6 ECONOMY & PUBLIC AFFAIRS
>
IN BRIEF
RAW official involved in UPI credit line: NPCI may go
easy on interchange fee
Pannun murder plot: Report
A Research and Analysis Wing (RAW) official identified as Vikram
Yadav was involved in the assassination plot of Sikh separatist
leader Gurpatwant Singh Pannun in the US and the move was
approved by the then Indian spy agency chief Samant Goel,
according to an investigative media report published on Monday.
In an investigative report, The Washington Post said, “that India
would pursue lethal operations in North America has stunned
Could be kept at 1-1.2% in a bid to push adoption
AJINKYA KAWALE
Western security officials.” PTI Mumbai, 29 April
T
o increase the adoption
Pro-Khalistan slogans: MEA of credit on United
Payments Interface
summons Canadian envoy (UPI), National Payments
Corporation of India (NPCI) is
India on Monday summoned the Canadian deputy high looking at an interchange fee
commissioner, and lodged a protest over the raising of pro- for transactions lower than that
Khalistan slogans at a public event in Toronto in the presence of for a credit-card transaction.
Prime Minister Justin Trudeau. The Ministry of External Affairs (MEA) Sources in the know said
described the raising of the slogans at the event as “disturbing” these charges could be 1-1.2 per
and said it illustrated once again the political space that has been cent. Fintech participants con-
given in Canada to “separatism, extremism and violence”. PTI cur with the view that the inter-
change fee is expected to be
lower than that for a credit-card
FinMin studying HC order transaction. Credit-card trans-
actions generally have an inter-
banning PSBs from issuing LoCs change fee of 1.8-2 per cent.
“The interchange basically
The Finance Ministry is studying the recent Bombay High Court varies by the merchant catego-
order banning public sector banks from seeking the issuance of ry. I believe the interchange fee
look out circulars, or LOCs, against wilful defaulters, sources said. for credit lines on UPI should
Quashing the powers granted by the Union government to public be lower than that for credit
sector banks (PSBs) to act against wilful defaulters, the High Court cards, but how much lower is
said it is arbitrary and violative of a person's fundamental rights. still to be clarified,” said Mohit
The finance ministry is aware of the April 26 judgement and will Bedi, chief business officer
make a detailed assessment of the order, sources said. PTI (CBO) and co-founder, Kiwi, a
credit on UPI fintech.
At present, there is no inter-
SC questions Kejriwal over change fee defined by NPCI for
the credit line on UPI.
non-appearance before ED A credit line on UPI is a pre-
sanctioned loan from banks.
The Supreme Court on Monday questioned the non-appearance The uptake of credit lines
of Delhi Chief Minister Arvind Kejriwal before the ED, despite on UPI has not picked up
repeated summonses for recording of statements, because there is no clarity yet
and asked if he can challenge the arrest in a money on the interchange fee between
laundering case related to the excise policy scam banks and NPCI. Axis Bank,
on the ground of non-recording of his version. HDFC Bank, ICICI Bank,
A bench of justices Sanjiv Khanna and Dipankar Punjab National Bank, and
Datta asked why the Aam Aadmi Party leader did State Bank of India offer the
not move a bail application before the trial service, according to NPCI’s
court. PTI website. The facility is also live
on apps such as BHIM, Google
Pay, Paytm, and Payzapp.
Exporters seek extension of
interest equalisation norm
Exporters have urged the government to extend the interest
equalisation scheme (IES) that will expire on June 30, to offer a
Nearly 20 critical mineral blocks BSNL’s 4G user
to be put up for sale by June-end base hits 800K
lifeline to exporters grappling with high interest rates and faltering
exports. In a statement, Federation of Indian Export Organisations,
on Monday said that the scheme provides competitiveness to
Indian exports, particularly to MSMEs. “The bank rate in India is 6.5
per cent, whereas the bank rate in many of our Asian economies is NITIN KUMAR
around 3.5 per cent. With a higher spread, the credit cost here is New Delhi, 29 April
generally over 5 to 6 per cent as compared to such countries,” FIEO
President Ashwani Kumar said. SHREYA NANDI The Centre plans to auction
roughly 20 critical mineral
blocks in the upcoming round
SC stays CBI probe into Bengal
by the end of June, alongside
the first instalment of offshore
teacher recruitment case
mineral auctions within the
next three months, Mines
Secretary V L Kantha Rao said
The Supreme Court on Monday stayed the Calcutta High Court order on Monday.
directing the CBI to probe the role of West Bengal government “We are going to come up
officials in a teacher recruitment scam. It, however, refused to stay with the next auction at the end
the cancellation of the appointment of over 25,000 teachers and of June, so this auction process
non-teaching staff. A Bench of Chief Justice DY Chandrachud, will continue. Moreover, the
Justice JB Pardiwala and Justice Manoj Misra, however, refused to offshore minerals auction will
stay the high court order cancelling the appointments and said it also come within three
will hear the matter on May 6. PTI months,” Rao said while speak-
> FROM PAGE 1
States and China) have such
funds,” said a senior DoT offi-
cial, highlighting the signifi-
wise struggle to afford them.”
