101. 2025 Wrap — RBI Realm

I. Big Guidelines

A. Master Direction on Regulation of Payment Aggregator

On 15th September, RBI issued the Master Direction on Regulation of Payment Aggregator (PA) that will replace all earlier guidelines and govern all types of PAs: PA-Online, PA-Physical and PA-Crossborder {Inward and outward) transactions.

• Provided clarity to approval/authorization process; made it simple
• Brought in uniformity in merchant KYC and Due Diligence process
• Defined escrow account management for various types of PAs
• Charted out Base line technology recommendation

B. Direction for Authentication mechanism

In September, RBI issued Directions for Authentication Mechanisms for Digital Payment Transactions that can enable biometric based authentication.

The directions will come into effect on 1-Apr-2026, and are applicable to all domestic digital payments with few exceptions (recurring payments, NFC, NETC, UPI Lite etc.)

C. MD on Cyber Resilience and DPSC came into effect

On 1-April-2025, Master Directions on Cyber Resilience and Digital Payment Security Controls for non-bank Payment System Operators (PSOs).

This is one of the most important directions issued by the RBI that covers — Governance control, Digital Payment Security measures and baseline information security measures.

D. Draft Guidelines to simplify cross-border inward remittance

In Nov-2025, RBI issued **draft guidelines** to address the delays and bring more transparency to cross-border inward remittance.

The draft guidelines cover the timely update to customers about remittance, frequent reconciliation of Nostro Account, and providing digital interface to users to check the status of remittance.

E. Draft Guidelines to bring transparency in Foreign Exchange Rates

In Dec-2025, RBI issued **draft guidelines** to bring transparency to foreign exchange rates wherein the banks are expected to disclose the various costs transparently to users.

II. RBI — Frameworks

A. Payments Regulatory Board

In May-2025, RBI notified the formation of the Payments Regulatory Board (PRB) to replace the existing Board for Regulations and Supervision of Payment and Settlement Systems (BPSS) to oversee all payments and settlement systems.

In Oct-2025, RBI constituted the six member Payments Regulatory Board (PRB) that is chaired by the RBI Governor.

B. Framework for issuing regulations

In May-2025, RBI has formulated a framework for issuing new regulations/directions/guidelines, notifications and also, significant changes to draft regulations and amendments.

The framework is based on public consultation, impact analysis and periodic review of regulation.

C. FREE-AI

In Aug-2025, RBI published the Framework for Responsible and Ethical Enablement of Artificial Intelligence committee report. In short, FREE-AI

The framework is based on seven sutras (Trust in the foundation, People trust, Innovation over restraint, Fairness & equity, Accountability, Understandable by design, and Safety-Resilience-Sustainability), innovation enablers (Infrastructure, Policy, Capacity) and risk mitigators (Governance, Protection, Assurance)

D. RBI New framework for penalty

In Feb-2025, RBI announced a new framework for imposing monetary penalty and compounding of offences under the Payment and Settlement Systems Act, 2007.

The framework covers the scenarios / cases in which penalties are imposed and the quantum of penalty.

E. Measures to boost India’s banking system

In Oct-2025, RBI proposed four ground breaking measures to enhance resilience and competitiveness of India’s banking systems

• Risk based deposit insurance premium
• Expected Credit Loss (ECL) provisioning framework
• Implement revised Basel III capital adequacy norms
• Public consultation on forms of business and prudential regulation for investments

III. Fraud Prevention

A. New domains for banks

In Feb-2025, RBI introduced new internet domains, bank.in (for banks) and fin.in (for other financial institutes), to safeguard users against financial frauds. Makes sense!

As per RBI’s deadline of October-2025, banks have migrated to “.bank.in” domain.

B. Story: Curious Case of MCCs

In May-2025, RBI has started a closer check on misclassification of Merchant Category Codes (MCCs), especially the trends of classifying retail merchants under utility category. RBI intends to stop interchange arbitrage and onboarding of high risk merchants.

RBI’s move is important — it is high time to clean up this mess!

C. DOT’s FRI

As on 22-Dec-2025, 1000+ banks, TPAPs and Payment Service Providers are on-boarded on DOT’s Digital Intelligence Platform (DIP). With the Help of FRI (Financial fraud Risk Indicator) helped stop frauds worth Rs.660 Crore.

The Department of Telecommunication (DoT) has introduced the Financial Fraud Risk Indicator (FRI). Based on various inputs, DoT’s Digital Intelligence Platform (DIP) will classify the mobile number into the risk category — Medium, High, Very High. And regulated entities can use FRI to take appropriate action such as blocking the transaction or showing alerts about potential fraud merchants.

RBI has advised banks, financial institutions and other regulated entities to integrate with DOT’s FRI.

