LS passes bill to bring payments law in tune with global norms

A bill aimed at bringing India's banking payment system in sync with international practices was passed by the Lok Sabha today with Finance Minister Arun Jaitley saying the world would lack confidence if "obsolete laws" in the financial system exist in this country.
Replying to a debate on Payments and Settlement Systems (Amendment) Bill, Jaitley said there was a "gap" in the law which needed to be addressed so that there is protection for payments in case of insolvency.
The bill seeks to improve the payment and settlement systems by increasing transparency and stability of Indian financial market.
"If we have an obsolete financial system the world will not trust us to the level at which the world should, if we have to relegate ourselves to a country whose financial system must have confidence in itself," Jaitley said.

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 payment must reach you, even if some third party has a court order in his favour... The person you have paid, it must reach him and if it does not reach him because of contingency, then the law must provide for a settlement by the process of which it will reach him.

"This was a gap in the law and that gap is what we are trying to fill up," Jaitley said.