1) UPI Payments: Empowering Users, Challenging Banks: The rapid rise in United Payments Interface (UPI) transactions in India has led to the introduction of various daily limits by banks and apps, creating a complex landscape of limitations in terms of value and volume.
Effects of these Trends for Users and Banks:
- Positive Impacts:
- Convenience and Efficiency;
- Financial Inclusion;
- Reduced Cash Dependency;
- Enhanced Transparency;
- Boost to Digital Economy.
- Negative Impacts for users:
- UPI as an Alternative to Petty Cash: Consumers are increasingly using UPI for smaller transactions, replacing petty cash. The declining value per transaction over time reflects this trend.
- Limited Transaction Flexibility: The complex web of limitations set by different apps and banks on UPI transactions creates confusion and restricts users’ flexibility in terms of transaction volume and value.
- Increased Transaction Failures.
- Negative Impacts for banks:
- Infrastructure Challenges for Banks.
- Security and Fraud Prevention: With the rise in UPI transactions, the risk of cyber threats and fraudulent activities also increases.
2) Face Authentication for PM-Kisan Scheme: Recently, the Ministry of Agriculture & Farmers Welfare, Government of India has rolled out Face Authentication Feature in the PM-Kisan app to enhance the efficiency and accessibility of welfare schemes.
- Under the scheme, the Centre transfers an amount of Rs 6,000per year, in three equal installments, directly into the bank accounts of all landholding farmers irrespective of the size of their land holdings.
- It is a Central Sector Scheme with 100% funding from the Government of India.
- The entire responsibility of identification of beneficiary farmer families rests with the State / UT Governments.
- Objective: To supplement the financial needs of the Small and Marginal Farmers in procuring various inputs to ensure proper crop health and appropriate yields, commensurate with the anticipated farm income at the end of each crop cycle.
- The PM-KISAN Mobile App developed and designed by the National Informatics Centre in collaboration with the Ministry of Electronics and Information Technology has been launched.
- Over 11 crore farmers across the country have availed the PM-Kisan scheme, indicating its widespread reach and impact.
3) Manipur Invokes RBI’s Riot Provisions: Recently, the Manipur government has invoked the Riot Provision of the Reserve Bank of India (RBI) in response to a Grave Situation in the State marked by riots and violence.
- The Provisions are as per Chapter No. 7 of the “Reserve Bank of India (Relief Measures by Banks in Areas Affected by Natural Calamities) Directions, 2018.” The Provisions specifically addresses “Riots and Disturbances”.
- The provisions of these Directions shall apply to every Scheduled Commercial Bank (including Small Finance Banks (SFBs) and excluding Regional Rural Banks (RRBs) licensed to operate in India by RBI.
- In the case of crop loans, if the loss ranges between 33% and 50%,borrowers are eligible for a maximum repayment period of two years. If the crop loss exceeds 50%, the repayment period can be extended up to a maximum of five years.
- If the crop is damaged without harm to productive assets, banks can reschedule installment payments for the affected year and extend the loan period by one year.
- Banks will evaluate borrowers’ credit needs, follow loan approval procedures, and may offer collateral-free consumption loans up to Rs 10,000 to existing borrowers without personal guarantees, even if the value of assets is lower than the loan amount.
- For the people who have lost their documents due to the calamity of riots, the banks need to open new accounts for such people.
