Master Directions on Authorisation to operate a Payment System

RBI/DPSS/2026-27/401
DPSS.CO.AUTH.No.S-239/02-27-004/2026-27
June 15, 2026

Master Directions on Authorisation to operate a Payment System

Table of Contents

1. Short Title and Commencement
2. Definitions
3. Applicability
4. Eligibility Criteria and Requirements
5. Investment in Entities from FATF Non-Compliant Jurisdictions
6. Validity period of Certificate of Authorisation
7. Voluntary Surrender of CoA by PSO’s Authorised under PSS Act
8. Cooling Period
9. Miscellaneous
10. Repeal and Other Provisions

These Directions are issued in exercise of powers conferred in Chapter III on Authorisation of Payment Systems and issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) hereinafter referred as “PSS Act”.

1. Short Title and Commencement

1.1 These Directions shall be called the Master Directions on Authorisation to operate a Payment System.

1.2 These directions shall come into effect on the day they are placed on the website of the Reserve Bank.

2. Definitions

2.1 In these directions, unless the context otherwise.

• (1) ‘Payment System’ has the same meaning as defined in the PSS Act.
• (2) ‘Payment System Operator’ (PSO) has the same meaning as defined for System Participant in clause (p) of Section 2(1) of the PSS Act.
• (3) ‘Company’ means a company registered under Section 3 of the Companies Act, 1956 or the corresponding provision under the Companies Act, 2013.
• (4) ‘Companies in the group’ means an arrangement involving two or more entities related to each other through any of the following relationships: Subsidiary – parent (defined in terms of AS 21), Joint venture (defined in terms of AS 27), Associate (defined in terms of AS 23), Promoter–promotee [as provided in the SEBI (Acquisition of Shares and Takeover) Regulations, 1997] for listed companies, a related party (defined in terms of AS 18), common brand name, and investment in equity shares of 20 percent and above.
• (5) ‘Promoter’ means, the person who together with his relatives [as defined in Section 2(77) of the Companies Act, 2013 and Rules made there under], by virtue of his ownership of voting equity shares, will be/ is in effective control of Payment System Operator, and includes, wherever applicable, all entities which form part of the Promoter Group.

Explanation: The term ‘effective control’ means any arrangement whether in the form of shareholding or agreement or otherwise, which enables exercise of control.

• (6) ‘Promoter Group’ includes:
  • A. the promoter;
  • B. relatives of the promoter [as defined in Section 2 (77) of the Companies Act, 2013 and Rules made there under]; and
  • C. in case promoter is a body corporate:
    • (i) a subsidiary or holding company of such body corporate;
    • (ii) body corporate in which the promoter holds ten per cent or more of the equity share capital or which holds ten per cent or more of the equity share capital of the promoter;
    • (iii) any body corporate in which a group of individuals or companies or combinations thereof which hold twenty percent or more of the equity share capital in that body corporate also holds twenty per cent or more of the equity share capital of the promoter;
    • (iv) Joint venture/Associate (as defined in terms of Ind AS 28) with the promoter;
    • (v) Related party (as defined in terms of Ind AS24) of the promoter; and
  • D. In case the promoter is an individual:
    • (i) any body corporate in which ten per cent or more of the equity share capital is held by the promoter or a relative of the promoter or a firm or Hindu Undivided Family in which the promoter or anyone or more of his immediate relative is a member;
    • (ii) any body corporate in which a body corporate as provided in (D) (i) above holds ten per cent or more, of the equity share capital;
    • (iii) any Hindu Undivided Family or firm in which the aggregate shareholding of the promoter and his immediate relatives is equal to or more than ten per cent of the total; and
  • E. all persons who are declared as promoters in the Articles of Association of the group companies.
  • F. all persons whose shareholding is aggregated for the purpose of disclosing in the prospectus (As per SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2018) under the heading "shareholding of the promoter group";
  • G. Entities sharing a common brand name with entities discussed in (C) (i), (C) (ii), (C) (iii), (C) (iv), (C) (v), where the promoter is a body corporate and (D) (i), (D) (ii), (D) (iii) where the promoter is an individual;

Provided that a financial institution, scheduled commercial bank, foreign institutional investor or mutual fund shall not be deemed to be promoter group merely by virtue of the fact that ten per cent or more of the equity share capital of the promoter is held by such institution unless such investment is strategic in nature.

3. Applicability

3.1 As provided in the PSS Act no person can operate a payment system without an Authorisation issued by RBI in accordance with PSS Act. As such, these Directions apply to:

• (i) An entity applying for authorisation to operate a payment system under the PSS Act.
• (ii) An entity authorised to operate a payment system under the PSS Act.

3.2 Authorisation shall be available on an on-tap basis to an entity who intends to operate a payment system.

4. Eligibility Criteria and Requirements

4.1 An entity seeking authorisation to operate a payment system shall submit an application in the prescribed form through RBI’s portal.

4.2 The capital requirement shall be in accordance with the Guidelines/ Directions issued for the specific payment system. The details of the same are available on RBI website.

4.3 The ‘Net-worth’ will consist of ‘paid up equity capital, preference shares compulsorily convertible to equity, free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of assets but not reserves created by revaluation of assets’, adjusted for ‘accumulated loss balance, book value of intangible assets, Deferred Revenue Expenditure, and Deferred Tax Assets, if any’.

4.4 An entity while submitting the application for authorisation, shall also submit a certificate in the enclosed format (Annexure) from its Statutory Auditor, evidencing compliance with the applicable net-worth requirement. A newly incorporated entity, not having an audited balance sheet shall submit the certificate, along with a provisional balance sheet of a recent date.

4.5 The Entity / Promoters / Promoter Groups, shall conform to the Reserve Bank’s ‘fit and proper’ criteria, including but not limited to:

• (i) The entity shall have a past record of sound credentials and integrity.
• (ii) Director of a Promoter Company / Group Company shall have a record of financial integrity; good reputation and character; honesty; etc.
• (iii) Such person shall not have incurred any of the following disqualifications –
  • a) Convicted by a court for any offence involving moral turpitude or any economic offence or any offence under the laws administered by the RBI.
  • b) Declared insolvent and not discharged.
  • c) An order, restraining, prohibiting or debarring the person from accessing / dealing in any financial system, passed by any regulatory authority, and the period specified in the order has not elapsed.
  • d) Found to be of unsound mind by a court of competent jurisdiction and the finding is in force, and
  • e) Is financially not sound.