RBI's Regulation to Entities Facilitating Cross-Border Payments
Introduction
In the multifaceted world of international trade and finance, cross-border transactions constitute the heart of economic relationships that span the globe. The threads that intertwine forming the fabric of global commerce are ceaselessly dynamic and exhibit an intricate pattern of complexity especially when it comes to the regulated movement of capital. It's a domain where economies connect, where businesses engage in sublime commerce, and where technology and regulation intersect at critical juncture. These guidelines will play a critical role in the regulation of capital, fortification of financial integrity, and transparency of regulatory and cross-border payments. The key highlights of this regulation include strict pre-authorization for non-bank entities, mandating specific accounts for import and export PA-CBs and a transaction ceiling of 25,00,000 Rupees.
The Vigilance of RBI
The Reserve Bank of India (RBI), ever vigilant in its shepherding role over the nation's financial stability and integrity, has taken decisive strides to dispel the haze that once clouded this critical sector. With the issuance of a revelatory circular dated October 31, 2023, the RBI has unveiled a groundbreaking framework that redefines the terrain for these pivotal financial entities, aptly christened as Payment Aggregators – Cross Border (PA-CB). In deploying this comprehensive array of regulations, the RBI demonstrates a robust commitment to harmonizing and synchronizing the oversight of payments within the country's financial fabric, extending its meticulous regulatory weave from domestic Payment Aggregators (PAs) to the PA-CBs, a sector previously undistinguished in formal oversight.
The prescriptive measures announced by the RBI are nothing short of a regulatory beacon that cuts through the fog of uncertainty, illuminating a clear path forward for entities dedicated to facilitating cross-border payment transactions pertaining to the import and export of permissible goods and services in India through online modes. Inclusiveness is a hallmark of the RBI’s directive, encompassing a diverse cadre of financial actors, ranging from Authorized Dealer (AD) banks and conventional Payment Aggregators (PAs), to the emergent breed of PA-CBs actively engaged in processing these critical international payment transactions.
Key Aspects of Regulation
One of the most striking aspects of this new regulatory regime is the RBI's insistence on pre-authorization. All non-bank entities providing PA-CB services are impelled to apply to the apex bank for authorisation by April 30, 2024. This is far from a perfunctory gesture; it represents a profound departure from the bygone era when these entities functioned under a patchwork of provisional guidelines and ad-hoc circulars. Indeed, with this resolute move, the RBI signals its intention to embrace these entities within its direct regulatory gambit, an acknowledgement of the shifting tides and progressive intricacies characteristic of cross-border payments.
The tapestry of new rules is complex, setting forth an array of prerequisites for entities aspiring for authorization. For instance, non-bank PA-CBs are obliged to register with the Financial Intelligence Unit-India (FIU-IND) as a preliminary step before commencing the application process. Moreover, the financial benchmarks set are notably rigorous. Non-banks must boast a minimum net worth of ₹15 crores at the time of the application—a figure that escalates to a robust ₹25 crores by the fiscal deadline of March 31, 2026.
Way Forward
As if these requirements weren't indicative enough of the RBI’s penchant for detail and precision, the guidelines become yet more granular when addressing specific types of PA-CBs. Import-only PA-CBs are mandatorily obliged to maintain an Import Collection Account (ICA) with an AD Category-I scheduled commercial bank, while export-only PA-CBs are instructed to maintain an Export Collection Account (ECA), which can be maintained in Indian Rupees (INR) or any permissible foreign currency. The nuance here is palpable; payments for import transactions must be received in a meticulously managed escrow account of the PA, prior to being funneled into the ICA for smooth settlement with overseas merchants.
Conversely, export-only PA-CBs' proceeds from international sales must be swiftly credited to the relevant currency ECA. This meticulous accounting ensures that the flow of funds is both transparent and traceable, adhering to the utmost standards of financial probity.
Yet, perhaps the most emphatic of the RBI's pronouncements is the establishment of a transaction ceiling. PA-CBs have their per-transaction limit capped at ₹25,00,000 for each unit of goods or services exchanged. This calculated move is transparent in its objective to mitigate risk—a crucial aspect when one considers the potential implications of these transactions on the country’s fiscal health and the integrity of its financial systems.
