The Payment and Settlement Systems Act, 2007

The Payment and Settlement Systems Act, 2007: A Comprehensive Overview

The Payment and Settlement Systems Act, 2007 is a legislation aimed at regulating and supervising payment systems in India. The Act designates the Reserve Bank of India as the authority for regulation and supervision of payment systems.

Key Provisions:

1. 
   

   Definitions: The Act defines various terms related to payment systems, including "bank," "derivative," "electronic funds transfer," "gross settlement system," and others.

   
   


2. 
   

   Designated Authority: The Reserve Bank is designated as the authority for regulation and supervision of payment systems under this Act.

   
   


3. 
   

   Authorisation of Payment Systems: No person can commence or operate a payment system except under an authorisation issued by the Reserve Bank.

   
   


4. 
   

   Regulations and Supervision: The Reserve Bank has the power to prescribe standards, guidelines, and regulations for payment systems, including rules and regulations governing their operation.

   
   


5. 
   

   Confidentiality: System providers are required to maintain confidentiality regarding certain documents and information related to payment systems.

   
   


6. 
   

   Powers of Reserve Bank: The Reserve Bank has the power to issue directions, carry out audits and inspections, and revoke authorisations issued to system providers.

   
   


7. 
   

   Appeal Mechanism: System providers can appeal against refusal of an authorisation or revocation of an authorisation by the Central Government.

   
   


8. 
   

   Miscellaneous Provisions: The Act provides for various miscellaneous provisions, including overriding effect, mode of recovery of penalties, and protection of action taken in good faith.