Ans. The aggrieved applicant or aggrieved system provider can appeal to the Central Government within 30 days from the date on which the order of refusal or revocation is conveyed to him (Section 9 of PSS Act, 2007).

Ans. Yes, Section 7 of the PSS Act, 2007 empowers the Reserve Bank to collect authorization fees while granting authorization. It can also call upon the applicant to furnish a security deposit for the proper conduct of the payment system. The quantum of authorization fees and security deposit can be decided by the Reserve Bank.

Ans. The Reserve Bank is empowered to prescribe the format of payment instructions, size and shape of instructions, timings to be maintained by payment systems, manner of funds transfer criteria for membership including continuation, termination and rejection of membership, terms and conditions for participation in the payment system etc (Section 10 of PSS Act, 2007).

Ans. The Reserve Bank is empowered to call for from the system provider returns, documents and other information relating to the operation of the payment system. The system provider and all system participants are required to provide Reserve Bank access to any information relating to the operation of the payment system (Section 12 and 13 of PSS Act, 2007).

Ans. Yes, under Section 15 (2) of the PSS Act, the Reserve Bank may disclose any document or information obtained by it to any person to whom the disclosure of such document or information is considered necessary for protecting the integrity, effectiveness or security of the payment system, or in the interest of banking or monetary policy or the operation of the payment systems generally or in the public interest.

Ans. The Reserve Bank, in order to ensure compliance of the provisions of the PSS Act, 2007 and the Regulations made thereunder, can depute an officer authorized by it to enter any premises where a payment system is being operated, inspect any equipment, including any computer system or document, and call upon any employee of the system provider or participant to provide any document or information as required by it (Section 14 of PSS Act, 2007).

Ans. Yes, Reserve Bank has the authority to conduct on-site inspection, under the PSS Act.

However, foreign entities located in overseas jurisdictions may be exempted from certain requirements applicable to domestic payment systems (India) subject to the RBI concluding cooperative agreements with the home regulator/s.

Ans. The Reserve Bank is authorized to issue directions to a payment system or system participant to cease or desist from engaging in any act, omission or course of conduct or direct it to perform any acts as well as issue general directions in the interests of the smooth operation of the payment system (Section 17 and 18 of the PSS Act, 2007).

Ans. The PSS Act 2007 defines “netting” and legally recognizes settlement finality. It states that a settlement, whether gross or net, will be final and irrevocable as soon as the money, securities, foreign exchange or derivatives or other transactions payable as a result of such settlement is determined, whether or not such money, securities or foreign exchange or other transactions is actually paid. In case a system participant is declared insolvent, or is dissolved or is wound up, no other law can affect any settlement which has become final and irrevocable and the right of the system provider to appropriate the collaterals contributed by the system participants towards settlement or other obligations.

This Act also legally recognizes the loss allocation among system participants and payment system, where the rules provide for this mechanism

Ans. The PSS Act, 2007 lays down the duties of the system provider. The system provider is required to operate the payment system in accordance with the provisions of the Act and the Regulations, the terms and conditions of authorization and the directions given by the Reserve Bank from time to time. The system provider is also required to act in accordance with the contract governing the relationship among the system participants and the rules and regulations which deal with the operation of the payment system. The Act requires the system provider to disclose the terms and conditions including the charges, limitations of liability etc., under the payment system to the system participants. The Act also requires the system provider to provide copies of all the rules and regulations governing the operation of the payment system and other relevant documents to the system participants. The system provider is required to keep the documents and its contents, provided to it by the system participants, as confidential and is prohibited from disclosing the same, except in accordance with the provisions of law.(Sections 20 to 22 of the Act)

Ans. The Act lays down an elaborate mechanism for settlement of disputes between system participants in a payment system, between system participant and system provider and between system providers. The Act requires the system provider to make provision in its rules or regulations for creation of a panel to decide disputes between system participants. Where any system participant is dissatisfied with the decision of the panel, or where disputes arise between system participant and system provider or between system providers, such disputes are required to be referred to the Reserve Bank for adjudication, whose decision shall be final and binding on the parties. In cases where the Reserve Bank, in its capacity either as a system participant or system provider, is itself a party to the dispute, then there is a provision for referring such cases to the Central Government for adjudication. (Section 24 of Act)

Ans. Under the PSS Act, 2007, dishonour of an electronic fund transfer instruction due to insufficiency of funds in the account etc., is an offence punishable with imprisonment or with fine or both, similar to the dishonour of a cheque under the Negotiable Instruments Act 1881. Subject to complying with the procedures laid down under the PSS Act, 2007, criminal prosecution of defaulter can be initiated in such cases. This provision was introduced to discourage dishonour of electronic payment instructions. (Section 25 of the Act)

Ans. Under the PSS Act, 2007, operating a payment system without authorization, failure to comply with the terms of authorization, failure to produce statements, returns information or documents or providing false statement or information, disclosing prohibited information, non-compliance of directions of Reserve Bank violations of any of the provisions of the Act, Regulations, order, directions etc., are offences punishable for which Reserve Bank can initiate criminal prosecution. Reserve Bank is also empowered to impose fine for certain contraventions under the Act. (Sections 26 and 30 of the PSS Act, 2007).