RBI announces slew of measures to push digital payments in India - Pragnya IAS Academy - News Analysis.

RBI announces slew of measures to push digital payments in India.

• The banking regulator mandated banks not to charge savings bank account customers for online transactions via NEFT from January 2020
• More measures to push digital payments comes exactly three years after the note ban announced by PM Modi in November 2016
The Reserve Bank of India (RBI) on Friday announced fresh steps to push digital payments in India, including removing charges on online fund transfer system National Electronic Funds Transfer (NEFT), introducing interoperable system such that FASTags can be used to pay parking fees, fuel, among other measures.

The banking regulator mandated banks not to charge savings bank account customers for online transactions via NEFT from January 2020, in a attempt to make transactions cheaper.
More measures to push digital payments comes exactly three years after the National Democratic Alliance (NDA) government announced the massive currency culling exercise, demonetizing 86% of the currency in circulation on 8 November, 2016 in its fight against black money, terror financing and counterfeit currency.
Even though cash transactions continue to dominate, demonetization, coupled with steps taken by the government and the banking regulator has nurtured the habit of people spending through various digital platforms.
The banking regulator also proposed setting up of acceptance development fund to increase, towards setting up of payment infrastructure with effect from 1 January, 2020.
It also proposed to permit all authorised payment systems and instruments as wallets, cards and instant payments system UPI to link FASTags-- an electronic toll connection device fixed on the windshield of a vehicle to enable drivers to zip through toll plazas without having to stop. The move will facilitate the use of FASTags to pay for parking and fuel, making the system interoperable.
“Enable processing of e-mandates for transactions through UPI. Constitute a committee to assess the need for plurality of QR (quick response) codes and merits of their co-existence or convergence from both systemic and consumer viewpoints," RBI said. While the details are awaited experts said this may enable common QR code through integration of various payment options.
“RBI has offered incentives which would increase both the breadth by getting new players in tolls and transit space as well depth of the ecosystem by enabling new use cases like e-mandates. The initiatives are in the regulatory continuum to drive interoperability and adoption" Vivek Belgavi, Partner at PwC India said.
According to RBI, digital payments constituted a 96% of total non-cash retail payments between October 2018 and September 2019. During the same period, the NEFT and instant payments system Unified Payments Interface (UPI) clocked 252 crore and 874 crore transactions, with year-on-year growth of 20% and 263%, respectively. (Source: Livemint)


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RBI announces slew of measures to push digital payments in India.

India Post Payments Bank replaces ATM/debit cards with QR cards. How to use them - Pragnya IAS Academy - News Analysis.

India Post Payments Bank replaces ATM/debit cards with QR cards. How to use them.

The QR card you receive from India Post Payments Bank (IPPB) cannot be used in ATMs or as a debit card. However, you will still be able to withdraw cash as well as make transactions. Here’s how.

India Post Payments Bank (IPPB), which was launched on Saturday by Prime Minister Narendra Modi, does away with ATM cards and debit cards for both cash and cashless transactions. Instead, IPPB will issue new QR (Quick-Response) cards which work on biometric authentication and not on passwords or PINs.
At present, IPPB offers 3 types of savings accounts—regular, digital and basic—besides a current account. Although each one of them has different features yet none offers an ATM or debit card.
IPPB has already launched its app, which can be used for mobile banking and even for opening an Aadhaar-based account without visiting a post office. However, the mobile app is expected to be fully functional in the next few days.
What is a QR card
A QR card contains a QR code or barcode that is used to identify account holders. No two QR codes are the same. The code can be deciphered to identify the IPPB account holder through a smartphone or micro-ATMs, a hand-held device which will be used by postmen soon.
Once the customer identification is done using the QR code, the postman or banking correspondent will conduct another verification using biometric data. Upon completion of the two-step verification process, the customer is paid in cash which is carried by the postman. The doorstep banking service, which will be particularly handy for those in rural areas, comes at a cost of Rs 25 per cash transaction.
Besides this, you can also use the QR card for money transfer, bill payment and cashless shopping.
Where to use the QR card
QR card transactions can be done through postmen, post offices or Grameen Dak Sevaks (GDS). IPPB is also bringing unorganised retail, including small merchants and kirana stores, on board. Once the system is in place, you can pay even at small stores using your QR card.
What are the advantages of having a QR card
Anyone have a physical copy of your ATM card and PIN will be able to withdraw cash from any ATM. Not so with a QR card. It doesn’t work at ATMs at all and even at post offices or with postmen and Grameen Dak Sevaks (GDS) you need biometrics. Therefore, there is an added layer of security for the money kept in your bank account.
It also saves you from the hassles of remembering PINs.
You don’t even need to remember your IPPB account number to use this QR card. (Source: Livemint)


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India Post Payments Bank replaces ATM/debit cards with QR cards. How to use them.

