Exam View: Fintech Sector, State of the Fintech Sector in India, Important initiatives, Current Challenges with the Fintech Sector.

In News: Policymakers must expand the regulator’s capacity for effective monitoring and compliance enforcement. This would avoid a scenario like the recent one, where licensed entities suffered because the data with the non-regulator executive was deficient.

India is amongst the fastest growing Fintech markets in the world. Currently there are 2,000+ DPIIT-recognized Financial Technology (FinTech) startups in India with this number growing fast. Indian FinTech industry’s market size is $50 Bn in 2021 and is estimated at ~$150 Bn by 2025.

State of the Fintech Sector in India:

• The Fintech segment in India has seen an exponential rise in funding over the last few years; the sector received funding worth ~$9.8 Bn in 2021, led by the Payments segment (53% share of fintech funding across all fintech verticals in India.)
• BHIM UPI clocked over 3.2 billion transactions in July 2021, marking a game-changing penetration of digital payments in India. Similarly, UMANG App has witnessed cumulate 1.7 billion transactions.
• India is the 3rd largest FinTech ecosystem with a highest Fintech adoption rate globally (87%).
• The fintech sector in India has grown dramatically during the pandemic, with the number crossing 7,500 fintech startups. During 2014 to mid-2022, the sector received more than USD 30 billion in funding.

Current Challenges with the Fintech Sector:

• Cybersecurity: With the increase in digital transactions, there is a growing concern around cybersecurity threats. India’s Computer Emergency Response Team (CERT-IN) reported that in the first half of 2022, over 674,000 cyber security incidents occurred in the country.
• Access to Funding: Despite the growth in the fintech industry, many startups in India struggle to secure funding. This is due to a lack of understanding of the sector among traditional investors and a limited number of venture capital firms that focus on fintech startups.
• Low Awareness: Many people in India are still unaware of the benefits of fintech services. Fintech companies need to work on increasing awareness about their offerings and the value they bring to customers.
• Regulatory Challenges: One of the significant challenges faced by the fintech sector in India is the lack of a well-defined regulatory framework. The sector is regulated by multiple authorities, which can lead to confusion and ambiguity.
• Inadequate Infrastructure: Despite the growth in the sector, India still lacks the necessary infrastructure to support fintech services. Issues such as slow internet speeds, lack of interoperability, and inadequate digital infrastructure can pose challenges to the growth of the fintech sector.
• Competition from Traditional Banks: Traditional banks are also expanding their digital offerings, creating intense competition for fintech companies. Fintech startups need to continue to innovate and offer unique solutions to differentiate themselves from traditional banks.

Important initiatives:

The government can invest in building a robust digital infrastructure, including improved broadband connectivity and cloud computing services. The government can work with the industry to develop a more streamlined and efficient regulatory regime that promotes innovation and growth while also protecting consumers.

India is a pioneer in the digital ecosystem and has the responsibility of pivoting it carefully to address financial inclusion and democratising financial access. Trust between all stakeholders is non-negotiable and has to be based on consensus, not vote or veto. Trust, after all, will be influenced by the performance of every stakeholder with every action or inaction.

https://www.financialexpress.com/opinion/trust-as-the-guardrail-for-fintech/2988429/ 

In News:

As per International Monetary Fund (IMF) Director, India continues to remain a relative “bright spot” in the world economy, and will alone contribute 15% of the global growth in 2023.

About:

India remains a bright spot at a time when the IMF is projecting 2023 to be difficult with global growth slowing down from 3.4% last year to 2.9% in 2023. India pulled itself out of the pandemic lows because of:

• Digitisation as it created opportunities for growth and jobs.
• Opening up space for entrepreneurs due to
  • Public digital infrastructure is built in a very agile and welcoming manner. So private initiatives can tap into this public infrastructure and benefit themselves.
• Prudent fiscal policy that includes
  • Commitment to fiscal consolidation
  • Significant financing for capital investments, Capital investment is being increased steeply for the third year in a row by 33% to ₹10 lakh crore.
  • The capital spending increase, would amount to 3.3% of gross domestic product (GDP).
  • Balancing development needs with fiscal responsibility in India with growth-supporting spending.
• Green economy potential to shift the country towards clean energy and keep growth going.
• Improved tax administration, persevered with the goods and services tax, is starting to broaden the personal income tax.
• Women empowerment through
  • Access to education
  • Attention to security, so women can go to work. For example: women-only cars on a metro or local train.

India's G-20 presidency provides an opportunity for India to share this experience with the developing world.

Source:

https://www.thehindu.com/business/Economy/india-remains-a-bright-spot-to-contribute-15-of-global-growth-in-2023-imf-md/article66540985.ece#:~:text=India%20continues%20to%20remain%20a,Managing%20Director%20Kristalina%20Georgieva%20said.

