Parl passes Payments and Settlement Bill

Parliament on Monday passed a bill that seeks to address the problem of insolvency in the payment and settlement system by increasing transparency and stability and bring India’s banking payment system in sync with international practices.

“The Payments and Settlement Systems (Amendment) Bill, 2014” was passed on Monday by Rajya Sabha by voice vote, with members cutting across party lines extending their support to the bill. The bill was earlier passed by Lok Sabha.

Moving the amended bill, Finance Minister Arun Jaitley said it was needed to address the issue of insolvency so that there is protection for payments. The amendment to the Payment and Settlement Systems Act, 2007, was proposed to update the regulations in line with globally accepted standards.

The amendment seeks to protect funds collected from the customers by the payment system providers and to extend the Act to cover trade repository and legal entity identifier issuer. A Legal Entity Identifier is an unique ID associated with a single corporate entity.

“The amendments to the said Act have been proposed to increase transparency and stability of Indian financial markets in line with globally accepted norms,” the bill’s objectives state.