Ozg Payment Gateway Consultant
&
Ozg Registration, Approval & Licensing Group
Ozg Center | London | New Delhi | New York | Mumbai
Phone # 0091-98.11.41.58.31-37-61-72-84-92-94
Website: PaymentGatewayLicense.rbiApproval.com
Email: ask@paymentgatewayconsultant.com
Q1. When did Payment and Settlement Systems Act, 2007 (PSS Act, 2007) came into effect?
Ans. The PSS Act, 2007 received the assent of the President on 20th
December 2007 and it came into force with effect from 12th August
2008.
Q2. What is the objective of the PSS Act, 2007?
Ans. The PSS Act, 2007 provides for the regulation and supervision
of payment systems in India and designates the Reserve Bank of India
(Reserve Bank) as the authority for that purpose and all related
matters. The Reserve Bank is authorized under the Act to constitute a
Committee of its Central Board known as the Board for Regulation and
Supervision of Payment and Settlement Systems (BPSS), to exercise its
powers and perform its functions and discharge its duties under this
statute. The Act also provides the legal basis for “netting” and
“settlement finality”. This is of great importance, as in India, other
than the Real Time Gross Settlement (RTGS) system all other payment
systems function on a net settlement basis.
Q3. What are the Regulations made under the PSS Act, 2007 and when did they come into force?
Ans. Under the PSS Act, 2007, two Regulations have been made by
the Reserve Bank of India, namely, the Board for Regulation and
Supervision of Payment and Settlement Systems Regulation, 2008 and
the Payment and Settlement Systems Regulations, 2008. Both these
Regulations came into force along with the PSS Act, 2007 on 12th
August 2008.
Q4. What are the objectives of these two Regulations?
Ans. The Board for Regulation and Supervision of Payment and
Settlement Systems Regulation, 2008 deals with the constitution of the
Board for Regulation and Supervision of Payment and Settlement System
(BPSS), a Committee of the Central Board of Directors of the Reserve
Bank of India. It also deals with the composition of the BPSS, its
powers and functions, exercising of powers on behalf of BPSS,
meetings of the BPSS and quorum, the constitution of
Sub-Committees/Advisory Committees by BPSS, etc., The BPSS exercises
the powers on behalf of the Reserve Bank, for regulation and
supervision of the payment and settlement systems under the PSS Act,
2007.
The Payment and Settlement Systems Regulations, 2008 covers
matters like form of application for authorization for commencing/
carrying on a payment system and grant of authorization, payment
instructions and determination of standards of payment systems,
furnishing of returns/documents/other information, furnishing of
accounts and balance sheets by system provider etc., .
Q.5 Are entities operating a payment system or intending to operate a payment system required to get a license, approval or authorization for the purpose?
Ans. In terms of Section 4 of the PSS Act, 2007 no person other
than the Reserve Bank can operate or commence a payment system unless
authorized by the Reserve Bank. Any person desirous of commencing or
operating a payment system needs to apply for authorization under the
PSS Act, 2007(Section 5).
Source: RBI
