In exercise of the powers conferred by sub section 1 read with clauses b to f of sub section 2 of Section 38 of the Payment and Settlement Systems Act

## Report on Payment and Settlement Systems Amendment Regulations, 2022 **1. Executive Summary:** This report analyzes the Payment and Settlement Systems Amendment Regulations, 2022, as published in the Gazette of India. The amendment, issued by the Reserve Bank of India (RBI), modifies the Payment and Settlement Systems Regulations, 2008. Key changes include substituting "system provider" with "system participant" in Regulation 5, revising Regulation 6 regarding the submission of returns and documents, and deleting Items 3, 4, and 6 from the Schedule. The primary purpose of these amendments, as inferred from the text, appears to be refining the regulatory framework by clarifying terminology, streamlining reporting procedures, and potentially removing redundant or outdated provisions. These changes directly impact entities operating within the payment and settlement systems landscape. **2. Introduction:** This report provides an overview and analysis of the Payment and Settlement Systems Amendment Regulations, 2022, based solely on the official notification published in the Gazette of India. The report aims to inform stakeholders about the specific changes introduced by this amendment. **3. Policy Overview:** * This is an amendment to the Payment and Settlement Systems Regulations, 2008. * Core Objective(s) as Inferred: To refine and update the regulatory framework for payment and settlement systems in India. The changes suggest a focus on clarifying terminology, streamlining reporting requirements, and potentially removing obsolete provisions. **4. Background and Rationale:** Since this is an amendment, the likely reasons for the changes focus on improving or correcting aspects of the original 2008 regulations. The amendment appears to address the following: * **Clarification of Terminology:** The substitution of "system provider" with "system participant" in Regulation 5 suggests a need to standardize or refine the terminology used in the regulations. This could be to ensure consistency and avoid ambiguity in the application of the rules. * **Streamlining Reporting Procedures:** The revisions to Regulation 6, pertaining to the submission of returns and documents, indicate an effort to optimize the reporting process. The new language specifies the form of submission, the submission location (Mumbai Central Office), and provides the RBI with the flexibility to direct submissions to other offices as needed. This likely aims for increased efficiency and control over the reporting process. * **Removal of Redundant or Obsolete Items:** The deletion of Items 3, 4, and 6 from the Schedule suggests that these items are no longer relevant or necessary within the current regulatory environment. **5. Key Provisions / Changes:** The Payment and Settlement Systems Amendment Regulations, 2022, introduce the following key changes: * **Regulation 5:** * **Original:** The text only mentions "system provider". * **Amendment:** The term "system provider" shall be substituted with "system participant." * **Effect:** This change replaces the term "system provider" with "system participant." It clarifies who is being regulated. * **Regulation 6:** * **Original:** The amendment mentions the omission of sub-regulation 2 and changes to sub-regulations 3 and 4. No content of the original regulation is provided. * **Amendment:** * Sub-regulation 2 shall be omitted. * Sub-regulation 3 shall be renumbered as sub-regulation 2 and substituted with the following: "The returns and documents as required by the Bank under sub regulation 1 above shall be submitted by the system provider in the form specified by the Bank from time to time." * Sub-regulation 4 shall be renumbered as sub-regulation 3 and substituted with the following: "The returns and documents under subregulation 1 shall be submitted by the system provider from its registered office to the office of the Bank Department of Payment and Settlement Systems, Central Office situated in Mumbai." It includes a proviso that the Bank may direct submission to other offices. * **Effect:** Regulation 6 is significantly restructured. The omission of sub-regulation 2 suggests it was deemed unnecessary. The revised sub-regulation 2 (previously 3) gives the RBI the authority to specify the form for submitting returns and documents. The revised sub-regulation 3 (previously 4) dictates the central office as the primary submission point, while granting the RBI the power to designate alternative submission locations. * **Schedule:** * **Original:** The amendment mentions items 3, 4 and 6 exist in the original document. * **Amendment:** Items numbers 3, 4 and 6 shall be deleted. * **Effect:** Removes items 3, 4, and 6 from the schedule. The specific content of these items cannot be determined from the text. **6. Target Audience and Stakeholders:** Based on the provided text, the primary target audience and stakeholders are: * **System Participants:** Entities operating within the payment and settlement systems, as these are now the explicitly named entities subject to the regulations. * **Reserve Bank of India (RBI):** Specifically, the Department of Payment and Settlement Systems, Central Office in Mumbai. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Reserve Bank of India (RBI), specifically the Department of Payment and Settlement Systems. * **Timelines/Procedures:** The regulations come into force on the date of their publication in the Official Gazette (February 16, 2022, based on the provided document). The amendment specifies that the returns and documents should be submitted to the RBI Department of Payment and Settlement Systems, Central Office in Mumbai, unless otherwise directed by the Bank. The form for submitting returns and documents will be specified by the Bank from time to time. * **Amendment-Specific Implementation:** Affected entities must adapt their reporting procedures to align with the specified requirements in the revised Regulation 6, and any future directives from the RBI regarding submission forms or locations. The absence of Items 3, 4, and 6 from the schedule must also be taken into account immediately. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these specific changes are: * **Enhanced Clarity and Consistency:** Replacing "system provider" with "system participant" promotes consistent language. * **Improved Reporting Efficiency:** The revised Regulation 6 is expected to streamline the reporting process, ensuring that the RBI receives the necessary information in a standardized format and at designated locations. The flexibility to direct submissions to other offices provides the RBI with greater control over information flow. * **Regulatory Modernization:** Removing items from the schedule suggests a streamlining of the regulatory framework, eliminating requirements deemed no longer necessary or relevant. **9. Conclusion:** The Payment and Settlement Systems Amendment Regulations, 2022, represent a refinement of the existing regulatory framework for payment and settlement systems in India. The changes, including clarifying terminology, restructuring reporting procedures, and deleting items from the schedule, are intended to enhance clarity, improve efficiency, and modernize the regulatory landscape. Stakeholders, particularly system participants, should carefully review these amendments and adapt their practices to ensure compliance.

Key Entities Referenced