It is no exaggeration to declare that with these guidelines, the RBI is effectuating a seismic shift in the regulation of cross-border payment transactions. There's a fundamental transformation taking place—a metamorphosis—from a loosely defined existence of PA-CBs to one of distinct clarity, under the direct and unswerving supervisory gaze of the regulator. The compliance burden, indeed, has become heavier, yet the return is a compass that points decisively towards secure harbours.
As we embark upon the fresh horizons that these rules bring into view, it is imperative to acknowledge that the RBI's regulatory innovations represent far more than a mere codification of dos and don'ts. They embody a visionary stride towards safeguarding and fortifying the architecture of international payments, a critical component of India's burgeoning presence on the world economic stage.
Conclusion
The journey ahead, as we navigate these newly charted waters with the RBI's guidelines as our steadfast North Star, will no doubt be replete with challenges, adaptations and learning curves for the array of operational entities. But it is with confidence we can say, the path is set; the map is clear. The complex labyrinth of cross-border financial transactions is now demystified, and the RBI's clarion call beckons us towards a future marked by regulation, security, and above all else, reliability in the cosmopolitan tapestry of global trade. RBI’s guidelines provide a comprehensive framework for standardizing cross-border financial transactions in India. This decision is a monumental step towards maintaining cyber peace in cyberspace.
References:
- https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12561&Mode=0
- https://www2.deloitte.com/in/en/pages/tax/articles/tax-alert-Regulation-of-payment-aggregator-cross-border-pa-cb.html
- https://www.jsalaw.com/newsletters-and-updates/rbis-new-guidelines-to-govern-payment-aggregators-in-cross-border-transactions/
Related Blogs
EXECUTIVE SUMMARY:
A viral video is surfacing claiming to capture an aerial view of Mount Kailash that has breathtaking scenery apparently providing a rare real-life shot of Tibet's sacred mountain. Its authenticity was investigated, and authenticity versus digitally manipulative features were analyzed.
CLAIMS:
The viral video claims to reveal the real aerial shot of Mount Kailash, as if exposing us to the natural beauty of such a hallowed mountain. The video was circulated widely in social media, with users crediting it to be the actual footage of Mount Kailash.
FACTS:
The viral video that was circulated through social media was not real footage of Mount Kailash. The reverse image search revealed that it is an AI-generated video created by Sonam and Namgyal, two Tibet based graphic artists on Midjourney. The advanced digital techniques used helped to provide a realistic lifelike scene in the video.
No media or geographical source has reported or published the video as authentic footage of Mount Kailash. Besides, several visual aspects, including lighting and environmental features, indicate that it is computer-generated.
For further verification, we used Hive Moderation, a deep fake detection tool to conclude whether the video is AI-Generated or Real. It was found to be AI generated.
CONCLUSION:
The viral video claiming to show an aerial view of Mount Kailash is an AI-manipulated creation, not authentic footage of the sacred mountain. This incident highlights the growing influence of AI and CGI in creating realistic but misleading content, emphasizing the need for viewers to verify such visuals through trusted sources before sharing.
- Claim: Digitally Morphed Video of Mt. Kailash, Showcasing Stunning White Clouds
- Claimed On: X (Formerly Known As Twitter), Instagram
- Fact Check: AI-Generated (Checked using Hive Moderation).
Introduction
As the calendar pages turn inexorably towards 2024, a question looms large on the horizon of our collective consciousness: Are we cyber-resilient? This is not a rhetorical flourish but a pragmatic inquiry, as the digital landscape we navigate is fraught with cyberattacks and disruptions that threaten to capsize our virtual vessels.
What, then, is Cyber Resilience? It is the capacity to prepare for, respond to, and recover from these cyber squalls. Picture, if you will, a venerable oak amid a howling gale. The roots, those unseen sinews, delve deep into the earth, anchoring the tree – this is preparation. The robust trunk and flexible branches, swaying yet unbroken, embody response. And the new growth that follows the storm's rage is recovery. Cyber resilience is the digital echo of this natural strength and flexibility.
