Framework for imposing monetary penalty on authorised payment system operators / banks under the Payment and Settlement Systems Act, 2007

RBI/2019-20/140
DPSS.CO.OD.No.1328/06.08.005/2019-20

January 10, 2020

The Chairman / Managing Director / Chief Executive Officer
Authorised Payment System Operators / Banks

Madam / Dear Sir

Framework for imposing monetary penalty on authorised payment system
operators / banks under the Payment and Settlement Systems Act, 2007

Please refer to the Reserve Bank of India (RBI) circular DPSS.CO.OD.No.1082/06.08.005/2016-17 dated October 20, 2016 advising the framework for imposition of monetary penalty and compounding of contraventions / offences under Sections 30 and 31, respectively of the Payment and Settlement Systems (PSS) Act, 2007.

2. The payment system landscape has witnessed rapid developments since then with increased adoption of technology, availability of payment products, entry of more non-bank players, dis-intermediation, significant surge in turnover, etc. To ensure that the payment systems are safe and secure and the various stakeholders conform to regulatory requirements, on review it has been decided to revise the process of levy of penalty on payment system operators by the Reserve Bank of India.

3. A table showing the changes made to the existing framework is in Annex 1; salient features of the revised framework are in Annex 2. The revised framework continues to centre around objectivity and transparency in the decision-making process. It may be noted that action taken under this framework would be without prejudice to any other laws of the country.

Yours faithfully

(Rajani Prasad)
General Manager O-i-C

Encl.: As above