CURRENT AFFAIRS
CURRENT AFFAIRS
Description
In a significant shift within India’s financial regulatory framework, the Government of India has launched the Payments Regulatory Board (PRB) to strengthen supervision over the nation’s payment and settlement systems. This newly formed entity replaces the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), which functioned under the Reserve Bank of India (RBI). The creation of PRB highlights the growing importance of robust governance in the expanding digital and fintech ecosystem.
Structure Of PRB
The Payments Regulatory Board will be led by the Governor of the RBI, who will serve as its Chairperson. Other members include the Deputy Governor in charge of payment systems and three nominees from the Central Government. Additionally, subject matter experts may be invited to contribute as temporary advisors, ensuring the inclusion of external insights along with regulatory expertise.
Role Of DPSS
The Department of Payment and Settlement Systems (DPSS) will function as the operational arm of the PRB. Its primary responsibilities include policy execution and ensuring adherence to regulatory norms. This collaboration is designed to improve the operational efficiency and responsiveness of India’s payments infrastructure.
Decision-Making Process
Each member of the board holds one vote, and decisions will be determined by a majority. In the event of a tie, the Chairperson’s vote will be decisive. This model supports inclusive deliberation while maintaining leadership clarity.
Delegation And Flexibility
The PRB has the authority to delegate powers to its Chairperson, individual members, or sub-groups as needed. This arrangement enables agile decision-making in response to rapid developments in the payment sector. The board is required to convene at least twice annually to review progress and address emerging issues.
Eligibility And Conflict Of Interest Provisions
To ensure objectivity and competence, nominated members must be under the age of 70 and must not have any conflicting financial or professional interests. These criteria are designed to promote transparency and protect the integrity of the regulatory body.
Historical Background And Institutional Resistance
The concept of an independent payment regulator has sparked debate in past years. Notably, in 2018, the RBI voiced strong opposition to creating a standalone regulatory body outside its domain, citing the intertwined nature of monetary policy and payment systems. The current arrangement attempts to balance regulatory independence with central bank oversight.
Outlook For India’s Digital Payment Landscape
The introduction of the PRB is poised to bring greater innovation, reliability, and integration across India’s growing digital payments sector. With a mix of regulatory and technical expertise, the board is expected to tackle challenges more effectively and support a secure, consumer-friendly payment environment.
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