The Need for Resilience
Why, you might ask, is Cyber Resilience of such paramount importance as we approach 2024? The answer lies in the stark reality of our times:
- A staggering half of businesses have been breached by cyberattacks in the past three years.
- The financial haemorrhage from these incursions is projected to exceed a mind-numbing $10 trillion by the end of 2024.
- The relentless march of technology has not only brought innovation but also escalated the arms race against cyber threats.
- Cyber resilience transcends mere cybersecurity; it is a holistic approach that weaves recovery and continuity into the fabric of digital defenses.
- The adaptability of organisations, often through measures such as remote working protocols, is a testament to the evolving strategies of cyber resilience.
- The advent of AI and Machine Learning heralds a new era of automated cyber defense, necessitating an integrated framework that marries security with continuity protocols.
- Societal awareness, particularly of social engineering tactics, and maintaining public relations during crises are now recognised as critical elements of resilience strategies.
- Cyber threats have evolved in sophistication, paralleling the intense competition to develop new AI-driven solutions.
- As we gaze towards the future, cyber resilience is expected to be a prominent trend in both business and consumer technology sectors throughout 2024.
The Virtues
The benefits of cyber resilience for organisations are manifold, offering a bulwark against the digital onslaught:
- A reduction in the risk of data breaches, safeguarding sensitive information and customer data.
- Business continuity, ensuring operations persist with minimal disruption.
- Protection of reputation, as companies that demonstrate effective cyber resilience engender trust.
- Compliance with data protection and privacy regulations, thus avoiding fines and legal entanglements.
- Financial stability, as the costs associated with breaches can be mitigated or even prevented.
- Enhanced customer trust, as clients feel more secure with companies that take cybersecurity seriously.
- A competitive advantage in a market rife with cyber threats.
- Innovation and agility, as cyber-resilient companies can pivot and adapt without fear of digital disruptions.
- Employee confidence, leading to improved morale and productivity.
- Long-term savings by sidestepping the expenses of frequent or major cyber incidents.
As the year wanes, it is a propitious moment to evaluate your organisation's cyber resilience. In this edition, we will guide you through the labyrinth of cyber investment buy-in, tailored discussions with stakeholders, and the quintessential security tools for your 2024 cybersecurity strategy.
How to be more Resilient
Cyber resilience is more than a shield; it is the preparedness to withstand and recover from a cyber onslaught. Let us explore the key steps to fortify your digital defenses:
- Know your risks: Map the terrain where you are most vulnerable, identify the treasures that could be plundered, and fortify accordingly.
- Get the technology right: Invest in solutions that not only detect threats with alacrity but also facilitate rapid recovery, all the while staying one step ahead of the cyber brigands.
- Involve your people: Embed cybersecurity awareness into the fabric of every role. Train your crew in the art of recognising and repelling digital dangers.
- Test your strategies: Regularly simulate incidents to stress-test your policies and procedures, honing your ability to contain and neutralise threats.
- Plan for the worst: Develop a playbook so that everyone knows their part in the grand scheme of damage control and communication in the event of a breach.
- Continually review: The digital seas are ever-changing; adjust your sails accordingly. Cyber resilience is not a one-time endeavour but a perpetual commitment.
Conclusion
As we stand on the precipice of 2024, let us not be daunted by the digital storms that rage on the horizon. Instead, let us embrace the imperative of cyber resilience, for it is our steadfast companion in navigating the treacherous waters of the cyber world. Civil Society Organizations such as ‘CyberPeace Foundation’ playing a crucial role in promoting cyber resilience by bridging the gap between the public and cybersecurity complexities, conducting awareness campaigns, and advocating for robust policies to safeguard collective digital interests. Their active role is imperative in fostering a culture of cyber hygiene and vigilance.