In News:

The heat-spewing anticyclone over North-West India may recede from land and back off into the Central Arabian Sea to make way later for a moisture-laden western disturbance and associated cloud cover towards the month-end and early March.

About anticyclones:

About western disturbance:

• Western disturbance (WD) is an extratropical storm.
• The disturbance travels from the “western” to the eastern direction.
• Disturbance means an area of “disturbed” or reduced air pressure. Equilibrium exists in nature due to which the air in a region tries to normalise its pressure.
• A WD is associated with rainfall, snowfall and fog in northern India. Upon its arrival in Pakistan and northern India, clouds along with rain and snow also arrive.
• The moisture which WDs carry with them comes from the Mediterranean Sea and/or from the Atlantic Ocean. 

About Madden-Julian oscillation (MJO):

• It is an intra-seasonal fluctuation of atmospheric pressure over the equatorial Indian and western Pacific oceans.
• This phenomenon comes in the form of alternating cyclonic and anticyclonic regions that enhance and suppress rainfall, respectively, and flow eastward along the equator.
• The MJO has the ability to influence monsoonal circulation.

Source: 

https://www.thehindubusinessline.com/economy/agri-business/heat-dome-over-north-west-india-may-retract-from-wednesday/article66535391.ece

In News:

India linked its Unified Payments Interface (UPI) with Singapore’s PayNow to facilitate faster, more efficient and transparent cross-border transactions relating to trade, travel and remittances between the two countries.

About the News:

• Singapore has now become the first country with which cross-border Person to Person (P2P) payment facilities have been launched.
• Unified Payments Interface (UPI) is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer. It eliminates the risk of sharing bank account details by the remitter.
• PayNow is a fast payment system in Singapore which enables peer-to-peer funds transfer service to retail customers through participating banks and Non-Bank Financial Institutions in Singapore. It enables transactions by just using their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.

What are the benefits of UPI-PayNow linkage?

• The UPI-PayNow linkage between India and Singapore closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
• It will enable users to make instant, low-cost fund transfers on a reciprocal basis without a need to get on board the other payment system.
• It will also help the Indian diaspora in Singapore, especially migrant workers and students, through the instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
• The integration of the system will bring down the cost of sending remittances by 10%

Source:

https://www.thehindu.com/business/Economy/india-singapore-launch-upi-paynow-linkage/article66536960.ece

In News

A total of 2.26 million tonnes of plastic packaging has been covered under Extended Producer Responsibility (EPR) provisions and around 5,400 producers, importers and brand owners (PIBOs) registered for EPR in the last one year.

About Extended Producer Responsibility:

• EPR is a mechanism where producer companies have to ensure that their products are collected and recycled at the end of their useful life, rather than being disposed of in a landfill or incinerated.
• In India, The Plastic Waste Management Rules, 2016, which is issued under Environment (Protection) Act, 1986, introduced the concept of EPR to manage plastics in India.
• The rules also provide for a system where makers and users of plastic packaging can collect EPR certificates and trade in them.

What are the steps taken by the government to tackle pollution due to plastic wastes?

• MoEFCC, has adopted two pronged strategy to tackle unmanaged and littered plastic waste
  • enforcement of ban on identified single use plastic items, which cannot be collected
  • Implementation of EPR on plastic packaging.
• A defining step to curb pollution caused by plastic waste was the imposition of a ban on identified single use plastic items from 1st July 2022, throughout the country.
• For rapid penetration and spurring innovation in the area of development and use of eco-alternatives, MoEFCC had organised an India Plastic Challenge Hackathon, 2021.
• Two innovative solutions for eco-alternatives were awarded under the Hackathon
  • a rigid packaging material made from rice stubble, which substitutes for thermocol and not only addresses plastic pollution but will also help in reducing the pollution caused by burning of rice stubble
  • a flexible packaging film made from seaweeds to be used for wrapping and carry bag applications

https://pib.gov.in/PressReleseDetail.aspx?PRID=1900282

In News: Global leaders fails to ink UN High Seas Treaty

Context:

• Negotiations involving 168 countries, including the European Union, failed to agree on a UN treaty for protecting oceans, known as the UN High Seas Treaty.
• In 2017, a UN resolution had decided to set 2022 as deadline to rectify the absence of a treaty for conserving the health of earth’s oceans from where nearly 90% of global warming is
• At present, a treaty dedicated to protecting ocean health does not exist and the world’s oceans are regulated by some treaties, along with UNCLOS, which regulates the conduct of actors on the high seas.
• Talks will only resume next year, unless a special session is called.
• Previously, the UN Secretary-General Antonio Guterres had declared an “ocean emergency” at the UN Ocean Conference in Lisbon, Portugal, citing threats to the world’s oceans.

