The Reserve Bank may call for from any system provider such returns or documents as it may require or other information in regard to the operation of his payment system at such intervals, in such form and in such manner, as the Reserve Bank may require from time to time or as may be prescribed and such order shall be complied with.
Simplified Explanation
Section 12 of the Payment and Settlement Systems Act, 2007 grants the Reserve Bank of India (RBI) the power to demand returns, documents, or information from system providers for the purpose of monitoring and regulating the operation of payment systems. This section empowers the RBI to ensure transparency, compliance, and operational integrity within payment systems. Here’s a breakdown of the provisions:
Key Provisions of Section 12:
1. RBI’s Power to Call for Returns, Documents, or Information:
- The RBI can call for:
- Returns (regular reports or financial summaries)
- Documents (records or official papers)
- Other Information (relevant data or insights)
- These documents or information are required in relation to the operation of a payment system. The purpose is to give the RBI a clear and continuous picture of how the payment system is functioning and to ensure it is operating within the legal and regulatory framework.
2. Prescribed Format and Intervals:
- The RBI has the discretion to specify:
- Intervals: The frequency at which the returns or documents need to be submitted (e.g., monthly, quarterly, annually).
- Form and Manner: The format in which the information should be submitted (e.g., electronic submission, paper forms) and how it should be organized or structured.
- The RBI may also issue prescribed regulations to standardize these requirements, ensuring consistency across different system providers.
3. Compliance Requirement:
- System providers must comply with any order issued by the RBI under this section. Failure to provide the required information or documents within the stipulated time could result in penalties or other enforcement actions.
Purpose:
This section serves several important purposes:
- Monitoring Compliance: By requiring regular returns and information, the RBI can monitor whether payment systems are operating in compliance with the regulations and standards set by the Act.
- Transparency and Oversight: This provision ensures that the RBI can obtain real-time or periodic updates on the operations of payment systems, helping it maintain oversight and detect potential risks or issues.
- Regulation and Enforcement: The ability to call for documents and information gives the RBI the tools to enforce compliance with the Act and regulations.
Summary:
Section 12 gives the Reserve Bank of India (RBI) the authority to request returns, documents, or other information from system providers about their payment systems. This is to be done at regular intervals and in a prescribed format. The system provider must comply with these requirements, ensuring the RBI can monitor the operations of payment systems and enforce regulatory standards.
