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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI issues FAQs on Payment and Settlement Systems Act, 2007

20-Oct-2025 | NA

RBI has issued FAQS on Payment and Settlement Systems Act, 2007 and exercises its powers through the Payments Regulatory Board (PRB). Key Highlights: 1. Applicability - The Act applies to all systems that enable fund transfers, clearing, and settlements, such as UPI, NEFT, RTGS, card networks, wallets, and remittance systems. It excludes stock exchanges and their clearing corporations. 2. Authorization Requirement - No entity, whether Indian or foreign, can operate or start a payment system without prior authorization from the RBI, and must apply in the prescribed format with a fee of Rs. 10,000. 3. Regulatory Powers of RBI - RBI can frame regulations, issue directions, conduct inspections, and collect information from system providers, set operational standards such as message formats, settlement timings, and membership criteria, and has the authority to refuse, revoke, or suspend authorization if a provider violates the Act or RBI directions. 4. Duties of System Providers - System providers must disclose charges, terms, and rules to all participants clearly further should protect participant data and maintain confidentiality. 5. Dispute Resolution - Disputes among system participants must first be handled by an internal panel formed by the system provider. 6. Penalties and Offences - The Act prescribes penalties for unauthorized operations, false reporting, non-compliance, and violation of RBI directions. RBI can impose fines or initiate prosecution against violators. For more information, please refer to the attached document.

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