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    Question

    Under Section 30 of the Payment and Settlement Systems

    Act, 2007, the RBI is empowered to impose a penalty on a payment system provider for contravention of any provision of the Act. What is the maximum penalty?
    A ₹5 lakh flat penalty regardless of the amount involved in the contravention Correct Answer Incorrect Answer
    B ₹10 lakh or twice the amount involved in the contravention, whichever is higher Correct Answer Incorrect Answer
    C ₹50 lakh for the first contravention and ₹1 crore for each subsequent contravention Correct Answer Incorrect Answer
    D ₹25 lakh for systemic payment system operators and ₹10 lakh for others Correct Answer Incorrect Answer

    Solution

    Section 30 of the Payment and Settlement Systems Act, 2007 empowers the RBI to impose a penalty of up to ₹10 lakh or twice the amount involved in the contravention, whichever is higher, on any payment system provider or system participant who contravenes any provision of the Act, rules, or regulations. This penalty is in addition to any other penalty prescribed elsewhere under the Act. Additionally, for continuing contraventions, a further penalty of up to ₹25,000 per day may be imposed for each day the contravention continues after the first.

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