RBI forms new Payments Regulatory Board-PRB

1. Core Announcement

• A new Payments Regulatory Board (PRB) has been set up by the Reserve Bank of India (RBI) with six members.
• It supersedes the former Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
• Legal Authority: The PRB is given its authority through the Payment and Settlement Systems Act of 2007.

2. Structure and Autonomy

• PRB is a unique agency that is backed by the Department of Payment and Settlement Systems (DPSS).
• The PRB now will have the DPSS report straight to them, with a stronger and more independent regulatory framework.

3. Composition of the PRB

The board of six members consists of:

• RBI Governor (Chairperson)
• RBI Deputy Governor, Payment Systems.
• RBI Executive Director of Payment Systems.
• Secretary, Government of India, Department of Financial Services.
• Secretary, Ministry of Electronics and Information Technology
• Aruna Sundararajan, past Telecom Secretary.
• A permanent invitee law advisor of the RBI is appointed to provide legal soundness.

4. Decision-Making and Tenure

• Voting: Majority vote is by majority vote. A tie result is a cast vote by the Chairperson/Deputy Governor.
• Meetings: Meets should be conducted at least twice a year. To form a quorum there must be 3 members which must include the Chairperson (or Deputy Governor) and a nominee of the government.
• Term: Members have a term of 4 years, but not renewable.
• Disqualifications: Age (more than 70), insolvency, criminal conviction (over 180 days), political office (MP/MLA).

5. Key Functions

• Monitoring of all payment systems such as:
  • Electronic: UPI, NEFT, RTGS, IMPS and card networks.
  • Non-electronic systems: Cheque clearing.
• Includes both local and international transactions.
• Secures the payment infrastructure in India, makes it interoperable, and resilient.
• According to the 2007 Act, the RBI will still be the main source of customer protection against unfair practices.