The Payment and Settlement Systems Act, 2007 is an Indian law that governs the regulation and oversight of payment systems in the country. Key features of the act include:
Regulatory Authority: The Reserve Bank of India (RBI) is designated as the regulatory authority responsible for overseeing payment systems in India.
Authorization Requirement: Payment systems are required to obtain authorization to operate. The RBI holds the power to revoke such authorization if it deems it necessary for reasons related to national monetary policy or other concerns.
Right to Appeal: Entities whose applications for authorization are denied or those whose authorization is revoked have the right to appeal to the Central Government. Appeals must be filed within 30 days, and the Central Government is required to resolve them within a period of three months.
Obligations of System Providers: System providers are required to submit audited financial statements, including balance sheets and profit and loss accounts, along with auditor’s reports to the RBI. These documents must also be published either in two leading newspapers or on the provider’s official website.
Scope of Application: The act covers a wide range of payment systems, including ATMs, credit card services, inter-bank transfers, the National Electronic Funds Transfer (NEFT) system, and the Real Time Gross Settlement (RTGS) system.
How To File A Case Under The Payment and Settlement Systems Act?
To apply for authorization under the Payment and Settlement Systems Act, 2007, follow these steps:
Complete Form A, as outlined in Regulation 3(2) of the Payment and Settlement Systems Regulations, 2008. Provide all necessary information about the applicant and the payment system you’re proposing.
Include documents like proof of incorporation, business plans, and financial details.
Pay a non-refundable fee of ₹10,000 to the Reserve Bank of India through cash, cheque, or electronic transfer.
Send the filled-out form and supporting documents to the Reserve Bank within six months for review.
What Are The Offences And Penalties Under The Payment And Settlement Systems Act?
Unauthorized operation of a payment system is considered an offense.
Failing to follow the terms of authorization can lead to penalties.
Not submitting required statements, documents, or giving false information is an offense
Disclosing information that is prohibited under the Act is also punishable.
Violating any part of the Act or not following RBI directions is considered an offense.
The RBI can start criminal proceedings against offenders and impose fines for breaking the rules.
How Does The Reserve Bank Of India (RBI) Addresses complaints Under The Payment And Settlement Systems Act?
The Reserve Bank of India (RBI) addresses complaints under the Payment and Settlement Systems Act, 2007 (PSS Act) through a defined process:
If a financial institution fails to resolve a customer’s payment system complaint within 30 days, the customer can escalate the issue to the Banking Ombudsman.
The RBI investigates these complaints, ensuring adherence to the PSS Act. It holds the authority to revoke authorizations in cases of non-compliance and can issue directives to payment system providers.
If a party is dissatisfied with a decision related to authorization refusal or revocation, they can appeal to the Central Government within 30 days.
In conclusion, filing a case under the Payment and Settlement Systems Act is an important process for addressing disputes and ensuring compliance within the payment system framework. By understanding the necessary steps such as gathering evidence, submitting a complaint to the appropriate authority, and following the prescribed procedures, individuals and businesses can effectively seek redress for issues related to payment systems.
