The PSS Act, 2007 provides for the regulation and supervision of
payment systems in India and designates the Reserve Bank of India
(Reserve Bank) as the authority for that purpose and all related
matters. The Reserve Bank is authorized under the Act to constitute a
Committee of its Central Board known as the Board for Regulation and
Supervision of Payment and Settlement Systems (BPSS), to exercise its
powers and perform its functions and discharge its duties under this
statute. The Act also provides the legal basis for “netting” and
“settlement finality”. This is of great importance, as in India, other
than the Real Time Gross Settlement (RTGS) system all other payment
systems function on a net settlement basis.