(1) Any person desirous of commencing or carrying on a payment system may apply to the Reserve Bank for an authorisation under this Act.
(2) An application under sub-section (1) shall be made in such form and in such manner and shall be accompanied by such fees as may be prescribed.
Simplified Explanation
Section 5 of the Payment and Settlement Systems Act, 2007 governs the process for applying for authorization to commence or operate a payment system in India. Here’s a breakdown of the section:
Key Provisions of Section 5:
1. Application for Authorization:
- Any person (individual, company, or other entity) who wishes to commence or carry on a payment system must apply to the Reserve Bank of India (RBI) for authorization.
- This means that no one can start or operate a payment system without first obtaining permission from the RBI.
2. Application Process:
- The application must be submitted in a prescribed form and manner. This means that the RBI will set out specific requirements for how the application should be made, including the format of the application and the process to follow.
- The application must also be accompanied by fees that are prescribed by the RBI. These fees could cover administrative costs related to the processing of the application.
Summary:
Section 5 specifies the process for obtaining authorization to operate a payment system. It requires applicants to:
- Submit an application to the RBI.
- Follow the prescribed format, manner, and pay the required fees as determined by the RBI.
The section emphasizes that the Reserve Bank of India holds the authority to approve or reject applications for the operation of payment systems, ensuring that only regulated and authorized entities can offer such services.
