The Vidhi Center for Legal Policy report states that due to the emergence of disruptive technologies leading to technology-based payment solutions, there is a need to re-evaluate the Payment and Settlement Systems Act, 2007 (PSS), which seeks to promote digital transactions. is a major promoter.
The act was enacted more than a decade ago when the digital payments market in India was in its infancy and the law was mainly enacted to regulate and provide payment systems from a systemic perspective. reserve Bank of India With the necessary powers to regulate these systems, it said.
While the RBI, through instructions issued from time to time, has sought to address the existing gaps in the primary law, this may not be the optimal regulatory or policy response, it said.
Such an approach is not in line with international best practices, where many countries have made policy interventions as well as attempts to modernize their payments law to adapt to a rapidly developing industry.
The report recommended that India needs to re-evaluate PSS Act Keeping in view the growth in the retail payments sector since its enactment and the future of digital payments in India.
It suggested a revamped Retail Payment Services Act (proposed law) for India built on the principles of proportional regulation to harness the full potential of retail digital payments.