The Reserve Bank of India wants an amendment in the Payment and Settlement Systems (Amendment) Bill to provide for regulation of the clearing and settlement of payment instructions in stock exchanges and commodity exchanges.

In its presentation before the Select Committee of Rajya Sabha looking into the Bill, the Reserve Bank of India suggested four key amendments to the Bill, which was passed in the Lok Sabha during the winter session.

In the Rajya Sabha, the Opposition parties insisted that the Bill should go to a select committee. An Opposition member in the panel told BusinessLine that the RBI’s amendments justified their demand to send the Bill to a select committee.

The RBI also wants the power to appoint additional directors or observers on the board of system provider. The term system provider is explained in the Bill as: “the buyer to every seller and the seller to every buyer.” The RBI also wants rationalisation and enhancement of penalties and further strengthening of the RBI’s powers to impose penalties.

The RBI has also demanded that the non registration of charge with respect to collaterals provided to the service provider should not affect the right of system provider to appropriate securities and settlement finalities.

The Bill is to provide for the regulation and supervision of payment systems in the country and to designate RBI as the authority for the purpose.

Finance Minister Arun Jaitley had said in the Lok Sabha that the Bill will improve the payment and settlement systems by increasing transparency and stability of financial market.

“If we have an obsolete financial system the world will not trust us to the level at which the world should, if we have to relegate ourselves to a country whose financial system must have confidence in itself,” Jaitley had said.

Related Topics
comment COMMENT NOW