The finance ministry has finalised the draft payment and settlement Bill, and it is slated to be introduced in the winter session of Parliament beginning on November 23..According to official sources, the Bill would also enable RBI to regulate entities like the Clearing Corporation of India.
With the law in place, finality of financial settlements would be backed by a statute.
Currently, all payments are carried out on a contractual basis. There is no legal teeth to the financial transaction and settlement system in the country. It operates purely on a contractual basis, a senior government official said, adding that though there has been no major disruption in the system, the Bill would ensure that such a disaster never occurred.
The law would also enable RBI to authorise payment systems, revoke authorisation and debar system providers from operating sub-standard payment. Under the proposed Act, RBI can issue standards of access and also levy penalty.
At present, card payment system is outside the ambit of the RBI regulation. Official sources, however, said that with the number of credit card issuers on the rise, it is important to bring the entire plastic money industry under the regulation of the RBI.
Apart from credit card issuers, payment associations like Mastercard and Visa would also be under the RBI lens and with the law in place, RBI would also get the power to give directions to these companies in various matters, like risk mitigation.The finance ministry is currently awaiting the law ministrys nod on the issue.
RBI said that all clearing settlements from the four metros would be settled through the national settlement system by December 2005.