No nod to WhatsApp to go live on full scale UPI ops: RBI
The RBI has told the Supreme Court it has not granted permission to WhatsApp to go live for full scale operations on the Unified Payments Interface (UPI) payment system.
 
The central bank, in its counter-affidavit, said: "Reserve Bank had examined the said reports and the responses of the NPCI (National Payments Corporation of India) and was concerned that WhatsApp was storing some payment data elements outside India beyond the permitted timelines indicated in the circular and the Frequently Asked Questions on 'Storage of Payment System Data' issued by RBI on June 26, 2019."
 
"It is specifically denied that the RBI has granted permission to WhatsApp to go live for full scale operations on the Unified Payments Interface (UPI) payment system."
 
The RBI also denied that its circular on April 6, 2018 on "Storage of Payment System Data" has been toned down by FAQs issued on June 26, 2019. "It is submitted that Payment System Operators (PSOs) had sought clarification on certain implementation issues, from time to time, from Reserve Bank and the FAQs are intended to provide clarity on those issues to facilitate and ensure expeditious compliance by all PSOs," said the affidavit.
 
The RBI acknowledged that the NPCI had communicated to it the System Audit Report and the Post Change Review Report sent to it by WhatsApp, which touched upon the details concerning storage of payment system data. The RBI said that accordingly, by letter dated November 1, 2019, the NPCI was advised to ensure that the payment data elements, as referred to therein, are not stored by WhatsApp outside India beyond permitted timelines.
 
In addition, the NPCI was advised to ensure that WhatsApp does not store any of the payment transaction data elements in hashed/de-identified/encrypted form in its systems outside India. "The NPCI was also advised not to permit WhatsApp to go live for full scale operations on the UPI payment system, till the time they are fully compliant," said the RBI.
 
Subsequently, the NPCI had, through its letter dated January 7, said that they had received a letter from WhatsApp agreeing to complete all the pending issues by May 31, and requesting permission to go live.
 
The NPCI had then requested RBI's approval to grant final 'go-live' to WhatsApp on UPI, subject "to (a) the third-party audit report confirming closure of the committed 2 items, and (b) acceptable VA/config reports from third party auditor".
 
WhatsApp had already informed the top court that it would not roll out its payment service without full compliance with the norms. 
 
The RBI's response came on an application filed by the Centre for Accountability and Systemic Change, through advocate Virag Gupta, seeking a complete stoppage of the trials being conducted by WhatsApp Pay, alleging that the company has continued beta testing on its payments system on 1 million users in violation of data localisation norms in India.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Will SEBI Consider In-House Calibre for ED Post This Time?
    An advertisement by the Securities and Exchange Board of India (SEBI) seeking applications from for the post of two new executive directors (EDs) have stirred up discontent and raised issues about the practice of bringing in outsiders, either or contract or on deputation from other government services. 
     
    At inception, SEBI had no option but to bring in officials on deputation from various government cadres, since it needed persons with experience in investigation, enforcement, law and administration. Since SEBI quickly grew into a powerful regulator and offered better pay and perks, it because an attractive posting and career move for officers in government investigation services and for lawyers. Over the past decade, SEBI chairmen had begun to prefer EDs on contract, since they owed allegiance and loyalty only to the chairman. This raised a lot of concerns, especially, when it spliced to the legal departments. 
     
     
    Indeed, SEBI' employee service regulations also provide for the appointment of external candidates, but only when no suitable internal candidates are available. The advertisement suggests that SEBI is again looking for outside talent. 
    There are 10 posts of ED in SEBI, including one for full time chief vigilance officer (CVO). Over the years, sustained efforts by the employee association has brought some balance and ensured a few internal promotions to the post of ED as well as Whole Time Members (WTMs). 
     
    In a letter to SEBI chairman, the SEBI Employees Association (SEA), says, "While specialisation has been recognised till the level of chief general manager (CGM) in SEBI, unfortunately, at ED level, the regulations do not formally recognise this specialisation, in terms of qualifications or stream-wise specialisation. This, along with failure to recognise internal experience and expertise, could potentially lead to less than appropriate appointments."
     
    The Schedule to Regulation 6(4)(b) restricts number of EDs to be appointed internally at 75%. This means, out of the 10, seven would be selected from SEBI's internal employees while three, including the CVO should be hired from outside. Earlier, this was 50:50, but current SEBI chairman Ajay Tyagi, to his credit, has ensured that ratio of internal to external candidates is 75:25. 
     
