On May 21, 2025, the Reserve Bank of India (RBI) officially notified the formation of a six-member Payments Regulatory Board (PRB) under the Payments Regulatory Board Regulations, 2025 to regulate and supervise payment systems in India.
- This new board replaces the existing Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
Composition of PRB:
i.Chairperson: RBI Governor (Currently Sanjay Malhotra)
ii.Members:
- Deputy Governor (in charge of Payment and Settlement Systems), (Currently T. Rabi Sankar)
- RBI-nominated officer (from Central Board).
- Three central government nominees. (Introduced for the 1st time)
iii.Permanent Invitees:
- Principal Legal Adviser of RBI, (Currently Unnikrishnan A)
- Domain experts in payment systems, Information Technology (IT), or law (as needed).
iv.The Governor, Deputy Governor, and the nominated RBI official will serve as ex officio members.
v.Meetings: At least twice annually, with provisions for special sessions.
Note: The previous BPSS was a five-member board headed by the RBI Governor, comprising a Deputy Governor and three directors from the Central Board of the RBI, without any government nominees.
Voting Mechanism:
i.Each member of the PRB holds one vote.
ii.Decisions are made by a majority of votes among members present and voting.
iii.In case of a tie, the Chairperson (RBI Governor), or in their absence, the Deputy Governor who is a member of the board, has a second or casting vote to resolve the deadlock.
Background:
i.In 2018, an Inter-Ministerial Committee (IMC), led by the Economic Affairs Secretary, proposed an independent Payments Regulatory Board (PRB) outside RBI’s purview.
ii.However, RBI issued a ‘Dissent Note’, arguing that the PRB must remain under RBI with the Governor as Chair to ensure operational efficiency. It opposed government-majority nominations, citing conflicts with the Finance Bill’s announcements.
iii.After years of deliberation, the PRB Regulations, 2025 was established under RBI with balanced government representation.
RBI Imposes Penalties on UBI & Transactree Technologies for Regulatory Non-Compliance
On May 23, 2025, the Reserve Bank of India (RBI) imposed a penalty on Mumbai (Maharashtra) based Union Bank of India (UBI) and New Delhi (Delhi) based Transactree Technologies Private Limited (operating as Lendbox), a Non-Banking Financial Company (NBFC) for violations of Banking Regulation Act and NBFC-Peer to Peer (P2P) lending norms.
i.A penalty of Rs.63.6 lakh was imposed on UBI for
- Failing to transfer eligible funds to the Depositor Education and Awareness Fund (DEAF) within the stipulated timeframe.
- Collecting collateral for agricultural loans under Rs.1.6 lakh, violating RBI’s directions on ‘Credit Flow to Agriculture – Collateral-free Agricultural Loans’.
ii.Transactree Technologies was fined Rs.40 lakh for non-compliance with NBFC-P2P Lending Platform (RBI) Directions, 2017′.
Depositor Education and Awareness Fund (DEAF):
i.DEA Fund was established in 2014 by RBI to enhance financial literacy and promote awareness among depositors regarding their unclaimed deposits.
ii.The fund serves as a mechanism for banks, including Commercial Banks and Co-operative Banks, to transfer credit balances from deposit accounts that have remained inactive or unclaimed for 10 years or more.
iii.Depositors or their legal heirs (in case of a deceased depositor) are entitled to claim refunds of the unclaimed amounts transferred to the DEAF through their respective banks.
- There is no specific time limit prescribed for claiming such refunds.
About Reserve Bank of India (RBI):
Governor – Sanjay Malhotra
Headquarters – Mumbai (Maharashtra)
Established – April 1, 1935