Key points:

• The proposed treaty concerns the ocean beyond the Exclusive Economic Zones, which lie about 200 nautical miles into the sea, till where it has special rights for exploration.
• The treaty was to be negotiated under the United Nations Convention on Laws of the Sea (UNCLOS) of 1982 which governs the rights of countries regarding marine resources.
• According to the World Wildlife Fund, and excessive fishing has increased manifold over the years, putting a third of species such as sharks and rays at the risk of extinction.
• Members failed to agree on how to deal with these threats, with talk of resistance from countries that engage in deep sea mining of minerals or are heavily invested in fishing.
• Some countries in the Caribbean alleged that richer countries of the Global North did not actively participate due to vested economic interests.

https://www.downtoearth.org.in/news/governance/fresh-negotiations-on-un-high-seas-treaty-begin-in-new-york-here

In News: Climate risk firm releases the Gross Domestic Climate Risk Ranking

Context:

• The report has been released by Cross Dependency Initiative which is a think tank which specializes in climate risk analytics for companies, banks and regions.
• The ranking reflects physical risk to the built infrastructure from eight climate change hazards.
• The hazards include riverine and surface flooding, coastal inundation, extreme heat, forest fire, soil movement, extreme wind, and freeze thaw.
• The analysis has used global climate models, combined with local weather and environmental data and engineering archetypes, to calculate probable damage to the built environment.

Major Findings:

Importance of the findings:

• The findings underscore the importance of pricing physical climate risk in financial markets, including bond markets, given the assets at risk in the provinces identified.
• The vulnerability of global supply chains and the need for climate resilience to inform investment.
• For the first time, the finance industry can directly compare Mumbai, New York, and Berlin using a like-for-like methodology.
• Ranking data can inform climate-resilient investment, in conjunction with adaptation measures and infrastructure planning undertaken by state and provincial governments.
• The ranking data can be significant for investors, as extensive built-up areas overlap with high levels of economic activity and property wealth.

https://www.hindustantimes.com/india-news/9-indian-states-among-top-vulnerable-places-101676922251068.html

In News: Researchers at IISc develops a brain-inspired image sensor to detect small objects beyond the diffraction limit of light.

Key Points:

• The sensor developed by Indian Institute of Science can detect objects smaller than 50 nanometres.
• The sensor uses optical microscopy, a neuromorphic camera, and machine learning algorithms to go beyond the diffraction limit of light.
• The neuromorphic camera mimics the human retina's way of converting light into electrical impulses and has a high dynamic range, making it suitable for use in neuromorphic microscopy.
• The camera detects individual fluorescent beads smaller than the diffraction limit by measuring variations in fluorescence levels when laser pulses are shone at high and low intensities.
• The camera reports "ON" events when light intensity increases and "OFF" events when it decreases, and the data from these events are pooled together to reconstruct frames.
• This new technique presents a significant advancement in pinpointing small objects that are invisible to current microscopes.

What is Diffraction limit of light?

• The power to magnify the image of the specimen when viewing through a microscope depends on how much the lenses bend the light waves.
• Diffraction limit is one of the factors that can affect the final resolution of an optical imaging system.
• Back in 1873, a German physicist named Ernst Abbe realized that the resolution of optical imaging instruments, including telescopes and microscopes, is fundamentally limited by the diffraction of light.
• This limity does not allow the microscope to differentiate between two objects divided by a lateral distance that is less than half of the wavelength of the light used to image the sample.

https://www.thehindu.com/news/national/karnataka/brain-inspired-image-sensor-can-detect-miniscule-objects-iisc-study/article66536497.ece

Why in news? Recently, Dickinsonia fossil found in Bhimbetka turns out to be decayed beehive.

About

• It is an extinct genus of basal animal that lived during the late Ediacaran period in what is now Australia, Russia, and Ukraine.
• These creatures arose in a world devoid of predators and had no need for hard protective carapaces or skeletons.
• The discovery of cholesterol molecules in fossils of Dickinsonia lends support to the idea that Dickinsonia was an animal.

About Bhimbetka Caves:

• The Bhimbetka rock shelters are an archaeological site in central India that spans the Paleolithic and Mesolithic periods, as well as the historic period.
• It exhibits the earliest traces of human life in India and evidence of Stone Age starting at the site in Acheulian times.
• It is located in the Raisen District in the Indian state of Madhya Pradesh.
• It is a UNESCO World Heritage Site that consists of seven hills and over 750 rock shelters distributed over 10 km

https://www.thehindu.com/sci-tech/science/dickinsonia-fossil-found-in-bhimbetka-turns-out-to-be-decayed-beehive/article66541003.ece

Why in news? Recently,  French troops withdrew from Burkina Faso

About

• Burkina Faso, a former French colony has suffered chronic instability since gaining independence in 1960, including several coups.
• The country's name, meaning "land of the honest men", was picked by revolutionary military officer Thomas Sankara who took power in 1983.
• Burkina Faso is a landlocked country that shares borders with six neighboring countries: Côte d'Ivoire, Ghana, Togo, Benin, Niger and Mali.

https://www.thehindu.com/news/international/explained-why-have-french-troops-withdrawn-from-burkina-faso/article66541974.ece

Why in news? ‘900-year-old Parrot Lady’ relives journey from Canada

About

• The “Parrot Lady” is a 10th-century statue depicting a woman with a parrot near her ear.
• It was seized from a person in Canada and handed over to the Prime Minister of India in 2015.
• The ASI believes the statue was taken from one of the unprotected monuments in the Khajuraho region, though there is no official record of when it went missing.

