Current Affairs – March, 2019

Latest Current Affairs March, 2019 with Current Affairs, news summary on current events of National and International importance of March, 2019 for Banking, SSC, CLAT, UPSC, State PCS, IBPS, Railways and other Competitive Examinations.

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RBI for Setting up Regulatory Sandbox

The Reserve Bank of India (RBI) will be issuing guidelines within two months for the fintech companies to test their new products on a small group of users before scaling up. This regulatory sandbox will help fintech companies to launch innovative products at a lower cost and in less time and enable fintech companies to conduct live or virtual testing of their new products and services.

Sandbox

A Sandbox is a framework set up by a regulator that allows FinTech start-ups to conduct live experiments in a controlled environment under supervision.

Benefits from Regulatory sandbox

  • Regulatory sandbox will provide a well-defined space for the companies to develop new products.
  • Regulatory sandbox allows for experimenting with their products and fintech solutions. In case of failure, the consequences would be contained and the reasons will be analysed for betterment.
  • Regulatory Sandbox’ would benefit FinTech companies by way of reduced time to launch innovative products at a lower cost.

The RBI’s working group on FinTech and digital banking in 2017 had recommended that a regulatory sandbox/innovation hub be introduced within a well-defined space and duration to experiment with FinTech solutions, where the consequences of failure can be contained and reasons for failure analysed.

Election Commission of India on Electoral Bonds

In an affidavit filed before the Supreme Court, the Election Commission of India has made the following observations:

  • Electoral bonds, contrary to government claims, wreck transparency in political funding.
  • Electoral bonds coupled with the removal of the cap on foreign funding invites foreign corporate powers to impact Indian politics.
  • Electoral bonds would cause a “serious impact” on transparency in the funding of political parties.

The Election Commission of India further criticises amendments made to various key statutes through the two consecutive Finance Acts of 2016 and 2017.

What were the amendments made?

The Finance Act of 2017 amends various laws, including the Representation of the People Act of 1951, the Income Tax Act and the Companies Act. The Finance Act of 2016 makes changes in the Foreign Contribution (Regulation) Act of 2010.

The amendment to Representation of the People Act allows political parties to skip recording donations received by them through electoral bonds in their contribution reports to the ECI.

The amendments introduced to the Income Tax Act allow anonymous donations. Donors to political parties are not required to provide their names, address or PAN if they have contributed less than Rs. 20,000. The Election Commission notes that many political parties have been reporting a major portion of the donations received as being less than the prescribed limit of Rs. 20,000.

The Finance Act of 2016 allowed donations to be received from foreign companies having a majority stake in Indian companies.

Observations by Election Commission

The Election Commission of India called these measures as a retrograde step and the ECI has no way to ascertain whether the donations were received illegally by the political party from government companies or foreign sources.

The Election commission also expressed concerns that these amendments would pump in black money for political funding through shell companies and allow unchecked foreign funding of political parties in India which could lead to Indian politics being influenced by foreign companies.

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