**Executive Summary**
This document contains the Reserve Bank of India's (RBI) Amendment Directions, 2025, concerning Payments Banks undertaking Financial Services. These directions, effective December 05, 2025, modify the existing Master Directions on the same subject, originally issued in 2016 and replaced on November 28, 2025. The amendment refines the definitions and requirements related to "Agency Business" and "Referral Services."
**Key Points / Main Content**
* **Effective Date:** The provisions come into effect from December 05, 2025.
* **Amendment Scope:** The amendment modifies the Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Directions, 2025 (Master Direction).
* **Agency Business Definition:**
* Sub-paragraph (1) in paragraph 4 of the Master Direction is substituted to define "Agency Business" as an arrangement where a bank acts as an agent for a third-party product or service provider (TPPSP) without risk participation.
* Under agency business, banks can facilitate the sale of financial products/services (e.g., insurance, mutual funds, pension funds) to their customers under agreement with a TPPSP for sale of only regulated financial products.
* Activities may include marketing, sales, promotion, initial point of contact for grievance redressal, and after-sale services.
* **Financial Services Company Renumbering:**
* The existing sub-para (1) in the Master Direction, which defines Financial Services Company, has been renumbered as (1A).
* **Referral Services Definition:**
* Sub-paragraph (3) in paragraph 4 of the Master Direction is substituted to define "Referral Services" as an arrangement where a bank refers its customers to a TPPSP by making available information about the financial products or services offered by the TPPSP.
* Under referral arrangement, banks must not be involved in any processes related to third-party products/services, and the bank's brand must not appear on product/service documents.
* TPPS processes should not be integrated with the bank's platform, carried out within the bank's premises (unless specifically permitted), or accessible via a micro-site/application, except for a redirect link to the TPPSP.
**Impact Analysis**
**Stakeholder: Payments Banks**
* **Impact:** Must adhere to the revised definitions and requirements regarding "Agency Business" and "Referral Services."
* **Action Required:** Update internal policies, procedures, and agreements with TPPSPs to align with the new directions.
**Stakeholder: Third-Party Product/Service Providers (TPPSPs)**
* **Impact:** Subject to new arrangement requirements when partnering with Payments Banks for agency business or referral services.
* **Action Required:** Ensure compliance with the revised framework when engaging with Payments Banks, particularly regarding risk participation, branding, and customer access to services.
**Stakeholder: Customers of Payments Banks**
* **Impact:** Access to a clear, risk-free, definition of how Payment Banks can engage with them with regard to financial services, as agents of other providers.
* **Action Required:** None explicitly mentioned, but customers will benefit from the structured and secure framework within which Payment Banks can promote and enable access to financial services.
Key Entities Referenced
Reserve Bank of India (Payments Banks – Undertaking of Financial Services) Directions, 2025: The primary directive being amended, concerning the undertaking of financial services by payments banks.
Section 35A of the Banking Regulation Act, 1949: The section of the Banking Regulation Act that grants the Reserve Bank of India the power to issue directions.
Reserve Bank of India: The regulatory body issuing the amendment directions.
Financial Services provided by Banks in 2016: The original directions superseded by the 2025 Directions, indicating the evolution of regulations.
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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