The Reserve Bank of India has issued the Payments Banks – Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025, under its powers granted by Section 35A of the Banking Regulation Act, 1949, to enhance governance and risk management of Payments Banks’ investment portfolios. Effective immediately, these Directions apply to all Payments Banks and outline principles for the proper classification, valuation, and management of their investments. The preliminary chapter clarifies that simply mentioning an activity, transaction, or investment in the Directions does not imply automatic approval; banks must adhere to all existing statutory and regulatory requirements before execution. The Directions aim to strengthen prudential discipline, ensure accurate reporting of investments, and enhance financial stability by mandating robust processes for valuation and portfolio management. By providing clear regulatory guidance, the RBI seeks to safeguard public interest, protect depositors, and mitigate risks arising from improper investment practices within the Payments Bank sector.
RESERVE BANK OF INDIA
RBI/DOR/2025-26/214
DOR.MRG.REC.No.133/00-00-001/2025-26 | Dated: November 28, 2025
Reserve Bank of India (Payments Banks – Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025
In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (‘BR Act’), and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, the RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.
Chapter I: Preliminary
A. Short Title
1. These Directions shall be called the Reserve Bank of India (Payments Banks – Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025.
B. Effective Date
2. These Directions shall come into effect from the date of issue.
C. Applicability
3. These Directions shall be applicable to Payments Banks (hereinafter collectively referred to as ‘banks’ and individually as a ‘bank’).
Note: Mere mention of an activity, transaction or item in these Directions does not imply that it is permitted, and the bank shall refer to the extant statutory and regulatory requirements while determining the permissibility or otherwise of an activity, transaction, or item.
Read Full text of the Notification: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/214MD.pdf
