Govt proposes Payments Regulatory Board under RBI in place of BPSS

In a bid to strengthen the grievance mechanism for the digital payments ecosystem, the government is replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) by setting up Payments Regulatory Board in the Reserve Bank of India (RBI).

Presenting the Budget 2017, Finance minister Arun Jaitley said, “The Committee on Digital Payments has recommended structural reforms in the payment eco-system, including amendments to the Payment and Settlement Systems Act, 2007…It is proposed to create a Payments Regulatory Board in the RBI by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems.”

The proposed board will have the RBI governor as the chairperson, and central bank’s Deputy Governor in charge of payments and settlements as a key member. RBI office will also nominate a third member. The board will also have three members nominated by the central government.

The six-member regulatory team will resolve disputes, ensure customer protection and check any foul play by dominant players. The board will also oversee interoperability of digital transactions and facilitate competition and innovation among financial technology companies in the payments space.

According to the Economic Times report, the board will also be "responsible for consumer protection, decide on penalties and create appeal mechanisms, which could ensure faster resolution of disputes over the settlement of digital payments."

Naveen Surya, chairman of the Payments Council of India said, “The Finance Minister said the recommendations will be reviewed and implemented. The move to set up a board will create a dedicated focus on digital payment as a subject, which is a vast area.”

The government is also planning to create a Computer Emergency Response Team for the Financial Sector (CERT-Fin) to deal with potential cyber-threats to the financial sector. The sector will work in close coordination with all financial sector regulators and other stakeholders.