References
- https://www.loginradius.com/blog/identity/cybersecurity-trends-2024/
- https://ciso.economictimes.indiatimes.com/news/ciso-strategies/cisos-guide-to-2024-top-10-cybersecurity-trends/106293196
Introduction
WhatsApp has become the new platform for scams, and the number of cases of WhatsApp scams is increasing daily. Just like that, a new WhatsApp scam has been started, and many WhatsApp users in India have reported receiving missed calls from unknown international numbers. Worse, one does not even have to answer the call to be scammed. A missed call is sufficient to be scammed.
Millions of populations switch from normal SMS to WhatsApp, usually, people used to get fake messages and marketing messages, but the trend of scamming has been evolving now. Most people get calls from different countries, and they are concerned about how these scammers got the numbers. WhatsApp works through VoIP networks, so no extra charges from any country exist. And about 500 million WhatsApp users are getting these scam calls, the calls are mainly on job-scams of promising part-time employment and opportunities. These types of job scam calls have been started reporting in 2023.
People reporting missed calls from countries like Ethiopia (+251), Malaysia (+60), Indonesia (+62), Vietnam (+84), etc.
The agenda of these calls are still unclear. Still, in some cases, the scammers ask for confidential information from WhatsApp users, like bank details, so the users must not reveal their personal information. Also, it is important to note that if you get any calls from a particular country, it necessarily does not mean it is from that country. Various agencies sell international numbers for WhatsApp calls.
Why has WhatsApp become a hub scam?
The generation has evolved and dumped the old SMS into WhatsApp. From school to college and offices, people use WhatsApp for their official work, as it is very easy and user-friendly, so people avoid safety measures. Generally, users need to understand the consequences of technology and use it with safeguards and awareness. Many people lose money and become victims of scams on WhatsApp as they share their confidential information. And the worse is that one does not even have to answer the call to be scammed. A missed call is sufficient to be scammed.
Before these international calls scam, the user received a call from the scam that they were from KBC, and the user won something. Then sought confidential information by the excuse that they would transfer the money to the user, and because of that user got scammed by the scammers. These scams have risen rapidly lately.
Safeguards users can use against these scam calls
WhatsApp responds to complaints regarding international calls to “block and report.”
If you have already received such calls, the best thing you can do is report and block them right away. As a result, the same number does not return to your phone, and numerous identical reports may persuade WhatsApp to delete the number entirely.
WhatsApp is also working on an update allowing users to block calls from unknown numbers on the service.
Users must modify their phone’s and app’s fundamental privacy settings to protect themselves from data breaches. The calls are directed toward app users who are actively using the app. However, by modifying the account’s appearance, a user can lessen the likelihood of being added to the scammers’ attack lists.
Limit Privacy
Begin by modifying WhatsApp’s ‘who can see’ settings. If your profile photo, last seen, and online status are visible to anybody, restrict them to persons on your contact list only. Change the About and Groups options as well.
Turn on two-factor authentication
Enabling two-factor authentication on WhatsApp adds more security to your data. In addition, the app also supports biometric protection in case of theft or loss.
Active Reporting
The users should report as soon as they see something odd or suspicious activity.
A typical question that users have is, ‘Where do the scammers acquire my phone number from?’
The answer is a little more complicated than we thought. Your data is retained on the company database from the time you sign up on a website or reveal your phone number at a store in order to take advantage of promotional offers and promotions. Due to a lack of technological infrastructure and legislation to protect personal data, a scammer can simply obtain your information.
According to Palo Alto research, India is the second most vulnerable country in the APAC region in terms of cyberattacks and data breaches. A data protection law is essential in the face of increasing calls and data breaches.
The Digital Personal Data Protection bill is set to be introduced in the parliament’s monsoon session. The bill has the potential to protect data, which will help to eliminate scams.
Conclusion
Several people had tweeted on tweeter about receiving fake calls on WhatsApp from international numbers more than once. WhatsApp encrypts calls and messages, making it difficult to track the person, and it appears that hackers are taking advantage of this to swindle customers. If you receive a WhatsApp call from any of the above ISD codes, we strongly advise you not to answer it and to block the number so the bad actors do not call you again. Report & block immediately that’s what WhatsApp has been responding to the complainants.
