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  • #120489 Reply
    advtanmoy
    Keymaster

    In India, the payment and settlement systems are regulated by the Payment and Settlement Systems Act, 2007 (PSS Act) which was legislated in December 2007. The PSS Act as well as the Payment and Settlement System Regulations, 2008 framed thereunder came into effect from August 12, 2008. In terms of Section 4 of the PSS Act, no person other than the Reserve Bank of India (RBI) can commence or operate a payment system in India unless authorised by RBI. Reserve Bank has since authorised payment system operators of pre-paid payment instruments, card schemes, cross-border in-bound money transfers, Automated Teller Machine (ATM) networks and centralised clearing arrangements.

    [See the full post at: Overview of Payment Systems in India-Notes By RBI]

    #120490 Reply
    advtanmoy
    Keymaster

    Payment Systems in India-2022

    In November, digital transactions across payment modes built upon their robust performance during the festival season in October. Retail transactions grew impressively owing to positive consumer sentiments11 and a high-spirited wedding season.12 Bharat Bill Payment System (BBPS) transactions grew steadily on the back of loan repayments and FasTag segments. Transactions in loan repayments doubled, which is indicative of reviving household finances. This is corroborated by the strong growth observed in the National Automated Clearing House (NACH) debit transactions related to inter alia loan repayments, insurance premia and investment in mutual funds. The growth (y-o-y) in the Unified Payments Interface (UPI) was spearheaded by a rise in Person-to-Merchant (P2M) transactions in October and November. This growth in P2M transactions with a high transaction volume under merchant categories like groceries and supermarkets, restaurants, departmental stores, drug stores and pharmacies signals increasing usage of the UPI for day-to-day purchases. In order to enhance the ease of making payments concerning e-commerce and investments in securities, the Statement on Developmental and Regulatory Policies on December 7, 2022 announced that the capabilities in UPI will be further augmented by introducing a single-block and multiple-debits functionality. Also, the scope of Bharat Bill Payment System (BBPS) is being expanded to include additional categories of payments and collections, both recurring and non-recurring, and for all category of billers (businesses and individuals).

    #120497 Reply
    advtanmoy
    Keymaster

    Indian Payment Legal Framework

    • Reserve Bank of India Act, 1934
    • Payment and Settlement Systems Act, 2007 As Amended up to 2019
    • Payment and Settlement Systems Regulations, 2008 As Amended up to 2022
    • Others – Gazette Notifications
    • RTGS System Regulations 2013
    • Authorisation Applications from Overseas Principals for cross border in-bound money transfer services to India
    • Exchange Houses
    • Interbank- Cheque Drawing Arrangements
    • Procedural Guidelines for Cheque Truncation System (CTS) approved by the Bank for the concerned system provider

    Oversight of Payment and Settlement Systems Oversight of the payment and settlement systems is a central bank function whereby the objectives of safety and efficiency are promoted by monitoring existing and planned systems, assessing them against these objectives and, where necessary, inducing change. By overseeing payment and settlement systems, central banks help to maintain systemic stability and reduce systemic risk, and to maintain public confidence in payment and settlement systems. The Payment and Settlement Systems Act, 2007 and the Payment and Settlement Systems Regulations, 2008 framed thereunder, provide the necessary statutory backing to the Reserve Bank of India for undertaking the Oversight function over the payment and settlement systems in the country.

    #120498 Reply
    advtanmoy
    Keymaster

    Section 269SU of the Income-tax Act 1961.

    The following electronic modes of payment for the purposes of Section 269SU have been prescribed vide notification no. 105/2019 dated 30.12.2019 :-

    1. Debit Card powered by RuPay
    2. Unified Payments Interface (UPI) (BHIM-UPI)
    3. Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)

    A Circular no. 32/2019 dated 30.12.2019 has also been issued to clarify that based on section 10A of the Payment and Settlement Systems Act 2007, any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 01st January, 2020 on payment made through prescribed electronic modes. Moreover, in order to allow sufficient time to persons, who are required to provide facilities for accepting payments through prescribed electronic modes, to install and operationalise such facilities, it has been clarified that the penalty under section 271DB of the Act shall not be levied if the facilities are installed and operationalised on or before 31st January, 2020. However, failure to do so shall invoke penalty of five thousand rupees per day from 1st February, 2020 under section 271DB of the Act.

    It has been noted from the return of income furnished by you for the Assessment Year 2019-20 that your total sales/ turnover/ gross receipts during the financial year ending 31st March, 2019 exceeds Rs. 50 crore. Therefore, as per section 269SU of the Act, you are required to provide the facilities for accepting payment through the aforesaid prescribed electronic modes. These facilities are required to be operationalised by you on or before 31st January, 2020. Failure to do so may make you liable for levy of penalty of five thousand rupees per day from 1st February, 2020 under the Act.

    #120499 Reply
    advtanmoy
    Keymaster

    Payment and Settlement Systems in Srilanka, Legal Framework

    The Payment and Settlement Systems Act. No. 28 of 2005 (PSSA) provides for the regulation, supervision and monitoring of payments, clearing and settlement systems, the regulation of providers of money services and the electronic presentment of cheques in Sri Lanka. 

    Payment Card and Mobile Payment Systems Regulations No. 1 of 2013, which was issued under PSSA, provides for the regulations of issuers of payment cards, financial acquirers of payment cards, operators of customer account based mobile payment systems and operators of mobile phone based e-money systems. 

    #120500 Reply
    advtanmoy
    Keymaster

    Monetary System and the Central Bank of Srilanka

    Monetary Law Act, No. 58 of 1949 (Incorporating Amendments up to 30th June, 2014)

    An Act to establish the monetary system of Sri Lanka and the Central Bank to administer and regulate the system and to confer and impose upon the Monetary Board of the Central Bank powers, functions and responsibilities necessary for the purpose of such administration and regulation, and to provide for connected matters. This reprint which incorporates all amendments made to that Act up to 30th June, 2014 is, however, not a statutory reprint. It is only issued for purposes of convenience.