    However, at present, there are three ED in SEBI, who are outsiders. Out of these three outsiders, two are on deputation, while one is appointed on a contract basis. Those on deputation, include one from the income tax (I-T) department and the other, who is the CVO, belongs to Indian Ordinance Factory Services (IOFS). Terms for both these posts of ED are ending in October and November this year.
     
    The EDs in SEBI at present are S Ravindran, Nagendraa Parakh, Amarjeet Singh, Anand R Baiwar, VS Sundaresan, SV Murali Dhar Rao, Sujit Prasad, and G Babita Rayudu. Arti Chhabra Srivastava from the IOFS cadre is the CVO of SEBI. 
     
    Interestingly, SEBI has a large pool of 30 CGMs, many of whom have spent almost 25 years with the market regulator.  According to the employee association, their chance of promotion to the post of ED is likely to be impacted by looking for outsiders, when the need is to increase posts in line with the increased size and role of the organisation.
     
    In the past there have also been instances of officials who came to SEBI on deputation as CGMs and were later elevated as ED. These include MS Ray, S Ramann and Gyan Bhushan, among others. 
     
    The SEA points out that in 2000, SEBI’s staff strength was 400 and there were seven posts of EDs. "Today, SEBI has a staff strength of around 900, and yet there are only nine EDs. Even the hierarchy above EDs has also expanded to four whole time members (TMs), when in 2000, there was not a single WTM in SEBI. This points to the need for rationalising the number of the ED post based on increase in positions both below and above ED level," it added.  
     
    "Before making any appointments of external candidates, availability of suitable internal candidates should be explored and only in case no internal candidates are found, should external appointments be considered," the SEBI Employees Association says, adding, "When considering internal candidates, the widest possible pool of eligible candidates should be considered so as to present the best possible internal options to the selection committee."
     
    SEA says it is not opposed to external candidates per se. "But when experience shows that adequate number of suitable and well qualified internal candidates are available, as against non-availability of suitable external candidates, it is high time that this experience and reality was recognized and due recognition given to the expertise, experience, knowledge and long service of internal candidates," it added.
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    SEBI Postpones Margin Rules Implementation by One Month
    Bringing some relief to stock brokers, the Securities and Exchange Board of India (SEBI) on Friday postponed the implementation of the new rules for upfront margin collection in the cash segment by a month.
     
    The norms will now come into effect from 1st September, instead of the previously scheduled 1st August.
     
    Further, the regulator has also eased the norms. It said in a circular that if stock brokers collect a minimum 20% upfront margin, then a penalty for short-collection or non-collection of margin shall not be applicable.
     
    "If TM/CM (trading member/clearing member) collects a minimum 20% upfront margin in lieu of VaR and ELM from the client, then penalty for short-collection/non-collection of margin shall not be applicable. However, it is reiterated that the Clearing Corporation shall continue to collect the upfront margin from the TM/CM based on VaR and ELM," it said.
     
    The penalty provision for short-collection or non-collection of upfront margin in the cash segment shall be implemented with effect from 1st September, the circular said.
     
    The trading community of late has raised concerns on the new guidelines, and the brokers said that there could be volume crunch apart from initial technical issues.
     
    In another decision, SEBI has permitted using digital signatures for authentication and certification of any filing and submission made to the stock exchanges till 31st December.
     
    The market regulator said that it has received a representation from the Institute of Company Secretaries of India (ICSI) stating that due to the COVID-19 pandemic and precautionary measures, company secretaries continue to face operational challenges in carrying out certification and authentication of documents in physical form.
     
    "The extension of SEBI to continue using digital signatures is definitely a way forward to ensure that we keep going with the aid of technology and facilitate a more hygienic and safe means of operation avoiding the need for physical interaction," Sonam Chandwani, managing partner at KS Legal & Associates, said.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    parimalshah1

    4 days ago

    And Karvy has also changed name to KFin tech.
    And regulator is not bothered!!!

    parimalshah1

    4 days ago

    This margin changes are another bird brained idea to benefit large brokers at the cost of investors. This is another attempt to fleece investors and benefit big brokers.
    Karvy has gone scot free after fraudulent pledging of investors shares of 2000 crore rupees misusing PoA.
    When investor gives margin upfront to sell shares or transfers shares to sell the risk increases for investor if broker defaults.
    There is higher amount of money or shares available with the broker to misuse for overnight call money. And small investor who wants to sell shares because of need - from where will he get money to pay upfront margin? He will need to borrow money.
    The cure is worse than the illness.
    Pathetic regulator.
    Hope some legal minds go for PIL on behalf of small investors.
    May be Moneylife could take a lead.

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