The RBI (Payments Banks – Statutory Audit) Directions, 2026 establish guidelines for the appointment, eligibility, independence, and functioning of Statutory Central Auditors (SCAs) and Statutory Auditors (SAs) of Payments Banks. The Directions require banks to maintain a Board-approved policy for auditor appointment, determine the number of auditors based on asset size and operational complexity, and ensure compliance with RBI eligibility criteria relating to audit experience, partner qualifications, professional staff, and IT audit capabilities. The Board/ACB is responsible for auditor selection, performance review, audit fees, independence, and conflict-of-interest monitoring. The Directions prescribe a three-year tenure, rotation requirements, limits on audit assignments, and prior RBI approval for appointment/reappointment of auditors. Audit firms must maintain professional standards, avoid conflicts of interest, and comply with regulatory requirements. Payments Banks must ensure timely statutory audits and submission of Long Form Audit Reports (LFAR) covering areas such as risk management, internal controls, fraud risk, KYC/AML compliance, governance, capital adequacy, liquidity,
IT systems, cybersecurity, and regulatory compliance. The Directions repeal previous statutory audit guidelines applicable to Payments Banks while safeguarding existing rights, obligations, and proceedings. Overall, the framework aims to enhance audit quality, financial transparency, governance, risk management, and reliability of financial reporting in Payments Banks.
