07 Oct 2023 Domestic Card Scheme Agreement
This article covers “Daily Current Affairs” and the topic details “Domestic Card Scheme Agreement”. This topic has relevance in the Economy section of the UPSC CSE exam.
For Prelims:
About National Payments Corporation of India (NPCI)?
About RuPay?
For Mains:
GS 3: Economy
Overview of the Agreement?
Why in the news?
International Payments Limited (NIPL) has recently forged a strategic partnership with Al Etihad Payments (AEP) to collaborate on the implementation of a Domestic Card Scheme (DCS) in the United Arab Emirates (UAE).
Overview of the Agreement:
- Under this agreement, National Payments Corporation of India International (NIPL) and the UAE’s Authority of Electronic Payment Systems (AEP) will collaborate to develop, implement, and operate the United Arab Emirates’ (UAE) national domestic card scheme (DCS).
- The primary objective of the DCS is to facilitate the expansion of e-commerce and digital transactions within the UAE. Additionally, it aims to enhance financial inclusion, support the UAE’s digitalization initiatives, diversify payment options, reduce transaction costs, and bolster the UAE’s global competitiveness in the payments sector.
- This partnership aligns seamlessly with NIPL’s mission, which is to leverage its knowledge and expertise to assist other nations in establishing efficient and secure payment systems.
- The DCS solution is founded on several key principles, including sovereignty, rapid market entry, innovation, digitalization, and strategic independence. NIPL’s comprehensive DCS solution encompasses a RuPay card stack and supplementary services such as fraud monitoring and analytics.
- Moreover, NIPL will play a pivotal role in assisting AEP in formulating the operational regulations for their domestic card scheme.
NOTE: NIPL is a wholly-owned subsidiary of the National Payments Corporation of India (NPCI).
About National Payments Corporation of India (NPCI)
- The National Payments Corporation of India (NPCI) serves as the central entity responsible for managing and overseeing retail payment and settlement systems in India. This vital organization was established as a collaborative effort between the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) under the framework of the Payment and Settlement Systems Act of 2007.
- Recognizing the indispensable role that NPCI plays in the Indian financial landscape, it was established as a “Not for Profit” Company in accordance with the provisions of Section 25 of the Companies Act, 1956 (now Section 8 of the Companies Act, 2013). NPCI operates with the primary objective of furnishing essential infrastructure to the entire banking sector in India, supporting both physical and electronic payment and settlement systems. Its mission is to create a robust and secure Payment & Settlement Infrastructure in the country, ensuring the efficient functioning of these critical financial processes.
About RuPay:
- RuPay stands as an indigenous, highly secure, and widely accepted card payment network originating from India. RuPay cards are versatile, offering debit, credit, and prepaid functionalities.
- As of the present, over 750 million RuPay cards are in circulation, representing over 60% of all cards issued in India. Remarkably, every second Indian possesses a RuPay card.
- These cards are distributed across the entire spectrum of banking institutions, including public sector, private sector, and smaller banks.
Source:https://www.msn.com/en-in/news/world/npci-to-sign-pact-with-al-etihad-payments/ar-AA1hGPSY
Download Yojna daily current affairs eng med 7th Oct 2023
Q.1 Consider the following statements regarding the National Payments Corporation of India (NPCI) :
- NPCI is a for-profit organization established by the Indian government to oversee retail payments.
- The organization was established through a joint initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA).
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
ANSWER: C
Q.2 Consider the following statements regarding RuPay cards:
- RuPay cards are limited to debit and credit propositions, excluding prepaid cards.
- RuPay cards are only issued by public sector banks in India.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
ANSWER: D
Q.3 Examine the role and significance of indigenous payment networks, such as RuPay, within the Indian financial ecosystem. Assess the impact of these systems on financial inclusion, digital transformation, and the overall security of financial transactions in the country.
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