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 image circulating on social media claims it to be a natural optical illusion from Epirus, Greece. However, upon fact-checking, it was found that the image is an AI-generated artwork created by Iranian artist Hamidreza Edalatnia using the Stable Diffusion AI tool. CyberPeace Research Team found it through reverse image search and analysis with an AI content detection tool named HIVE Detection, which indicated a 100% likelihood of AI generation. The claim of the image being a natural phenomenon from Epirus, Greece, is false, as no evidence of such optical illusions in the region was found.
Claims:
The viral image circulating on social media depicts a natural optical illusion from Epirus, Greece. Users share on X (formerly known as Twitter), YouTube Video, and Facebook. It’s spreading very fast across Social Media.
Similar Posts:
Fact Check:
Upon receiving the Posts, the CyberPeace Research Team first checked for any Synthetic Media detection, and the Hive AI Detection tool found it to be 100% AI generated, which is proof that the Image is AI Generated. Then, we checked for the source of the image and did a reverse image search for it. We landed on similar Posts from where an Instagram account is linked, and the account of similar visuals was made by the creator named hamidreza.edalatnia. The account we landed posted a photo of similar types of visuals.
We searched for the viral image in his account, and it was confirmed that the viral image was created by this person.
The Photo was posted on 10th December, 2023 and he mentioned using AI Stable Diffusion the image was generated . Hence, the Claim made in the Viral image of the optical illusion from Epirus, Greece is Misleading.
Conclusion:
The image claiming to show a natural optical illusion in Epirus, Greece, is not genuine, and it's False. It is an artificial artwork created by Hamidreza Edalatnia, an artist from Iran, using the artificial intelligence tool Stable Diffusion. Hence the claim is false.
Introduction
Social media platforms serve as an ideal breeding ground for cybercrime. A new fraud called ‘WhatsApp Pink’ has emerged, promising new features and an improved UI. Several law enforcement and government agencies have already issued severe caution against the program, which is used to hack mobile phones and steal personal information.
What is a pink WhatsApp Scam?
WhatsApp is on a roll with new features, but the messaging app is also experiencing an increase in a new type of scam. The WhatsApp Pink scam, as it is known, is gaining steam. Police and government organisations in several states, including Mumbai, Kerala, and Karnataka, have warned about the scam. A North Region cybercrime wing tweet warned, “WHATSAPP PINK – A Red Alert for Android Users.” The government’s cybersecurity organisations have warned about the rise in pink WhatsApp scams.
Scammers and hackers target WhatsApp users with fake messages via the network in this scam. According to reports, the message contains a link directing users to download WhatsApp Pink, a bogus messaging program. According to sources, scammers are targeting many people with the promise that the next version will have a better interface and additional features.
The application also steals critical financial information such as OTP, bank account information, and contact information. When people open the link, harmful software is installed on their mobile phones, and scammers get access to the phones. The user may even lose access to their phone by downloading the app.
According to the advisory
The news about ‘New Pink Look WhatsApp with extra features’ recently circulating among WhatsApp users is a hoax that can lead to hacking of your mobile through malicious software.” It is uncommon for fraudsters to devise new tricks and methods to entice naive consumers into falling into their trap and committing cyber fraud. It is the users’ responsibility to be Aware, Alert, and Attentive to these types of frauds in order to be safe and secure in the digital world.”
The link that is present in the message, according to a notice from the police, is a phishing effort. By clicking the link, the user runs the risk of having their device compromised, which might allow scammers to steal their device information or use it without their permission.
Users run the possibility of suffering negative outcomes if they click the Pink WhatsApp link, as the Mumbai Police have warned. These dangers include financial loss, identity theft, spam attacks, unauthorised access to contact information and saved images, and even total loss of control over mobile devices.
Guidelines against the Scam
- If a user has installed the fake WhatsApp, the authorities have instructed that they uninstall it immediately by going into the mobile settings, selecting WhatsApp with the pink logo in Apps, and then uninstalling it.
- Users have been advised to exercise caution when clicking links from untrustworthy websites unless they have previously verified their legitimacy. Users are advised to only download and update software from reliable sites such as the official Google Play Store, the iOS App Store, and so on.
- individuals using the site have been told not to send any links or communications to other persons until they have received proper authentication or verification.
- To avoid misuse, users are advised not to disclose any personal or financial information, including passwords, login information, and credit or debit card information, to anybody online. Furthermore, in order to defend themselves against fraud attempts, users are encouraged to stay up to date on the most recent news and changes in order to be informed and careful about cybercriminal activities.
Why do Scammer target WhatsApp
WhatsApp is the world’s most popular messaging service; it can reach out to considerably more prospective victims than it could with another tool. A scammer’s victims are almost certainly using WhatsApp. If all their victims are in one app, the criminal can easily handle their activities.
