pc
nid 93264
Jun 16, 2026
pthandapani@vixio.com
India
Reserve Bank of India
financial services
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2200 charsIndia's Reserve Bank Amends Payments Banks Financial Services Directions for Agency and Referral Activities
On June 15, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Amendment Directions, 2026, amending its 2025 Master Direction governing payments banks' agency business and referral services. The amendment consolidates regulatory instructions on customer service and conduct aspects within the Reserve Bank of India (Payments Banks - Responsible Business Conduct) Directions, 2025.
The RBI has clarified and redefined key operational terms for payments banks. "Agency Business" now explicitly means an arrangement where a bank acts as an agent of a third-party product or service provider (TPPSP) without risk participation, covering marketing, sales, promotion, initial contact for grievance redressal, and after-sale services. "Referral Services" is defined as arrangements where banks refer customers to TPPSPs by providing information about financial products or services, without undertaking distribution, grievance redressal, or post-sales services. The amendment introduces definitions for "Regulated Financial Products and Services" (products falling under the regulatory framework of the RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA), or overseas regulators) and "Third-party Product and Service Provider" (TPPSP).
Under the revised framework, payments banks may facilitate regulated financial products and services through agency business on a fee basis without risk participation, with explicit upfront disclosure to customers. For referral arrangements, banks must ensure their role remains purely referral in nature, with proper disclaimers and no bank branding on product documents. Banks must conduct due diligence on TPPSPs to manage reputational risks and verify robust customer grievance redressal arrangements. The amendment directions come into effect on January 1, 2027.
REFERENCES:
Reserve Bank of India. (2026). Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Amendment Directions, 2026. RBI/DoR/2026-27/127. Available at: https://www.rbi.org.in/
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1313 charsReserve Bank of India Amends Payments Banks Financial Services Directions for Agency and Referral Activities
The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Amendment Directions, 2026.
The amended directions contain:
New definitions for key terms including "Agency Business", "Referral Services", "Regulated financial products and services", and third-party products and service providers.
Regulations prescribing the operational boundaries of agency business, requiring payments banks to facilitate third-party sales exclusively on a fee basis, without any risk participation, and with explicit upfront disclosure to customers.
Specific rules for referral services, mandating that banks act purely as referrers without integrating third-party processes into their own platforms or featuring their brand on any third-party product documents.
Provisions outlining strict due diligence requirements, stipulating that banks must ensure third-party product and service providers maintain robust customer grievance redressal arrangements before engaging in agency or referral services.
Administrative amendments consolidating the regulatory instructions on customer service and conduct aspects into the separate Reserve Bank of India (Payments Banks - Responsible Business Conduct) Directions, 2025.
The amendments take effect on January 1, 2027.