Government Plans to open 650 branches of India Post Payments Bank soon - Pragnya IAS Academy - News Analysis.

Government Plans to open 650 branches of India Post Payments Bank soon.

Prime Minister will launch the India Post Payments Bank. The date of launch would be decided in a day or two, says Communication Minister Manoj Sinha.

To increase banking connectivity, especially in rural areas, the government plans to open branches of India Post Payments Bank (IPPB) all across the country. The information was given by Communication Minister Manoj Sinha during the Question Hour in the Lok Sabha on Wednesday. "Prime Minister will launch the India Post Payments Bank. The date of launch would be decided in a day or two," he said.

The government will open over 650 branches of the payments bank, which will have access points across 1.5 lakh locations across India. Most of these access points -- over 1.3 lakh -- will be opened in rural areas. Considering a rising popularity of private payments banks in urban areas of India, the government has decided to expand the network of government-owned small payments banks, with a special focus on rural areas.
The initiative will certainly help in bringing untouched rural areas under the banking system, say industry experts.
Meanwhile, Sinha also said the government would soon open a Passport Seva Kendra in each Lok Sabha Constituency or within 50km radius of the same. As of now, there are total 251 Passport Seva Kendras in India.
What is a payments bank.
Payments banks perform almost all banking operations like other banking institutions but don't engage in any credit-providing service and function on a rather smaller business scale compared with other banks. They accept deposits up to Rs 1 lakh per account. There are several payments banks in India, including Paytm Payments Bank, Airtel Payments Bank, Idea Payments Bank, etc. The standard interest rate for commercial banks ranges from 3.5-6 per cent.
The Reserve Bank of India (RBI) recently gave its nod to India Post Payments Bank (IPPB) to commence operations in January 2017. The idea of setting up payments bank came to the RBI in November, 2014. The objective to set up payment banks was to promote financial inclusion (banking the unbanked areas). However, they can offer several other facilities that are already provided by full-fledged banks, which shall be of immense help in taking banking services across the country, especially in remote areas.


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Government Plans to open 650 branches of India Post Payments Bank soon.

Payment of Gratuity (Amendment) Act, 2018 brought in force on 29th March, 2018 - Pragnya IAS Academy - News Analysis.

Payment of Gratuity (Amendment) Act, 2018 brought in force on 29th March, 2018.

Decision: The Payment of Gratuity (Amendment) Bill, 2018 has been passed by Lok Sabha on 15th March, 2018 and by the Rajya Sabha on 22nd March, 2018, has been brought in force on 29th March, 2018.

Background: The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workman after retirement, whether retirement is a result of superannuation, or physical disablement or impairment of vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.
2. The present upper ceiling on gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with implementation of 7th Central Pay Commission, in case of Government servants, the ceiling has been raised toRs. 20 Lakhs.
3. Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, this Government decided that the entitlement of gratuity should also be revised in respect of employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for amendment to Payment of Gratuity Act, 1972 to increase the maximum limit of gratuity to such amount as may be notified by the Central Government from time to time. Now, the Government has issued the notification specifying the maximum limit to Rs. 20 Lakh.
4. In addition, the Bill also envisages to amend the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from ‘twelve weeks’ to ‘such period as may be notified by the Central Government from time to time’. This period has also been notified as twenty six weeks.
Major Impact: The Bill as passed by both the Houses of Parliament, andassented to by the Hon’ble President and notified by the Government. This will ensure harmony amongst employees in the private sector and in Public Sector Undertakings/ Autonomous Organizations under Government who are not covered under CCS (Pension) Rules. These employees will be entitled to receive higher amount of gratuity at par with their counterparts in Government sector. (Source: PIB)


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Payment of Gratuity (Amendment) Act, 2018 brought in force on 29th March, 2018.