After seeing the rise in digital transactions, RBI (Reserve Bank of India) in April made a directive stating that all data related to online payments must be retained in the country only. No outside payment portal or operator is allowed to access the data of the country. In the directive, the central bank gave foreign payment operators a time period up to October 15, 2018, for compliance.
The aftermath of the directive was upheaval and constant efforts of payment companies to dilute the directive. For days, companies had been concertedly approaching the government to help extend the deadline or dilute it. However, the regime has not interfered so far and has also supported RBIs decision.
How Has Payment Operators Reacted To the Directive?
The localization of the data directive has been acknowledged by many Indian operators whilst some companies disapproved the decision. According to Indian payment companies, the extracted data is processed and retained at different geographical locations and in turn, causes obscurity in abundance. Further, it was unveiled that processing Indian data outside the country leaves an impression on the foreign servers and therefore, gathers private information of native Indians.
In the end, an assertion was made that the country incorporates a huge potential and substantial workforce to make the shift happen. Herein, the crux is the countrys eminent technology sector which has advanced over the years and seeks to reach global standards.
Positive Impacts of the Directive
RBIs directive has brought a hope in the economy when external threats are looming the industry. It can help yield out positive outcomes and also, increment the fiscal growth. Other than this, there are various others optimistic results that the economy can receive:
Through the directive, the central bank tries to subdue the digital industry that is massively growing in the country. The ongoing digital transactions are one of the boosting agents of the industry and thus, to amplify it the central bank is taking this measure.
Actually, the increase in digital transactions is good for the economy but it also grows chances of swindling. Thus, the localization of data would mitigate this process and assist in keeping a check.
The directive not only protects the private date from misuse but also helps create new job opportunities in India. Owing to which, a steady growth in employment rate can be seen in the next few months. Furthermore, it is assumed that more investment could be made in the digital infrastructure of the country so as to escalate it.
The recent news of Danske banks money laundering has surprised the entire world. The bank which was one of the prominent banks in Denmark has been swindled and thus, a substantial amount of money is wiped out from the country. The swindled money has reached 12 digits till now. This case has opened eyes of many financial institutions and therefore, the central bank is trying to regulate the market through this directive. The localization of data directive would prevent invaders to breach or misuse private data.
These impacts state that the central bank is actively participating to shore up the economy.