New UPI rules for bank-to-bank payments

GS Paper - 3 (Economy)

National Payments Corporation of India (NPCI), the retail payments and settlement body, clarified that there are no charges for bank account-to-bank account-based UPI payments, which are the “normal” UPI payments for most people.

What has changed, then?

1. NPCI said that an interchange charge has been introduced for PPI (prepaid payment instrument) merchant transactions — but customers will not be charged.
2. The clarification came after media reports suggested that NPCI has issued a circular saying that there will be an interchange fee of 1.1 per cent on UPI transactions made through PPI instruments like wallets or cards.
3. This charge will be applicable for transactions above Rs 2,000, as per the reports.

What are PPI transactions?

1. Prepaid payment instruments (PPI) include online wallets (like Paytm Wallet, Amazon Pay Wallet, PhonePe Wallet, etc.) and preloaded gift cards.
2. A PPI payment done via UPI refers to a transaction done via such a wallet through a UPI QR code.

What does the latest NPCI circular say?

1. In a statement issued on 29 March 2023, NPCI said that as per recent regulatory guidelines, PPI wallets have been permitted to be part of the interoperable UPI ecosystem.
2. The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payments (i.e. normal UPI payments).

Most UPI transactions are not affected

1. Generally, the preferred method of UPI transactions is linking the bank account in any UPI-enabled app for making payments, which makes up for over 99.9 per cent of total UPI transactions.
2. These bank account-to-account transactions continue to remain free for customers and merchants.

Amendments to competition law approved

GS Paper - 2 (Polity)

The Lok Sabha passed the Competition Amendment) Bill, 2022, more than seven months after it was introduced in the Lower House in August last year. The bill provides for the Competition Commission of India (CCI) to impose penalties on entities based on their global turnover instead of the current practice of considering only relevant market turnover.

More about the Bill

1. The corporate affairs ministry has made certain amendments to the original bill.
2. One of the changes is with respect to the turnover that will be considered for the imposition of penalty in case of competition law violations.
3. Turnover means global turnover derived from all products and services by a person or an enterprise, as per the amendments.
4. Another amendment is that the CCI has to form a prima-facie opinion about a filing related to a combination within 30 days of receiving the filing.
5. Currently, the regulator can form a prima-facie opinion within 30 days working days of receiving a combination filing.
6. In competition law parlance, combinations refer to mergers and acquisitions, and deals beyond a certain threshold require the approval of CCI.
7. The Competition (Amendment) Bill, 2022, was introduced in Parliament on 5 August last year. Then, it was referred to the Parliamentary Standing Committee on Finance chaired by Jayant Sinha.
8. The panel tabled its report in Parliament on 13 December. It will be the first time since the enforcement of the Competition Act in 2009 that amendments will be made to the Act.

Flashback

1. The Act was brought in 2002 and subsequently, it underwent amendments in 2007 and 2009.
2. In May 2009, the anti-trust provisions of the law came into force and two years later in May 2011, CCI started screening mergers and acquisitions.

Army to Get Satellite

GS Paper - 3 (Security)

The Ministry of Defence (MoD) has signed three contracts worth ₹5,400 crore two with Bharat Electronics Limited (BEL) worth ₹2,400 crore for procurement of Automated Air Defence Control and Reporting System ‘Project Akashteer’for the Army and Sarang Electronic Support Measure (ESM) systems for the Navy.

More about News

• Another ₹2,963 crore contract is with NewSpace India Limited (NSIL), a Central Public Sector Enterpriseunder the Department of Space, for an advanced communication satellite, GSAT 7B, for the Army.
• “The geostationary satellite, being a first-of-its-kind in the five-tonne category, will be developed indigenously by the Indian Space Research Organisation (ISRO)”.
• The satellite will considerably enhance the communication capability of the Indian Army by providing mission critical beyond line of sight communication to troops and formations as well as weapon and airborne platforms.

Project Akashteer

• The contract for ‘Project Akashteer’ worth ₹1,982 crore will empower the Army’s Air Defence units with an indigenous, state-of-the-art capability, to effectively operate in an integrated manner. 
• Akashteer will enable monitoring of low level airspace over the battle areas of the Indian Army and effectively control the ground based air defence weapon systems.
• The ₹412-crore contract for Sarang ESM systems along with associated engineering support package from BEL, Hyderabad will generate an employment of approximately two lakh man-days over a period of three years.
• ‘Sarang’ is an advanced ESM system for helicopters of the Navy, designed and developed indigenously by the Defence Electronics Research Laboratory, Hyderabad under the programme, Samudrika.