The Reserve Bank of India (Payments Banks – Compliance Function) Directions, 2026 provide a framework for effective compliance risk management in Payments Banks under Section 35A of the Banking Regulation Act, 1949. The Directions aim to strengthen governance, regulatory compliance, and accountability by establishing an independent Compliance function.
The Board of Directors is responsible for oversight of the Compliance function, approval of the Compliance Policy, and periodic review of compliance risks. Senior management must ensure implementation of the policy, timely corrective actions, and reporting of major compliance failures. Payments Banks are required to establish an independent Compliance Department headed by a Chief Compliance Officer (CCO) with adequate authority, resources, and direct access to the Board/ACB. The Compliance function shall monitor regulatory requirements, conduct compliance assessments, support business units, and ensure adherence to RBI guidelines and applicable laws. The Directions also require banks to develop a strong compliance culture through training, accountability mechanisms, technology-based monitoring systems, and effective coordination between Compliance, Risk Management, Legal, and Internal Audit functions. These measures aim to enhance transparency, governance, and regulatory compliance in Payments Banks.
