Daily Financial News Analysis – 11th Nov’20 – Free PDF Download


Digital Payments Market

  • Google, Facebook and Amazon may tie up with Indian companies to set up a rival to the National Payments Corporation of India (NPCI) for a bigger play in the digital payments market.
  • All three want to pick up at least 15-20% in the proposed new umbrella entity (NUE).
  • Google and Facebook have approached Reliance Jio Infocomm for partnership
  • Reserve Bank of India rules stipulate the NUE promoter be an Indian firm.
  • A stake in the NUE gives them a chair at the table with regulators and banks, in making daily governance and operations-related decisions on digital payments.
  • RBI recently allowed Indian and foreign firms to set up for-profit NUEs that will have a say in operations of the NPCI-run Unified Payments Interface (UPI) and be regulated by the central bank.


  • European Union regulators filed antitrust charges on Tuesday against Amazon.
  • It has accussed Amazon of using its access to data to gain an unfair advantage over merchants using its platform.
  • The EU’s executive commission, the bloc’s top antitrust enforcer, issued the charges after it started looking into the company two years ago.
  • Adding to Amazon’s regulatory headaches, the EU also opened a second investigation into whether the company favours product offers and merchants that use its own logistics and delivery system.
  • It’s the latest effort by executive vice president Margrethe Vestager, the EU commissioner in charge of competition issues, to curb the power of big technology companies.
  • It’s not a problem that Amazon is big and successful but “our concern is very specific business conduct which appears to distort genuine competition”, Vestager said.
  • Amazon faces a possible fine of up to 10% of its annual worldwide revenue, which could amount to as much as $28 billion based on its 2019 earnings.

Link All A/cs with PAN, Aadhaar

  • Finance minister Nirmala Sitharaman on Tuesday asked banks to ensure that all accounts are linked to Aadhaar and Permanent Account Numbers by March 31.
  • The minister said banks must use the latest technology to close loopholes in the system and promote the unified payments interface-based digital transactions and Rupay cards to make the National Payments Corporation of India a global brand.
  • Sitharaman stressed on the need to link bank accounts with Aadhaar to prevent duplication or fake beneficiaries of government welfare schemes administered through direct benefit transfers.
  • She said the country needed bigger banks but at the same time there was a need for small banks and nonbanking financial companies to serve rural areas.

Social Security Cover for Unorganised Workers

  • The government is bringing at least 25 crore unorgansied sector workers under the social security net in the next five years.
    1. old-age pension
    2. health insurance
    3. disability aids
    4. Host of other social security benefits to all sections, including gig, platform and migrant workers
  • Only a tenth of the country’s estimated 50 crore working population now comes under some sort of social security cover.
  • Labour secretary Apurva Chandra said a portal is being developed by the government in which unorganised sector workers will get themselves registered on the basis of self-certification through a simple procedure using Aadhaar.
  • The portal is expected to be launched in the next 4-5 months.
  • All social security schemes and benefits will flow through the portal.
  • It will also capture the skill set and other details of the unorganised sector workers.
  • The platform will be used for registration, enrollment, identification and collection of other required data for all such workers.
  • It will be the primary database around which all social security schemes will be structured.
  • Under the social security code, passed in Parliament in September, a provision for providing comprehensive social security schemes to the unorganised sector has been made.
  • The government intends to implement schemes under the social security code in phases.
  • A social security fund will be created on the financial side in order to implement these schemes.
  • Rules, schemes and benefits under the code are being drafted now.
  • The labour ministry plans to notify the draft rules in the next 10-15 days and thereafter, the draft rules will be kept open for consultation for 45 days before being finalised.
  • Chandra said domestic workers and even agriculture workers will also be entitled for benefits under the social security code.
  • Schemes will specify the rate of contribution to be made by different constituents under the code.

Mobile money a/cs

  • The number of registered mobile money accounts in India witnessed a quantum leap from just 73 per thousand adults in 2015 to 1,265 in 2019, suggesting a massive improvement in access to digital financial services in recent years, showed data released in an International Monetary Fund (IMF) report.
  • The report defines ‘mobile money’ as a financial service offered by a mobile network operator (MNO) or another entity that partners with an MNO, facilitated by a network of mobile money agents.
  • Of course, the value of mobile money transactions is still a tiny fraction of India’s GDP and far below the level among even some low- and middle-income countries.
  • The report said the progress made in getting people into the folds of the financial system, especially in low- and middle-income economies, has been made possible through innovations such as digital financial services, including mobile money.
  • The Reserve Bank of India (RBI) data released recently showed a huge jump in digital transactions over the past five years.
  • Between FY16 and FY20, digital payments have grown at a compounded annual growth rate of 55.1% – from 593.61 crore in the year through March 2016 to 3,434.56 crore in the last fiscal.
  • The IMF report shows that among a dozen countries in the low and middle-income economies, India has witnessed the biggest jump in the number of registered mobile money accounts between 2015 and 2019.
  • While the value of mobile money transactions in 2019 is close to 70% and 90% of GDP in Ghana and Cambodia, respectively, it is still just a tiny fraction of India’s GDP.




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