**Executive Summary**
These Amendment Directions, issued by the Reserve Bank of India (RBI) on December 05, 2025, modify the "Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Directions, 2025." The amendments address the definition and scope of "Agency Business" and "Referral Services" provided by Payments Banks, and come into effect immediately on the date of issue.
**Key Points / Main Content**
* **Amendment Scope:** Modifies the "Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Directions, 2025" (Master Direction).
* **Definition of Agency Business:**
* "Agency Business" is defined as an arrangement where a bank acts as an agent for a third-party product or service provider (TPPSP) without risk participation.
* The bank facilitates the sale of the TPPSP's financial products/services (e.g., insurance, mutual funds) to its customers.
* The bank must enter into an agreement with the TPPSP, offering only regulated financial products/services.
* Activities may include marketing, sales, promotion, initial point of contact for grievance redressal, and after-sale services.
* **Renumbering:**
* The existing sub-para (1) in the Master Direction, defining "Financial Services Company", is renumbered as (1A).
* **Definition of Referral Services:**
* "Referral Services" means an arrangement where a bank refers its customers to a TPPSP by providing information about their financial products/services.
* The bank must not be involved in any processes related to the third-party products/services.
* The bank's name or brand cannot feature in any product/service documents.
* Processes relating to TPPS shall not be integrated with the bank's platform/carried out within the bank's premises (unless specifically permitted) or accessible through a microsite or micro-application, except for a redirect link to the TPPSP.
**Impact Analysis**
**Stakeholder:** Payment Banks
**Impact:**
* Must adhere to the revised definitions and regulations for "Agency Business" and "Referral Services".
**Action Required:**
* Review and update their operational procedures, agreements, and systems to comply with the new guidelines.
* Ensure their offerings align with the new definitions, particularly regarding risk participation and integration with third-party services.
Key Entities Referenced
Reserve Bank of India: The central bank of India, issuing the Amendment Directions.
Reserve Bank of India (Payments Banks – Undertaking of Financial Services) (Amendment) Directions, 2025: The primary subject of the document; amends existing directions related to payments banks undertaking financial services.
Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Directions, 2025: The existing directions being amended.
Banking Regulation Act, 1949, Section 35A: Legal basis for Reserve Bank of India's powers to issue the directions.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
RBI/DOR/2025-26/137
DOR.RAUG.AUT.REC.No.345/24.01.041/2025-26 December 05, 2025
Reserve Bank of India (Payments Banks – Undertaking of Financial Services)
(Amendment) Directions, 2025
Reserve Bank had earlier issued directions on Financial Services provided by Banks
in 2016, since replaced by entity-wise Master Directions issued on November 28, 2025
- Reserve Bank of India (Payments Banks – Undertaking of Financial Services)
Directions, 2025. A review of some provisions contained in the earlier instructions was
carried out and a draft direction was placed on the website on October 04, 2024.
2. Taking into account the feedback received and consultation held with the
stakeholders and in exercise of the powers conferred by Section 35A of the Banking
Regulation Act, 1949, and all other laws enabling the Reserve Bank in this regard, the
Reserve Bank being satisfied that it is necessary and expedient in the public interest
so to do, hereby issues the Amendment Directions hereinafter specified.
3. These Directions shall be called the Reserve Bank of India (Payments Banks –
Undertaking of Financial Services) (Amendment) Directions, 2025.
4. The provisions shall come into effect from December 05, 2025.
5. These Amendment Directions modify the Reserve Bank of India (Payments Banks
- Undertaking of Financial Services) Directions, 2025 (hereinafter referred to as
‘Master Direction’) as under:
(i) In paragraph 4 of the Master Direction, the following sub-paras shall be
inserted/substituted as follows:
a) in sub-para (1), the following shall be substituted, namely: -
“Agency Business: means an arrangement under which a bank acts as an agent
of a third-party product or service provider (TPPSP), without risk participation, to
facilitate the sale of the latter’s financial products or services (e.g., insurance,
mutual fund, pension fund, etc.) to its own customers. Under agency businessarrangement, the bank shall enter into an agreement with a TPPSP for sale of only
regulated financial products or services. The activities covered under agency
business arrangements may inter-alia include marketing, sales, promotion, initial
point of contact for redressal of grievance and other after-sale services related to
the product or service.”
b) the existing sub-para (1) in the Master Direction, which defines Financial
Services Company, has been renumbered as (1A).
c) for sub-para (3), the following shall be substituted, namely: -
“Referral Services: means an arrangement under which a bank may refer its
customers to a TPPSP by making available information about the financial products
or services offered by the TPPSP.
Note: Under referral arrangement, the bank shall neither be involved in any of the
processes relating to the third-party products or services (TPPS) nor the name or
brand of the bank shall feature in any of the product/service documents. No
processes relating to TPPS shall either be integrated with the bank’s
platform/carried out within the premises of the bank (unless specifically permitted)
or be accessible in the form of a micro-site or micro-application, except for an
access link to redirect the customer to the TPPSP.”
(Manoranjan Padhy)
Chief General Manager
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