DESIGNATED AUTHORITYCentral

Section 3 of The Payment and Settlement Systems Act, 2007

1[3. Designated authority.--(1) The Reserve Bank shall be the designated authority for the regulation and supervision of payment systems under this Act.

(2)The Reserve Bank shall exercise the powers, perform the functions and discharge the duties conferred on it under this Act through a Board to be known as the "Payments Regulatory Board".
(3)The Board shall consist of the following members, namely:--
1. (a)the Governor of the Reserve Bank-Chairperson, ex officio;
2. (b)the Deputy Governor of the Reserve Bank in-charge of the Payment and Settlement Systems-Member, ex officio;
3. (c)one officer of the Reserve Bank to be nominated by the Central Board of the Reserve Bank-Member, ex officio; and
4. (d)three persons to be nominated by the Central Government-Members.
(4)The powers and functions of the Board referred to in sub-section (2), the time and venue of its meetings, the procedures to be followed in such meetings (including the quorum at such meetings) and other matters incidental thereto shall be such as may be prescribed.]

Summary

The Reserve Bank of India (RBI) is the designated authority in charge of regulating and supervising all payment systems.
The RBI carries out its duties through a specific group called the Payments Regulatory Board.
The Board is led by the Governor of the Reserve Bank, who serves as the Chairperson.
Other members include an RBI Deputy Governor in charge of payment systems and one RBI officer picked by the bank's Central Board.
The Central Government also picks three additional people to be members of this Board.
The Board's specific powers, how they meet, and how many people must be present (quorum) are decided by official regulations.

Practical examples

1The Payments Regulatory Board meets in Mumbai on October 5 to discuss new safety rules for mobile wallets. Because Section 3 names the RBI as the authority, the rules they decide on that day will be legally binding.

2When a seat opens up on the Board, the Central Government nominates a finance expert from outside the RBI to fill one of the three government-nominated slots described in Section 3.

FAQ

1. Who is the head of the Payments Regulatory Board?

The Governor of the Reserve Bank of India is the ex officio Chairperson (meaning they hold the position because of their job as Governor).

2. How many people does the Central Government nominate to the Board?

The Central Government nominates three people to be members of the Board.

3. What is the main job of the Reserve Bank under this section?

Its main job is the regulation and supervision of payment systems.

Test yourself

Q1.Under Section 3 of The Payment and Settlement Systems Act, 2007, which entity is the designated authority for regulating payment systems?

Q2.According to Section 3 of The Payment and Settlement Systems Act, 2007, who serves as the Chairperson of the Payments Regulatory Board?

Q3.Under Section 3 of The Payment and Settlement Systems Act, 2007, how many members are nominated by the Central Government to the Payments Regulatory Board?

Q4.According to Section 3 of The Payment and Settlement Systems Act, 2007, the Reserve Bank performs its functions through which specific body?

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