Section 20 of The Payment and Settlement Systems Act, 2007
Every system provider shall operate the payment system in accordance with the provisions of this Act, the regulations, the contract governing the relationship among the system participants, the rules and regulations which deal with the operation of the payment system and the conditions subject to which the authorisation is issued, and the directions given by the Reserve Bank from time to time.
Summary
- Every system provider must run their payment system according to the rules of this Act.
- They must follow all regulations and any directions given by the Reserve Bank.
- They must obey the specific terms and conditions under which their authorization was granted.
- They must act in accordance with the contracts that govern their relationship with participants.
- They must follow the internal rules and regulations that deal with how the payment system is operated.
Practical examples
FAQ
1. Can a system provider ignore the Act if they have a different contract with participants?
No, they must operate in accordance with the Act, the regulations, and their contracts.
2. Who gives the directions that a system provider must follow?
The system provider must follow directions given by the Reserve Bank from time to time.
3. Does a system provider have to follow its own internal rules?
Yes, they must operate in accordance with the rules and regulations which deal with the operation of the payment system.
Test yourself
Q1.Under Section 20 of The Payment and Settlement Systems Act, 2007, which of the following must a system provider follow?
Q2.Besides the Act and RBI directions, what other document must a system provider follow under Section 20 of The Payment and Settlement Systems Act, 2007?
Q3.Does Section 20 of The Payment and Settlement Systems Act, 2007 require compliance with conditions set during authorization?
Q4.Under Section 20 of The Payment and Settlement Systems Act, 2007, what is the role of Reserve Bank directions?