The Hindu : Business : RBI panel on payment and settlement systems

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Friday, Mar 11, 2005

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RBI panel on payment and settlement systems

By Our Special Correspondent

CHENNAI, MARCH 10. The Reserve Bank of India has constituted a Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) as a committee of its Central Board.

The move is a continuation of steps initiated by the apex bank to beef up the institutional framework for the payment and settlement systems, crucial components of the country's financial system.

An RBI release said the Governor of the apex bank would be the chairman of the Board. It will comprise deputy governors V. Leeladhar, K. J. Udeshi and S. Gopinath. Central board members H. P. Ranina and N. R. Narayanamurthy will also form part of the board.

Executive Directors in charge of the functions relating to payment systems and financial markets and the principal legal advisor are permanent invitees to the BPSS. In addition, P. S. Shenoy, who has recently demitted office as the Chairman and Managing Director of Bank of Baroda and has vast experience in the filed of payment systems, will be a permanent invitee.

The BPSS comes into effect from today and will have a two-year term. It will prescribe policies relating to the regulation and supervision of all types of payment and settlement systems, set standards for existing and future systems, authorise the payment and settlement systems, determine criteria for membership of these systems, including continuation, termination and rejection of membership.

The RBI release said the National Payments Council, set up in 1999, would continue to exist as an advisory body to the BPSS. In order to assist the BPSS in performing its functions, the RBI had also constituted a new department, the Department of Payment and Settlement Systems.

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