About Exhibition

• The exhibition is part of the first G20 Culture Working Group (CWG). The exhibition comprises 26 artifacts that have returned to the country after being stolen from India and smuggled abroad and their cultural biographies.
• Others include: the 12th-century Dancing Ganesha, a stone sculpture from central repatriated from the US in 2021; the 11th-century marble sculpture of Brahma and Brahmani from Gujarat, repatriated from the UK in 2017; and the Yaksha, Amin Pillar from 2nd century BC, which went missing from Haryana, but was later discovered in the UK and repatriated in 1979-80.
• The objective of the meeting is to achieve a reduction inthe illicit trafficking of cultural property by 2030, strengthen regulation of online trading platforms and also create awareness about restitution laws and conventions and highlight successful case studies.
• The exhibition is conceptualized in six thematic sections: cultural heritage, repatriation of cultural property, historical precedents, conventions and guiding principles, global cooperation and glimpses of the return.

https://indianexpress.com/article/india/900-yr-old-parrot-lady-relives-journey-from-canada-8461443/

Why in news? Recently,  Kanak Rele dies, and she gave academic status to Mohiniyattam.

About

• Mohiniyattam is a classical dance style from Kerala state and one of the eight principal Indian classical dance.
• The Mohiniyattam is a popular dance form with a drama in dance, performed with subtle gestures and footwork.
• Mohiniyattam is characterized by graceful, swaying body movements with no abrupt jerks or sudden leaps. It belongs to the Lasya style which is feminine, tender and graceful.
• The most characteristic element of the “form” component of Mohiniattam is the circular or spiral movement of all the limbs of the body. This gives it a swaying effect which resembles the movement of a pendulum and thus it is called aandolika.
• Movements have been borrowed from Nangiar Koothu and female folk dances Kaikottikali and the Tiruvatirakali.
• The footwork is not terse and is rendered softly. Importance is given to the hand gestures and Mukhabhinaya with subtle facial expressions.
• The hand gestures, 24 in number, are mainly adopted from Hastalakshana Deepika, a text followed by Kathakali. Few are also borrowed from Natya Shastra, Abhinaya Darpana and Balarambharatam.

https://indianexpress.com/article/lifestyle/art-and-culture/noted-dancer-kanak-rele-who-gave-academic-status-to-mohiniyattam-dies-8461367/

Why in news? Recently, the government said LCA Mk2 can carry 8 BVR missiles, integrate French and Russian weapons

About

• The LCA-Mk2 will be a heavier and much more capable aircraft than the current LCA variants and the LCA-Mk1A.

Features:

• The Mk2 is 1350 mm longer, featuring canards, Enhanced range and endurance, and an Onboard Oxygen Generation System which is being integrated for the first time.
• Ability to carry heavy stand-off weapons of the class of Scalp, Crystal Maze and Spice-2000.
• Payload: Can carry a payload of 6,500 kg compared with the 3,500 kg the LCA can carry.
• The Mk2 will be powered by the General Electric GE-414 engine, which will also power the Advanced Medium Combat Aircraft (AMCA). A GE-414 produces 98kN thrust compared to 84kN thrust of the GE-404 engine powers the LCA Mk1 and MK1A.

https://indianexpress.com/article/india/lca-tejas-mk2-can-carry-8-bvr-missiles-integrate-french-russian-weapons-official-8461499/

Why in news? Seattle becomes the first country, which bans caste discrimination.

About

• Seattle has passed a historic piece of legislation making it the first city in the United States to prohibit discrimination based on caste.
• The legislation was introduced in the Seattle City Council and was passed with a 6-1 vote.
• It aims to prevent businesses from discriminating against individuals based on their caste with regard to wages, tenure, promotion, hiring, and workplace conditions.
• The new law will also prohibit caste-based discrimination in places of public accommodation, such as hotels, public transportation, retail establishments, and public restrooms. The law will apply to mortgage loans, property sales, and rental housing leases.
• According to Equality Labs, caste discrimination has become a significant contributor to workplace bias and discrimination.

https://indianexpress.com/article/explained/explained-global/seattle-bans-caste-discrimination-8460862/