Still a strong bias for cash payment; need to reassess the PSS law: report

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The pandemic has forced an inevitable shift to digital payments, but Indians continue to have a strong penchant for cash payments, according to a report. Due to the emergence of disruptive technologies leading to technology-enabled payment solutions, there is a need to reassess the Payments and Settlement Systems (PSS) Act 2007, a key enabler for promoting digital transactions , according to the Vidhi Center for Legal Policy report.

The act was enacted more than a decade ago when the digital payments market in India was in its infancy and the act was primarily enacted to regulate payment systems from a systemic perspective and to confer on the RBI the necessary powers to regulate these systems, he said. .

Although the RBI has repeatedly sought to fill existing gaps in primary law through instructions issued from time to time, this may not be the optimal regulatory or policy response, she said. declared.

Such an approach is also not in line with international best practice where several countries have, alongside policy interventions, undertaken efforts to modernize their payments legislation to adapt to the rapidly changing industry, did he declare.

The report recommended India to reassess the PSS Act taking into account the evolution of the retail payments industry since its enactment and the future of digital payments in India. He suggested a new Retail Payment Services Act (Proposed Act) for India, based on the principles of proportionate regulation to fully harness the potential of digital retail payments.

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