Developments in Payment Systems in India and Digital Banking
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One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What two concepts does the Payment and Settlement Systems Act, 2007 expressly legalise to protect the inter-bank settlement process?
The PSS Act, 2007 provides the legal basis for 'netting' and 'settlement finality,' which protect the inter-bank settlement process.
What legal concepts does the PSS Act, 2007 provide a basis for to protect inter-bank settlements?
Netting and settlement finality are legally protected under PSS Act.
Which regulatory authority in India oversees and regulates payment and settlement systems under the PSS Act, 2007?
The Reserve Bank of India (RBI) is the designated authority to oversee and regulate payment and settlement systems in India under the PSS Act, 2007.
Why does RTGS limit systemic risk in inter-bank settlement compared to deferred systems?
RTGS effects final settlement of individual transfers continuously during the processing day.
How does an RTGS system reduce systemic risk in inter-bank settlements?
RTGS limits settlement and systemic risks because it effects final settlement of individual funds transfer transactions on a continuous basis during the processing day, eliminating deferred net settlement exposure.
What does NACH Debit facilitate for institutions like electricity companies?
NACH Debit pulls funds from large numbers of payers across multiple banks.
What does RTGS stand for and what is its primary characteristic?
RTGS stands for Real Time Gross Settlement; its primary characteristic is that it processes and settles each funds transfer transaction individually and in real time without netting.
What type of payments does NACH Credit typically handle for institutions?
NACH Credit handles salary, dividend payments via single debit multiple credits.
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