D. API Based Payout under scanner

In November, RBI has turned its focus on the API based payouts, one of complex and at times shady part of the payments ecosystem

Payout rails do solve some genuine payment related requirements but at the same time they can be used for moving funds without much oversight. So RBI has started looking closely into this and may bring some level of control/regulation around payouts.

E. API Based Payout under scanner

RBI Innovation Hub (A subsidiary of RBI) is leading the fraud fighting with its Mule Hunter and DPIP (Digital Payments Intelligence Platform).

In December-2025, RBI approved SBI and Bank of Baroda to set-up a new non-profit entity, Indian Digital Payment Intelligence Corporation (IDPIC) to work on fraud detection and prevention across public sector banks.

IV. Internationalization

A. India <> Maldives trade settlement in INR/MVR

In March-2025, RBI signed an MOU (Memorandum of Understanding) with Bank of Mauritius to promote local currencies (INR and Mauritian Rupee) for bilateral transactions.

B. Further push for promoting SRVA

RBI had introduced ‘Special Rupee Vostro Account (SRVA)’ to settle cross-border trade in Indian Rupees.

In August-2025, RBI made two significant enhancement to SRVA

• Banks can open SRVA without the approval of RBI
• The surplus amount in SRVA can be invested in Central Government Securities

In October-2025, RBI allowed surplus amount in SRVA to invest in non-convertible debentures/bonds and commercial papers issued by an Indian company

C. BRICS Payments Network

In its July-2025 summit in Brazil, BRICS countries pushed for a multilateral cross-border payment solution among BRICS countries. De-dollarization is at the heart of inter-country trade settlements to be done in local currency and not in US Dollar.

BRICS nations: Brazil, Russia, India and China and South Africa + Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, UAE and 9 partner countries (Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan).

IV. Fines and Penalties

In 2025, RBI levied a total of Rs.35.8048 Crore fines/penalties on 295 entities.

V. Other Updates

A. Digital Payments Index

DPI is the way to capture the extent of digitization of payments across the country. The DPI as on Mar-2025 is 493.22

B. RBI’s verified WhatsApp channel

In April-2025, RBI launched a verified WhatsApp channel to increase consumer awareness. Along with social media, mass media channels, WhatsApp will enable RBI to reach a wider consumer base and deliver messages faster. A user can scan the QR (refer to this link) and join the channel.

C. PRAVAAH Portal for all Authorization/Approvals

RBI instructed all regulated entities (banks, PSOs) to submit applications related to authorization, approval, license on **PRAVAAH* (Platform for Regulatory Application, Validation and Authorization)* portal starting 1-May-2025.

D. RBI Recognized SRPA as SROs

In November 2025, RBI recognized SRPA (Self Regulated PSO Association) as SRO (Self Regulated Organization) of PSO (Payments System Operators).

SRPA comprises major PSOs such as Billdesk, CC Avenue, RazorPay, PhonePe, MasterCard etc.

Other RBI recognized SROs are:

• FIDC (Finance Industry Development Council) is SRO for NBFCs
• FACE (FinTech Association for Consumer Empowerment) is SRO for all types of FinTechs.

In March 2025, RBI called for applicants to form SRO for Account Aggregator (AA) ecosystem.

VI. RBI’s Payments Platforms

A. Participation of 3rd Party Apps in CBDC

After RBI allowed the participation of non-bank FinTechs in 2024, in Jan-2025, CRED and Mobikwik added support for eRupee (CBDC). More FinTechs will be part of this emerging ecosystem in 2026.

B. ‘Beneficiary Name’ look facility for RTGS and NEFT

From 1-Apr-2025, Beneficiary name view feature is rolled out for RTGS and NEFT. The feature helps the remitter to double check that he/she is sending money to the right person.

C. Increase in ATM Fees

Effective 1-May-2025, RBI increased fees for cash withdrawal (Rs.17 → Rs.19) and fees for balance enquiry (Rs.6 → Rs.7). One of the moves to reduce cash usage and boost digital payments.

D. Faster clearing of Cheques

In August 2025, RBI introduced Continuous Clearing and Settlement on Realisation in Cheque Truncation System (CTS) with the intent of reducing clearance of cheques from present T+1/T+2 days to a few hours.

The implementation would be done in two phases

• Phase 1 (4-Oct-2025 till 2-Jan-2026): Drawee cheques will be cleared by 7PM on the same day; if the drawee bank doesn’t confirm by the cut-off time then such cheques are deemed approved
• Phase 2 (from 3-Jan-2026): Drawee banks to clear the Cheques in T+2 hours (i.e. cheque that is received by drawee bank between 11AM-12PM to be cleared (approve/rejected) by 2PM.