Fintech & digital payments rules in India (2026)

The RBI replaced its 2020/2021/2023 PA circulars with a single Master Direction governing bank and non-bank aggregators, creating categories PA-Physical, PA-Online and PA-Cross Border and requiring non-bank PAs to obtain authorisation via the Pravaah portal with ₹15 crore rising to ₹25 crore net worth. It is now the core licensing code for India's payment-aggregation industry.

Under the Payments Regulatory Board Regulations, 2025, a six-member PRB (chaired by the RBI Governor and including three central-government nominees) took over from the Board for Regulation and Supervision of Payment and Settlement Systems. It now grants, regulates and revokes authorisation for payment systems under the PSS Act.

Citing persistent non-compliance and supervisory concerns from an IT systems audit, the RBI used Section 35A of the Banking Regulation Act to stop Paytm Payments Bank from accepting fresh deposits, credits, wallet and FASTag top-ups after 29 February 2024. It was the most significant enforcement action against a fintech-linked bank and reshaped how the sector views KYC and compliance risk.

The RBI directed all entities facilitating cross-border import/export payments (formerly OPGSPs) to be regulated as Payment Aggregators – Cross Border and to seek PSO authorisation under the PSS Act, with FIU-IND registration and net-worth thresholds. This closed a long-standing gap in oversight of inbound/outbound online payments.

The RBI published its five-pillar roadmap (Integrity, Inclusion, Innovation, Institutionalisation, Internationalisation) targeting a tripling of digital transactions and signalling tighter regulation of payment intermediaries, tokenisation and e-mandates. It set the policy direction for most fintech-licensing changes that followed.

NPCI launched UPI under RBI oversight, enabling instant interbank mobile payments via a single ID on top of IMPS. UPI became the backbone of India's digital-payments ecosystem and the rails most fintechs license access to today.

After screening 41 applications via an external advisory committee chaired by Nachiket Mor, the RBI awarded in-principle payments-bank licences to 11 applicants (including telcos and fintech-linked firms). This created a new class of deposit-taking, payments-focused banks central to digital financial inclusion.

Acting on the Nachiket Mor committee's recommendations, the RBI issued final guidelines for a differentiated 'payments bank' licence allowing limited deposit-taking and payments services but no lending. It opened formal banking licences to non-bank and fintech players for the first time.

The PSS Act gave the RBI statutory authority to authorise and oversee all payment systems, making RBI approval mandatory (Section 4) before any entity can operate a payment system in India. It is the legal foundation under which every payments and fintech licence in India is granted.