Conclusion
WhatsApp users may reduce their chances of being victims of the pink WhatsApp scam significantly by following the guidelines issued by the advisory. WhatsApp has become the primary target for scams, as there is a large number of the population using WhatsApp so it will be easy for the Scammer to steal critical personal information and target another victim through WhatsApp. The pink WhatsApp Scam is exactly like it.
Introduction
To combat the problem of annoying calls and SMS, telecom regulator TRAI has urged service providers to create a uniform digital platform in two months that will allow them to request, maintain, and withdraw customers’ approval for promotional calls and messages. In the initial stage, only subscribers will be able to initiate the process of registering their consent to receive promotional calls and SMS, and later, business entities will be able to contact customers to seek their consent to receive promotional messages, according to a statement issued by the Telecom Regulatory Authority of India (TRAI) on Saturday.
TRAI Directs Telecom Providers to Set Up Digital Platform
TRAI has now directed all access providers to develop and deploy the Digital Consent Acquisition (DCA) facility for creating a unified platform and process to digitally register customers’ consent across all service providers and principal entities. Consent is received and maintained under the current system by several key entities such as banks, other financial institutions, insurance firms, trading companies, business entities, real estate businesses, and so on.
The purpose, scope of consent, and the principal entity or brand name shall be clearly mentioned in the consent-seeking message sent over the short code,” according to the statement.
It stated that only approved online or app links, call-back numbers, and so on will be permitted to be used in consent-seeking communications.
TRAI issued guidelines to guarantee that all voice-based Telemarketers are brought under a single Distributed ledger technology (DLT) platform for more efficient monitoring of nuisance calls and unwanted communications. It also instructs operators to actively deploy AI/ML-based anti-phishing systems as well as to integrate tech solutions on the DLT platform to deal with malicious calls and texts.
TRAI has issued two separate Directions to Access Service Providers under TCCCPR-2018 (Telecom Commercial Communications Customer Preference Regulations) to ensure that all promotional messages are sent through Registered Telemarketers (RTMs) using approved Headers and Message Templates on Distributed Ledger Technologies (DLT) platform, and to stop misuse of Headers and Message Templates,” the regulator said in a statement.
Users can already block telemarketing calls and texts by texting 1909 from their registered mobile number. By dialing 1909, customers can opt out of getting advertising calls by activating the do not disturb (DND) feature.
Telecom providers operate DLT platforms, and businesses involved in sending bulk promotional or transactional SMS must register by providing their company information, including sender IDs and SMS templates.
According to the instructions, telecom companies will send consent-seeking messages using the common short code 127. The goal, extent of consent, and primary entity/brand name must be clearly stated in the consent-seeking message delivered via the shortcode.
TRAI stated that only whitelisted URLs/APKs (Android package kits file format)/OTT links/call back numbers, etc., shall be used in consent-seeking messages.
Telcos must “ensure that promotional messages are not transmitted by unregistered telemarketers or telemarketers using telephone numbers (10 digits numbers).” Telecom providers have been urged to act against all erring telemarketers in accordance with the applicable regulations and legal requirements.
Users can, however, refuse to receive any consent-seeking messages launched by any significant Telcos have been urged to create an SMS/IVR (interactive voice response)/online service for this purpose.
According to TRAI’s timeline, the consent-taking process by primary companies will begin on September 1.According to a nationwide survey conducted by a local circle, 66% of mobile users continue to receive three or more bothersome calls per day, the majority of which originate from personal cell numbers.
There are scams surfacing on the internet with new types of scams, like WhatsApp international call scams. The latest scam is targeting Delhi police, the scammers pretend to be police officials of Delhi and ask for the personal details of the users and the calling them from a 9-digit number.
A recent scam
A Twitter user reported receiving an automated call from +91 96681 9555, stating, “This call is from Delhi Police.” It went on to ask her to stay in the queue since some of her documents needed to be picked up. Then he said he is a sub-inspector at New Delhi’s Kirti Nagar police station. He then questioned if she had lately misplaced her Aadhaar card, PAN card, or ATM card, to which she replied ‘no’. The fraudster then claims to be a cop and asks her to validate the final four digits of her card because they have discovered a card with her name on it. And so many other people tweeted about this.
The scams are constantly increasing as earlier these scammers asked for account details and claimed to be Delhi police and used 9-digit numbers for scamming people.
TRAI’s new guidelines regarding the consent to receive any promotional calls and messages to telecommunication providers will be able to curb the scams.
The e- KYC is an essential requirement as e-KYC offers a more secure identity verification process in an increasingly digital age that uses biometric technologies to provide quick results.
Conclusion
The aim is to prevent unwanted calls and communications sent to customers via digital methods without their permission. Once this platform is implemented, an organization can only send promotional calls or messages with the customer’s explicit approval. Companies use a variety of methods to notify clients about their products, including phone calls, text messages, emails, and social media. Customers, however, are constantly assaulted with the same calls and messages as a result of this practice. With the constant increase in scams, the new guideline of TRAI will also curb the calling of Scams. digital KYC prevents SIM fraud and offers a more secure identity verification method.
