₹25 lakh, nothing need be held back. RBI Para 37(6) |
What it says
Chapter I. Preliminary Short title and commencement Applicability Definitions
1. Starts at once
The rules start the moment RBI issues them.
2. Who must follow this
These rules apply to every payments bank.
3. Smaller banks are excused
A payments bank that is not scheduled need not appoint those three chiefs.
Chapter II. Constitution of Board and Appointment of Directors
Must know
1. What being checked means
Criminal record, money position, court cases for personal debts, and past conduct all count.
2. Thirty five to seventy
A non-executive director must be at least 35 and must leave at 70.
3. A graduate at least
A director should be a graduate. This can be relaxed for farmers and small trades.
4. Half must know banking
At least 51 per cent of the board must have real knowledge of listed fields.
5. No trading interest for half
At least 51 per cent must have no big interest in a trading or industrial firm.
6. No politicians
A sitting member of Parliament or a State house may not be a director.
7. A finance company director
A director of a finance company may join only if he does not own or run it.
8. One family member only
As good practice, only one person from a family should sit on the board.
9. Eight years is the most
No non-executive director may serve more than eight years in total.
BankPulse example. A payments bank appoints an outside director in 2018 and he serves four years. He leaves, and comes back in 2024. Those first four years still count. He may serve four more and no longer, because the eight years are counted together and not one stretch at a time.
10. Then a two year gap
The person may come back only after a gap of two years.
11. Six months for big owners
For certain promoter directors the gap is only six months.
12. Chairman and head are separate
The bank must have a part-time Chairman and a separate managing director.
13. The head leaves at seventy
No managing director or whole-time director may stay past 70.
Do it
14. Check the person first
Before anyone joins the board the bank must check them properly.
15. Nobody checks himself
The board itself checks the members of the appointing committee.
16. Whoever proposed steps aside
A member who proposed a candidate may not take part in checking that candidate.
17. Papers signed every March
Each director signs the deed and a fresh declaration as on March 31 every year.
Chapter IV. Role of the Board and Individual Directors
Must know
1. Solvent, liquid, profitable
The bank must stay able to pay, able to find cash, and reasonably profitable.
2. The board has four jobs
Watch the risk, guard the controls, keep good management, and serve the owners.
3. A director acts alone never
A director is not an employee and may not act alone for the bank.
4. No orders to staff
A director may not send instructions to any officer of the bank.
5. No pushing for staff
A director may not push a case for anyone's job, transfer or promotion.
6. Keep customer matters secret
Nobody may give out anything about a customer except as the law allows.
7. No bank logo on cards
A director may say he is a director but may not put the bank logo on his card.
Do it
8. Speak up about your interest
A director with an interest in a matter must say so and must not vote on it.
Chapter V. Calendar of Reviews and Board Meeting Procedures
1. Seven things on the agenda
The board agenda must cover strategy, risk, accounts, rules, customers, inclusion and staff.
2. Old points stay listed
Any pending point stays on the agenda until the board is satisfied.
3. RBI letters reach the board
Every RBI and Government circular must be placed before the board.
4. Write down who disagreed
The minutes must show what each director said, including any disagreement.
Chapter VI. Committees of the Board
1. Who sits on it
The appointing committee needs three or more non-executive directors, half of them independent.
Chapter VII. Appointment of Chief Risk Officer
1. The risk chief stands alone
The risk chief reports straight to the top and gets no sales targets.
2. No second hat
The risk chief may not also be the audit, finance or operations chief.
3. Meet him without the boss
The risk committee must meet the risk chief without the managing director every quarter.
4. Removing the risk chief
Moving or removing the risk chief early needs the board and must be told to RBI.
5. Listed banks tell the exchange
A listed bank must also tell the stock exchanges when the risk chief changes.
Chapter VIII. Appointment of Chief Financial Officer and Chief Technical Officer
1. Finance chief is an accountant
The finance chief must be a qualified Chartered Accountant with fifteen years behind him.
2. The technology chief
The technology chief must be an engineering graduate or hold an MCA.
Chapter IX. Remuneration of NEDs, WTDs, MD&CEO, Material Risk Takers, and Control Function staff
1. Thirty lakh a year
A non-executive director may be paid up to ₹30 lakh a year, apart from the Chair.
2. Sixty per cent held back
At least 60 per cent of variable pay must be held back for later.
3. Small bonus paid at once
If the cash part of the bonus is under ₹25 lakh, nothing need be held back.
4. Bonus can be taken back
The bank must list the cases where it will stop or take back a bonus.
Chapter X. Regulatory approvals and Reporting
1. Four months before the end
A new managing director must be proposed to RBI four months before the old term ends.
2. Six months to reappoint
To reappoint the same person, the bank must apply six months before.
3. Board changes are reported
Every change in who sits on the board must be reported to RBI as it happens.
Chapter XI. Repeal and other provisions
1. The old rules are gone
All earlier governance instructions for payments banks stand repealed.
2. Old actions still stand
Anything already done under the old rules is still judged by them.
3. Other laws still apply
These rules sit on top of other laws. They do not take the place of them.
4. RBI's reading is final
Where the wording is unclear, RBI's own reading of it is final.
How this rule has changed
The points above are the rule as it stands today, after every change listed here.
Issued on Nov 28, 2025. This is the date RBI put the rule out.
Changed on Jul 14, 2026. Takes effect From October 01, 2026. Exceptions and conditions are stated in the amendment..
- New chapter title. Chapter V is now titled "Matters to be placed before the Board".
- Policies before Board. Banks must follow Appendix I for which policies need Board approval or can be approved by delegated authority.
- Policy review delegation. Board may delegate policy review to committees but must itself approve important changes to such policies.
- Non‑policy matters list. Banks must follow Appendix II A for non-policy items that must go to the Board.
Changed on Jul 30, 2026. Takes effect From April 1, 2027..
- Share linked pay. Banks must count share linked instruments as part of staff variable pay.
- Frame share norms. Each bank must set its own rules for giving share linked instruments as per law and pay policy.
- Fair value on grant. Banks must fair value share linked instruments on grant date using the Black Scholes model.
- Expense recognition. Banks must book the fair value cost from the first approved accounting period.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for payments banks
RBI compliance officer and compliance function rules for payments banks 2026
RBI customer service and fair conduct rules for payments banks 2025
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