     

    Banking

    Banking Act, No. 30 of 1988

    An Act to provide for the introduction and operation of a procedure for the licensing of persons carrying on banking business; for the regulation and control of matters relating to the business of banking; and to provide for matters connected therewith or incidental thereto.

     

    Non Banking

    Finance Business Act, No. 42 of 2011

    An Act to provide for control and supervision of finance companies and to provide for matters connected therewith or incidental thereto.

    Finance Leasing Act, No.56 of 2000

    An Act to provide for the regulation and monitoring of finance leasing businesses; to specify the rights and duties of lessors and lessees and suppliers of equipment; and for matters connected therewith or incidental thereto.

     

    Micro Finance

    Micro finance Act, No. 6 of 2016

    An Act to provide for the licensing, regulation and supervision of companies carrying on microfinance business; the registration of non-governmental organizations accepting limited savings deposits as microfinance non-governmental organizations; for the setting up of standards for the regulation and supervision of microfinance non-governmental organizations and micro credit non-governmental organizations and to provide for matters connected there with or incidental thereto.

    Foreign Exchange

    Monetary Law Act No. 58 of 1958 (No. 2263/41 – January 21, 2022)
    Foreign Exchange Act No. 12 of 2017  (No. 2234/49 – July 02, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2222/60 – April 09, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2220/69 – March 26, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2218/38 – March 09, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2215/39 – February 18, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/40 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/39 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/38 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/37 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/36 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/35 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2213/34 – February 03, 2021)
    Foreign Exchange Act No. 12 of 2017  (No. 2206/25 – December 18, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2202/7 – November 17, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2196/22 – October 06, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2182/37 – July 02, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2182/33 – July 01, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2182/32 – July 01, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2170/4 – April 08, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2169/3 – April 02, 2020)
    Foreign Exchange Act No. 12 of 2017  (No. 2145/49 – October 17, 2019)
    Foreign Exchange Act No. 12 of 2017  (No. 2112/25 – February 28, 2019)
    Foreign Exchange Act No. 12 of 2017  (No. 2112/17 – February 27, 2019)
    Foreign Exchange Act No. 12 of 2017  (No. 2063/12 – March 19, 2018)
    Regulations made under Section 29 read with Section 7 of the Foreign Exchange Act, No. 12 of 2017

    Foreign Exchange Act No. 12 of 2017 (No. 2045/56 – November 17, 2017)
    Regulations made under Section 29 read with Section 7 of the Foreign Exchange Act, No. 12 of 2017

    Foreign Exchange Act No. 12 of 2017 (No. 2043/31 – October 31, 2017)
    Foreign Exchange Act No. 12 of 2017 (No. 2040/43 – October 13, 2017)
    Foreign Exchange Act No. 12 of 2017 (No. 2036/32 – September 14, 2017)

    Foreign Exchange Act No. 12 of 2017

    An act to provide for the promotion and regulation of foreign Exchange; to vest the responsibility for promoting and Regulating foreign exchange in the central bank as the Agent of the government; to provide for the repeal of the Exchange control act (chapter 423); and to provide for Matters connected therewith or incidental thereto.

    Exchange Control Act No. 24 of 1953 (Repealed with effect from 20.11.2017)

    An Act to make provision conferring powers, and imposing duties and restrictions, in relation to gold, currency, payments, securities, debts, and the import, export, transfer and settlement of property, to authorise the Central Bank to administer the provisions aforesaid, and to provide for matters connected therewith.

    Employee Provident Fund

    Employees Provident Fund (Amendment) Act, No 2 of 2012

    An Act to amend the Employees Provident Fund Act, No 15 of 1958

    EPF Act No 15 of 1958 and Amendments ( Incorporating Amendments up to 31st December, 1998 )
    An Act to establish a provident fund for the benefit of certain classes of employees and to provide for matters connected therewith or incidental thereto. Owing to the numerous amendments made to the Employees’ Provident Fund Act, it has become necessary to publish a reprint of the Act. This reprint which incorporates all amendments made to that Act up to 31st December, 1998 is, however, not a statutory reprint. It is only issued for purpose of convenience.

     

    Other Legislative Enactments

    Local Treasury Bills Ordinance No. 8 of 1923

    An ordinance to provide for the borrowing of money by the issue of Treasury Bills in Sri Lanka.

    Registered Stock and Securities Ordinance No. 7 of 1937 ( Incorporating Amendments up to 31st December, 2004 )
    An ordinance to make provision for the creation and issue of registered stock, government promissory notes and bearer bonds for the purpose of raising loans in Sri Lanka.

    Payment and Settlement Systems Act No 28 of 2005

    An Act to provide for the regulation of payment, clearing and settlement systems; for the disposition of securities on the books of the Central Bank; for the regulation of providers of money services; for the electronic presentment of cheques; and to provide for matters connected therewith or incidental thereto.

    Financial Transactions Reporting Act No. 6 of 2006

    An Act to provide for the collection of data relating to suspicious financial transactions to facilitate the prevention, detection, investigation and prosecution of the offences of money laundering and the financing of terrorism respectively; to require certain institutions to undertake due diligence measures to combat money laundering and the financing of terrorism; to identify the authority which will be responsible for monitoring the activities of all institutions to whom this Act applies; and to provide for matters connected therewith or incidental thereto.

    Active Liability Management Act No. 8 of 2018

    An act to authorise the raising of loans in or outside Sri Lanka for the purpose of Active Liability Management to improve public debt management in Sri Lanka and to make provisions for matters connected therewith or incidental thereto

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