RBI’s latest recommendations to regulate payment aggregators in offline spaces

The RBI has released two consultation papers in an effort to better regulate payment aggregators that conduct in-person transactions. It also aims to increase the safety of the ecology.

What is Payment Aggregators?

• When a payment aggregator partners with different processing entities, such as acquiring banks, direct banks (in the case of net banking), issuers of wallets and alternative credit products, on a single platform, it aggregates various payment modes, such as cards, UPI, net-banking, wallets, and credit products.

What exactly are the norms about? 

• Extension to Offline Transactions: Payment aggregators’ online and e-commerce activities are covered by the current criteria. The most recent draft suggests bringing these rules into offline contexts, such as close quarters or in-person interactions.
• Convergence on Standards: The goal of the suggested rules is to bring about convergence on data collecting and storage standards for both online and offline transactions that payment aggregators manage.
• Detailed Guidelines: The suggested guidelines are thorough and in-depth, taking into account the lessons that have been learnt from events like the Paytm Payments Bank disaster.
• Strengthening environment: It appears that the RBI wants to make sure that regulatory standards are followed and that the payment aggregator environment is protected against opacity.
• fines for Non-Compliance: Paytm Payments Bank was hit with fines by the Financial Intelligence Unit (FIU-IND) for indulging in illicit operations and disregarding regulatory regulations. The penalties indicate severe repercussions for non-compliance with the proposed rules.

Is registration with the RBI being made compulsory? 

• PA based on Bank: The RBI would not need to provide a separate authorization for banks that offer physical PA services as part of their regular banking arrangement. It is anticipated that they will adhere to the updated guidelines no later than three months following their issuance.
• PA without Banking: Non-banking organizations that offer PA services offline, at the point of sale (PoS), must notify RBI of their intention to seek authorization within 60 days of the circular’s publication.

Does it talk about provisions for sustainability?

• The goal of minimum net worth is to guarantee non-banking entities’ sustainability: While the requirement for a minimum net worth intends to safeguard the viability of non-banking firms providing proximity/face-to-face transaction services, the proposed requirements principally focus on regulatory compliance and financial stability. This is due to the fact that organizations with stronger financial foundations are better equipped to withstand short-term and long-term economic difficulties and uncertainty.
• Risk-Based Payments: With an emphasis on sustainability, payment aggregators are mandated to allocate risk-based payments to retailers. This entails determining each merchant’s risk and modifying the terms of payment accordingly.

The goal of the proposed regulations is to bring standards for data collecting and storage for online and offline transactions handled by payment aggregators closer together. This facilitates the simplification of legal requirements and guarantees uniformity in data management procedures.

How can the Digital India program help farmers to improve farm productivity and income? What step has the government taken in this regard? (2015)

Pulicat Wetland

• Concerns are raised by the settlement of claims for nearby villages inside the boundaries of the Birds Sanctuary and Pulicat Wetland.
• The Eco-Sensitive Zone (ESZ) and a sizable chunk of the sanctuary will be denoted for industrial park construction by the state government.

About

• The second-largest bird sanctuary in India is Pulicat Lake Bird Sanctuary.
• It passes through the districts of Thiruvallur in Tamil Nadu and Nellore in Andhra Pradesh.
• Covering 759 square kilometers, the sanctuary is located along the Bay of Bengal coast.
• The Kalangi River borders the sanctuary from the northwest, the Swarnamukhi River borders it from the north, and the Arani River borders it from the south.
• Due to its unique sand bar and location parallel to the Bay of Bengal, Pulicat Lake is a lagoon unto itself.
• The lake and the Bay of Bengal are divided by Sriharikota, which is also known as India’s rocket launch pad and the location of the Satish Dhawan Space Centre.
• The livelihood of the residents of the 30 villages that border the lake and 16 island communities within the sanctuary is derived from the lake.
• Many migratory species, such as gulls, terns, plovers, shanks, curlews, and storks, spend the winter at Pulicat Lake Bird Sanctuary.
• Numerous bird species, including flamingos, pelicans, storks, herons, and ducks, call it home.

Consider the following statements: 2017

1. In India, the Himalayas are spread over five States only.
2. Western Ghats are spread over five States only.
3. Pulicat Lake is spread over two States only.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 2 and 3 only

(d) 1 and 3 only

Intergovernmental Negotiating Committee (INC-4)

• Ottawa, Canada is hosting the Intergovernmental Negotiating Committee’s (INC-4) fourth session.
• By November of this year, a global deal on plastic pollution is expected to be finalized.

What is the Intergovernmental Negotiating Committee (INC)?

• The United Nations Environment Assembly (UNEA) Resolution 5/14 has authorized the INC committee to create a legally enforceable international instrument to prevent plastic pollution by 2025.
• It started operating at Punta del Este, Uruguay (INC-1) in November 2022.
• The second summit (INC-2) was held in Paris, France, between May and June of 2023.
• The December 2023 INC-3 meeting was held in Nairobi.
• It is anticipated that INC would finish its work by the end of 2024.

Important Takeaways from INC-4:

• The goal is to reduce the amount of plastic used for unneeded purposes while preserving its use for essential purposes like renewable energy.

Future Prospects:

• INC-5, which is scheduled for Busan, South Korea, is intended to be the culmination of everything.
• Subsequently, heads of state and government will sign the contract.

With reference to ‘Global Environment Facility’, which of the following statements is/are correct? 2014

(a) It serves as financial mechanism for ‘Convention on Biological Diversity’ and ‘United Nations Framework Convention on Climate Change’

(b) It undertakes scientific research on environmental issues at global level

(c) It is an agency under OECD to facilitate the transfer of technology and funds to underdeveloped countries with specific aim to protect their environment.

(d) Both A and B