• Non-compliance: It is found that 50% of the companies were unable to spend the mandated amount on CSR

and in the past five years after the act was enforced, 70% of the companies still do not have a strategy to
implement CSR activities.
• Cheating and favoured donations: It is found out that companies made donations to charitable trusts, which
are well known and then received them back after deduction of minor commissions.
Way forward
• Community and employee participation: Improving community relations, involving employees in CSR can help
motivate them and encourage their personal and professional development by inculcating social and ethical
values.
• Collaboration for efficiency: Facilitating collaboration between NGOs, agencies involved in environmental and
social work will enable better utilization of CSR funds.
• Evaluation and monitoring: CSR activities and projects needs to be monitored periodically to prevent
fraudulent activities and complete project within stipulated time.
• Fair and balanced expenditure: Encouraging corporates to spend in neglected areas such as aspirational
districts and North east region to have regional parity in socio-economic development.
• Relaxation and incentives: Government should further provide relaxation and incentives in corporate tax to
corporates complying with CSR regulations.

3.4. DIGITAL PAYMENT ECOSYSTEM

Why in news? Need for directions
Reserve Bank of India (Digital Payment Security • To tackle burgeoning instances of outages, frauds and
Controls) directions, 2021 has been published to cyber breaches in digital payments ecosystem.
strengthen India's digital payments architecture. • Improve security, control and compliance among banks,
gateways, wallets and other non-banking entities.
About Reserve Bank of India (Digital Payment • Protect the confidentiality of customer data and integrity
Security Controls) directions, 2021 of data and processes associated with the digital product/
services offered.
• Directions are issued to set up a robust • Efficient and effective dispute resolution mechanism and
governance structure and implement handling of customer grievance.
common minimum standards of security • Helps to achieve its goal of a less-cash and cash less
controls for digital payment products and economy.
services in following way.
• Applicability: Applicable to Regulated Entities
(REs) scheduled commercial banks, small finance banks, payment banks and credit card-issuing NBFCs.
o It is also applicable to third-party payment applications, payment operators and gateways.
• Under the directions
o REs shall formulate a policy with approval of Board for digital payment products and services.
o REs shall implement multi-tier application architecture, segregating application, database and
presentation layer in the digital
payment products and services,
by following ‘secure by design’
approach.
o REs shall have Fraud Risk
Management.
o A real time/ near-real time
reconciliation framework for all
digital payment transactions
between RE and all other
stakeholders.
o Customer Protection, Awareness
and Grievance Redressal
Mechanism.
o Internet banking, Mobile
payments application, Card payments security controls.
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