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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI - Reserve Bank of India (Authentication Mechanisms for Digital Payment Transactions) Directions, 2025

25-Sep-2025 | RBI/2025-2026/79 CO.DPSS.POLC.No.S 668/02-14-015 /2025-2026

Reserve Bank of India (Authentication Mechanisms for Digital Payment Transactions) Directions, 2025 make two-factor authentication mandatory for all digital payment transactions in India, except where specifically exempted. All the entities are required to comply to these Directions by April 1, 2026. Key Highlights of the Directions: 1. Applicability – These directions apply to all Payment System Providers and Participants (banks and non-banks) handling domestic digital transactions, with exemptions such as small-value contactless payments, recurring transactions, and prepaid instruments listed in Annexure-1 of the Directions. 2. Authentication Principles – Factors may include passwords, OTPs, PINs, biometrics, or tokens, and systems must be designed to ensure that compromising one factor does not weaken the other. 3. Interoperability – Authentication and tokenisation services must remain open and usable across devices, applications, and token requestors, consistent with RBI’s tokenisation guidelines. 4. Risk-Based Approach – Issuers may apply behavioural or contextual checks (such as location, device profile, or transaction history) and require additional verification for high-risk transactions, with DigiLocker available as a confirmation tool. 5. Responsibility of Issuers – Issuers must ensure authentication systems are secure and reliable and fully compensate customers for losses arising from non-compliance. 6. Cross-Border Transactions – By October 1, 2026, card issuers must adopt risk-based mechanisms and validation for cross-border card-not-present (CNP) transactions, with mandatory BIN (Bank Identification Number) registration with card networks. For more information, please refer to the attached document.

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