1.

SARFAESI Act, 2002:

Key sections and features:
• Section 3-12B: Regulation of securitization and reconstruction of financial assets
• Section 13-19: Enforcement of security interest without court intervention
• Section 20-26A: Establishment of Central Registry
• Section 13(2): 60-day notice period to defaulters before taking possession of assets
• Empowers banks/financial institutions to recover NPAs without court intervention
• Allows banks to take possession, sell or lease secured assets
• Establishment of Asset Reconstruction Companies (ARCs)
2. Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961:
Key features:
• Provides deposit insurance up to ₹5 lakh per depositor per bank
• Covers all commercial banks, including foreign bank branches in India
• Covers savings, fixed, current, and recurring deposits
• Does not cover deposits of foreign governments, central/state governments, inter-bank
deposits
• Premium paid by insured banks, not depositors
• Separate Deposit Insurance Fund maintained
3. Banking Regulation Act, 1949:
Key sections and features:
• Section 5: Definitions of banking terms
• Section 22: Licensing of banking companies
• Section 35A: Power of RBI to give directions to banks
• Section 45: Power of RBI to apply to Central Government for suspension of business by
a banking company
• Regulates banking companies in India
• Gives extensive powers to RBI for supervision of banking firms
4. Reserve Bank of India Act, 1934:
Key sections and features:
• Section 3: Establishment and incorporation of RBI
• Section 17: Defines RBI's business operations
 • Section 22: Right to issue bank notes
• Section 42: Cash reserve requirements for scheduled banks
• Establishes RBI as India's central bank
• Gives RBI powers to supervise banks, manage foreign exchange, issue currency

1. Definitions (Section 2):

The Act provides important definitions for terms like "payment obligation", "payment
instruction", "settlement", "payment system", etc. These definitions help clarify the scope and
applicability of the Act.

2. Authorization (Section 4):

No payment system can operate without authorization from the Reserve Bank of India (RBI).
The RBI grants authorization to entities that satisfy the necessary credentials to function as a
payment system.

3. Powers of RBI (Sections 3, 10, 11):

- The RBI is designated as the authority for regulation and supervision of payment systems in
India
- RBI has the power to determine standards for payment systems.
- RBI can access any information related to payments and inspect payment system offices.

4. Board for Regulation and Supervision of Payment and Settlement Systems (BPSS):
The Act provides for the constitution of BPSS by RBI to exercise powers and perform
functions related to payment systems regulation.

5. Settlement Finality (Section 23):

The Act legally recognizes settlement finality. It states that a settlement, whether gross or net,
will be final and irrevocable once determined.

6. Duties of System Providers (Sections 20-22):

The Act lays down the duties of system providers, including operating in accordance with the
Act's provisions, disclosing terms and conditions to participants, and maintaining confidentiality.

7. Dispute Resolution (Section 24):

 The Act prescribes a mechanism for settlement of disputes between system participants or
between participants and system providers.

8. Offenses and Penalties (Chapter 7):

The Act includes provisions for penalties and imprisonment for contraventions of certain
sections.
The Act aims to shift from cash-based to electronic/cashless payment system

For Details refer to:

[1] https://blog.ipleaders.in/payment-settlement-system-act-2007/
[2] https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=420
[3] https://www.trotal.com/2017/01/payment-and-settlement-system-act-2007.html
[4] https://lexlife.in/2020/05/09/explained-payment-and-settlement-systems-act-2007/