The fund aims to catalyse
growth for domestic telecom
Telecom... cance of the initiative. “What
we envision is a fund that will
companies, the official added.
The rapidly evolving land-
Initial funding for the TPF nationally acquire licences of scape of telecom technology,
may come from the Telecom
Technology Development
Fund, with additional support
critical patents in key technol-
ogy areas, for both software
and hardware, and make
where innovations have
increasingly shorter shelf
lives, also underscores the
from various other channels. them accessible to startups, need for such a fund.
“Many countries around SMEs, academia and home- Moreover, stringent and
the world (such as the United grown companies that other- changing standards, escalat-
ing R&D costs, and concerns
around security, privacy and
legal compliance further
> BS SUDOKU # 4269 accentuate the requirement
for indigenous solutions.
There is also the matter of
reducing overreliance on for-
eign technology.
Discussions with stake-
holders have outlined plans
to establish an independent
entity under the Universal
Service Obligation Fund, or
USOF, to implement the TPF.
(USOF aims to provide wide-
spread and non-discrimina-
tory access to affordable
quality telecom services.)
The proposed TPF aligns
with India's broader initia-
tives in technology develop-
ment, one of them being the
Indian Semiconductor
Mission. Under this mission,
the government has, for
instance, procured expensive
electronic design automa-
tion, or EDA, tools in bulk
from global players such as
SOLUTION TO #4268 Cadence and Synopsys, and
Very hard: made them available to over
140 universities and colleges
««««« for free.
Solution tomorrow
IBC...
HOW TO PLAY
As countries move towards
Fill in the grid so that the COP28 goals, businesses
every row, every could face transition risk,
column and every which could lead to insolven-
3x3 box contains cies. Climate events, such as
the digits 1 to 9 tsunami and wildfires, can
lead to companies filing for
bankruptcies.
CREDIT LINE
PLAYBOOK
n Launched in Sept last year,
adoption of credit line on
UPI slow since fee structure
undecided
n Average interchange fee
for credit card transactions
is around 1.8%
n Banks will expand
partnerships once fee is
decided
NPCI does not disclose the
volumes of transactions for
credit lines on UPI. Industry
sources said the adoption of the
service had been slow since
interchange fees had not been
finalised yet. “All the major
banks in the country are ready
with their systems to extend
the facility to customers, but
everybody is waiting for the
commercials to be decided
first. The interchange for the
credit line on UPI transactions
will be lower than that for a
ing at the Critical Minerals
Summit.
The secretary also said that
the result of the auction
process for seven critical min-
eral blocks held recently was
being finalised and would be
declared within a month.
The announcement comes
shortly after the government
scrapped the auction process
for 13 blocks in March due to
lacklustre interest from poten-
tial investors. The 13 blocks
included two blocks that
received no bids and 11 that had
fewer than three technically
qualified bidders.
The Centre has initiated the
At the same time, experts
said there is also a debate on
whether companies that are
adding to environmental
damage be rescued through
insolvency regime or be liqui-
dated. For instance, if a coal
company goes into insolven-
cy, then the IBC needs to take
a view whether it should be
resolved and be allowed to
continue the same practice or
insist on change of technology
as part of the resolution
process.
“There needs to be accept-
ability that this could destroy
value. Financial distress
would mean companies
defaulting on their environ-
mental obligations. Claims
around the environment need
to be embedded in law,” said
Dinkar Venkatsubramanian,
partner, EY India.
Batra suggested that at the
stage of approval of the plan
itself, an environmental body
should be involved. “The
committee of creditors may
have the commercial wisdom
but not the expertise to deal
with climate change issues.”
Among regulators, in July
2023, Securities and Exchange
Board of India (Sebi) intro-
duced the Business
Responsibility and
Sustainability Reporting for top
1000 listed companies. Experts
said that while other regulators
may take cue from Sebi to for-
mulate similar responsibilities,
balancing environmental con-
cerns with economic impera-
tives poses a significant chal-
lenge for regulators.
Dinesh Arora, partner and
deals leader at PwC India, said
striking the right equilibrium
between fostering green prac-
tices and facilitating econom-
ic recovery requires nuanced
policymaking and a thorough
understanding of industry
dynamics.
AHMEDABAD | TUESDAY, 30 APRIL 2024
Bedi from Kiwi said banks
ILLUSTRATION: BINAY SINHA
would scale up their partner-
ships once the fee was
finalised. “The reason partner-
ships haven’t come up is that
the revenue model is depend-
ent on the interchange for this
product. Once that is decided,
partnerships will start scaling
up,” he added.
