RBI constitutes six-member board to oversee functioning of payment systems, Pg15.

Key Highlights:

• The Reserve Bank of India (RBI) established a six-member Payments Regulatory Board (PRB) on Tuesday.
• The PRB includes three nominees from the Central government.
• RBI Governor Sanjay Malhotra chairs the Board.
• The PRB replaces the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
• The PRB derives its authority from the Payment and Settlement Systems Act, 2007.

Detailed Insights:

• The PRB aims to oversee the functioning of payment systems in the country.
• Besides the Governor, the RBI representatives are the Deputy Governor in charge of Payment and Settlement Systems.
• Government nominees include the Secretary of the Department of Financial Services, the Secretary of the Ministry of Electronics and Information Technology, and Aruna Sundararajan, former Telecom Secretary.
• The inclusion of government representatives gives the government a say in the functioning of the country’s payment systems.
• The RBI’s Department of Payment and Settlement Systems (DPSS) will support the PRB and report directly to it.
• Decisions during board meetings will be taken by a majority, with the chairperson having a second or casting vote in case of a tie.
• The Board is required to meet at least twice a year.

Key Concepts Involved:

• Payment System: A system that facilitates the transfer of money between payers and beneficiaries.
• Reserve Bank of India (RBI): India's central bank, responsible for regulating the banking system and monetary policy.
• Payment and Settlement Systems Act, 2007: Legislation that provides the legal framework for the regulation of payment systems in India.