Section 23A: Protection of funds collected from customers.

(1) The Reserve Bank may, in public interest or in the interest of thecustomers of designated payment systems or to prevent the affairs of such designatedpayment system from being conducted in a manner prejudicial to the interests of itscustomers, require system provider of such payment system to—

(a) deposit and keep deposited in a separate account or accounts held ina scheduled commercial bank; or

(b) maintain liquid assets in such manner and form as it may specify fromtime to time, of an amount equal to such percentage of the amounts collected by the system providerof designated payment system from its customers and remaining outstanding, as maybe specified by the Reserve Bank from time to time:

Provided that the Reserve Bank may specify different percentages and the mannerand forms for different categories of designated payment systems.

(2) The balance held in the account or accounts, referred to in sub-section (1), shall not be utilised for any purpose other than for discharging the liabilities arisingon account of the usage of the payment service by the customers or for repaying tothe customers or for such other purpose as may be specified by the Reserve Bankfrom time to time.

(3) Notwithstanding anything contained in the Banking Regulation Act, 1949 (10 of 1949), or the Companies Act, 1956 (1 of 1956) or the Companies Act, 2013 (18 of 2013) or the Insolvency and Bankruptcy Code, 2016 or any other law for the time beingin force, the persons entitled to receive payment under sub-section (2) shall have afirst and paramount charge on the balance held in that account and the liquidator orreceiver or assignee (by whatever name called) of the system provider of the designatedpayment system or the scheduled commercial bank concerned, whether appointed asprovisional or otherwise, shall not utilise the said balances for any other purposesuntil all such persons are paid in full or adequate provision is made therefor.

Explanation.—For the purposes of this section, the expressions—

(a) “designated payment system” shall mean a payment system or a class ofpayment system, as may be specified by the Reserve Bank from time to time,engaged in collection of funds from their customers for rendering payment service;

(b) “scheduled commercial bank” shall mean a “banking company”,“corresponding new bank”, “State Bank of India” and “subsidiary bank” asdefined in section 5 of the Banking Regulation Act, 1949 (10 of 1949) and included in theSecond Schedule to the Reserve Bank of India Act,1934 (2 of 1934).]