Similarly, a source quoted
above added that NPCI was
looking at two ways to arrive at
a decision on the interchange
fee for credit on UPI.
“One is that when these
NPCI looking at two transactions will be of an inter-
ways to implement
the fee:
est-bearing nature, the inter-
change will be lower, whereas,
n When these
transactions will be
on the other hand, for non-
interest bearing transactions,
the interchange fee will be
of interest-bearing higher,” the person said.
nature, the interchange An industry executive
will be lesser described how this worked.
n For non-interest- “My understanding is that
bearing transactions, after a transaction, for the first
the interchange fee 15 days a customer does not
bear any interest, but is charged
will be higher
10-12 per cent thereafter. The
interchange fee will be different
credit card,” a person in the
from those transactions where
interest is applied since day
know told Business Standard.
NPCI did not respond to
zero,” the person said. The exec-
utive further said banks earned
queries sent by Business more when interest was levied
Standard.It announced the from day zero, implying that
launch of the credit line on the the interchange fee was lower
UPI facility in September last in such cases.
year. Customers can access “Under the interest-free
pre-sanctioned credit from credit period there is an impact
banks using the UPI rails. from the cost of funds. In the
“Since NPCI has not issued other case, you would generally
details about the commercials get a lower interchange since
yet, it cannot push the market you are making money from
to adopt the credit line on the charging the interest from zero
UPI facility yet,” a source said. day,” the person added.
auction of 38 critical and strate- cal mineral blocks are on the
gic minerals to date. The initial table for auction. He also urged
tranche included 20 blocks, the industry to study the data
while the subsequent tranche on these blocks to gain insight
had 18. Critical minerals such into the opportunities that are
as lithium, chromium, nickel, now available.
graphite, cobalt, titanium, and India has committed to
rare earth elements are essen- achieving 50 per cent of the
tial raw materials for sectors cumulative electric power
like electronics, electric vehi- installed capacity from non-
cle, renewable energy, defence, fossil sources by 2030.
and high-tech telecommunica- The Critical Minerals
tions. Currently, the extraction Summit aimed at bringing
of these minerals is dominated together a diverse array of
by a few countries, such as Indian and international stake-
China, which makes the supply holders, including industry
chain vulnerable to geopolitical leaders, startups, government
uncertainties. officials, scientists, academics,
Rao said that over 100 criti- and policy experts.
RBI asks lenders to
follow fair practices,
refund excess sum
PRESS TRUST OF INDIA
Mumbai, 29 April Conducts 4-day
Concerned over some banks VRR auction
and lenders resorting to Bankssubmittedbids
unfair practices in charging of worth~97,000croreatthe
interest, the Reserve Bank of 4-dayvariableraterepo
India (RBI) on Monday direct- (VRR)auctiononMonday,
ed them to take corrective againstanotifiedamount
action and refund excess of~1trillion.TheRBIallotted
charges to customers. thefundsataweighted
The guidelines on Fair averagerateof6.62per
Practices Code issued to vari- cent.Theliquiditydeficit
ous regulated entities (REs) stoodat~1.48trillionon
since 2003, inter-alia, advo- Sunday,accordingtodata
cate fairness and transparen- bytheRBI. ANJALI KUMARI
cy in charging of interest by
the lenders, while providing
adequate freedom to them as
regards loan pricing policy. Draft guidelines
“During the course of the
onsite examination of REs for
for ETPs issued
the period ended March 31, TheReserveBankofIndia
2023, the Reserve Bank came onMondayreleasedadraft
across instances of lenders MasterDirectionfor
resorting to certain unfair ElectronicTradingPlatforms
practices in charging of (ETPs)andinvited
interest,” the RBI said in commentsandfeedback
a circular. fromoperators,banks,
The central bank has also marketparticipants,and
highlighted certain unfair otherinterestedpartiesby
practices being followed by May31.Theaimisto
certain lenders. facilitatemarketmakers’
“...in the interest of fair- accesstooffshoreETPs
ness and transparency, all offeringpermittedRupee
REs are directed to review products. ANJALI KUMARI
their practices regarding
mode of disbursal of loans,
application of interest and tions of REs, the RBI said it
other charges and take cor- observed charging of interest
rective action, including sys- from the date of sanction of
tem level changes, as may be loan or date of execution of
necessary, to address,” the loan agreement and not
issues concerning charging of from the date of actual dis-
interest, the circular said. bursement of funds to
During onsite examina- the customer.
1
STANDARDISED RATES FOR HOSPITALS
Statesneedtime
toholdwider
talks: Govt to SC
SANKET KOUL healthcare facilities until stan-
New Delhi, 29 April dardised rates are set.
