Due to the emergence of disruptive technologies leading to technology-driven payment solutions, there is a need to reassess the Payment and Settlement Systems (PSS) Act 2007, a key tool for promoting digital transactions. , according to the report of the Vidhi Center for Legal Policy.
The law was enacted over a decade ago when the digital payments market in India was in its infancy and the law was primarily enacted to regulate payment systems from a systemic perspective and to empower the RBI has the necessary powers to regulate these systems, he said. .
Although the RBI has repeatedly sought to address existing loopholes in primary law through instructions issued from time to time, this may not be the optimal regulatory or policy response, he said.
Such an approach is also not in line with international best practice where several countries have, along with political interventions, undertaken efforts to modernize their payments law in order to adapt to the rapidly evolving sector, a- he declared.
The report recommended that India reassess the PSS law taking into account developments in the retail payments industry since its enactment and the future of digital payments in India.
He suggested a renewed retail payment services law (proposed law) for India based on the principles of proportionate regulation to harness the full potential of digital retail payments.