Bill to empower RBI introduced in Lok Sabha
Once this Bill is enacted, the RBI would have the powers to lay down operational and technical standards for various payment systems
New Delhi, July 26
A Bill to empower the Reserve Bank of India to regulate and oversee the various payment and settlement systems including those operated by non-banks such as Clearing Corporation of India Ltd (CCIL), card companies and the proposed National Payments Corporation of India was introduced in the Lok Sabha on Tuesday.
Currently, CCIL operates the inter-bank government securities and foreign exchange clearing systems. A new National Payments Corporation would be taking over the operations of retail payment systems.The various retail payment systems in operation include the manual paper-based clearing, MICR clearing, Electronic Funds Transfer systems (including the electronic clearing services) and card based paper system.
In India, a host of payment systems are in operation ranging from manual paper-based clearing to the real time gross settlement (RTGS) system for facilitating non-cash mode of payments. The RBI operates the RTGS.
The Payment and Settlement Systems Bill 2006 also seeks to give legal recognition to the netting procedure and provides for the finality and irrevocable nature of settlement. Moreover, it also seeks to empower the Securities Appellate Tribunal to settle disputes between the RBI and the payment system providers.
As of now, the procedure of netting (arriving at the multilateral net settlement) is not legally recognised, but has been adopted as a working procedure by the members of the clearing houses.
Once this Bill is enacted, the RBI would have the powers to lay down operational and technical standards for various payment systems. Besides specifying the duties of the system providers, the RBI would also have the powers to audit and inspect the systems and premises of the system providers.