In its affidavit, the ministry
The Centre on Monday sub- informed the court that it had
mitted its response to the held a virtual meeting
Supreme Court urging states chaired by the health secre-
and union territories (UTs) to tary, with the chief secretaries
engage in broader consulta- of all states and UT’s on March
tions with multiple stakehold- 19 requesting all governments
ers to determine standardised to work out the standard
hospital rates. cost of medical procedures
According to the docu- and services.
ments examined by Business “Many states have suggest-
Standard, the ministry in its ed that multiple rounds of con-
response said that the exercise sultations with stakeholders,
to determine a
standard rate The SC had
including private
players and the
requires consulta- warned against
tions with all applying CGHS
Indian Medical
Association (IMA)
stakeholders rates for may be needed,
including private treatment while some
players in the services at private expressed that any
states and UTs, as health care rate range fixation
a one-size-fits-all facilities until may lead to com-
approach may not standardised promise of quality
be feasible. rates were set of healthcare, ren-
“This would dering healthcare
require additional setups financially
time to initiate the exercise unviable”, the government
and proceed further as it shall said. The centre’s affidavit also
be both manpower and time emphasised that fixation of
intensive”, the ministry said in rates may lead to serious issues
its response. like rendering healthcare
This move to hold consul- setups financially unviable
tations with states comes after and many other players may
the Supreme Court in jack up the prices. It may also
February 2024 had directed render the healthcare sector
the Centre to specify standard uncompetitive considering
rates for private hospitals, in the economic dynamics and
consultation with states. interaction of market forces.
The apex court had also Other issues discussed at
warned against applying the meeting included the low
Central Government Health adoption rates of the Clinical
Scheme (CGHS) rates for treat- Establishments (Registration
ment services at private and Regulation) Act, 2010.
Rolled out across Punjab, Haryana,
HP, Uttarakhand, and Western UP
SURAJEET DAS GUPTA
New Delhi, 29 April
The 4G subscriber base of
state-owned telecom service
provider Bharat Sanchar
Nigam Limited (BSNL) has
reached 800,000 in the
initial launch phase across
North Indian regions of
Punjab, Haryana, Himachal
Pradesh, Uttarakhand, and
western Uttar Pradesh. This
follows the deployment of an
Telcosstepup
indigenous network devel-
oped in collaboration with
tostopillegal
Tata Consultancy Services
and the government’s Centre
for Development
Telematics (C-DOT), accord-
of
sale of 6 GHz
ing to a senior Department of
Telecommunications WiFi routers
(DoT) official.
The official outlined a
more pragmatic road map for
BSNL's 4G deployment and
In a move that may widen
the gulf between telecom
operators and the illegal
the subsequent 5G launch. WiFi routers that run on the
"We expect the core of the lucrative 6 GHz spectrum
network to be installed in the band, being sold on e-
commerce sites, telecom
eastern, western, and south-
ern regions by August. The industry body Cellular
nationwide rollout is sched- Operators Association of
uled to coincide with the fes- India has written to the
tival season, followed by the Department of
introduction of 5G services Telecommunication (DoT). It
within the next 12 months,” sought an immediate ban
said the DoT official, who did on the sale of all routers
not wish to be named. operating on the band. The
BSNL has installed over 6 GHz band represents the
3,500 4G towers and aims for largest block of unused
a full-scale commercial spectrum and is being
launch across India upon fought over by telcos and
reaching 20,000 towers. Last tech firms. This is due to its
May, Information significant potential for both
Technology and 5G connectivity and WiFi
Communications Minister expansion.
Ashwini Vaishnaw had said SUBHAYAN CHAKRABORTY
the company was aiming to
secure 100 million 4G cus-
tomers within 12 to 24 with operations in New Delhi
months, alongside its plans and Mumbai, together had
to erect 100,000 towers 86.9 million subscribers, with
nationwide. less than one per cent of them
However, the rollout has utilising 4G services — a mar-
faced delays amid challenges ket share of 7.95 per cent. This
and some teething troubled figure indicates a decline
with the first domestically from a previous subscriber
built network. Though DoT base of 90-100 million. In
officials were earlier eyeing a February last year, the com-
5G launch by the end of the pany held a 9.36 per cent
year, this ambitious plan has market share, with 94.1 mil-
now been deferred to the lion subscribers.
end of next year. Amid concerns over
BSNL’s private-sector peer the shrinking subscriber
Reliance Jio, meanwhile, base, the BSNL Employees
has nearly completed its 5G Union has urged the
network expansion in just government to permit the use
over a year. of the 4G network of
As of February 2024, Vodafone-Idea — in which
BSNL and Mahanagar the government is a signifi-
Telephone Nigam Ltd cant stakeholder — to pro-
(MTNL), another state- vide immediate service
owned telecom company enhancements.