The Year Gone By: Key Highlights of 2023

In 2023, India experienced noteworthy transformations in its digital and financial landscape. Characterized by a series of regulatory updates that redefined our approach to accessing, managing, and interacting with data, we integrated digital public goods like Aadhaar, UPI, CoWIN, DigiLocker, etc., into our daily routines. As a trailblazer in spearheading digital public infrastructural advancements nationwide, Protean is well-positioned to support these changes and equip individuals with the latest tools and information essential for thriving in this dynamic ecosystem.

In this comprehensive blog, we will discuss the most critical regulatory updates in 2023 and Protean’s role in this change.

PAN Regulatory Updates 2023

The Permanent Account Number for financial transactions underwent several significant changes in 2023. Here are some of the most important regulatory updates regarding PAN Card witnessed in the year 2023:

1. Aadhaar-based PAN linking became mandatory in 2023, aiming to streamline tax filing process and reduce fraud. While some media outlets expressed privacy concerns, others highlighted the potential for improved efficiency and transparency. 
2. The Permanent Account Number (PAN) underwent a significant update in 2023, becoming mandatory for all financial transactions exceeding ₹2 lakhs. This move, lauded by the Finance Minister as a step towards transparency and curbing financial crimes, has implications for both individuals and businesses, requiring increased vigilance and awareness of PAN requirements. 
3. The Union Budget 2023-24 legalised PAN as the primary business identifier through the Finance Act, 2023. Businesses can now use PAN as a singular identifier for streamlined clearances and approvals in the national single window system, simplifying the process.

APY and NPS Regulatory Updates 2023

Protean is the designated Central Recordkeeping Agency (CRA) for the Atal Pension Yojana (APY) and the National Pension System (NPS). Following are the most important regulations that were updated in 2023:

1. Previously, before October 2023, subscribers of the scheme could withdraw lump sum amounts up to 70%, with a minimum withdrawal of 10% per year.  Now, they can withdraw 60% of their pension corpus as a lump sum every month, quarter, or year until they are 75 years old. 
2. To use the Systemic Lumpsum Withdrawal (SLW) option, subscribers must have at least ₹5 lakhs in their account.
3. Subscribers who want to use the SLW option will need to go through a “penny drop” verification process to make sure their bank account information is correct.
4. Subscribers can even upload the necessary documents electronically for faster withdrawals. 
5. When subscribers retire, they can get to choose from multiple annuity providers. This gives them more flexibility and choice regarding their retirement income.
6. The PFRDA has made it easier for subscribers to exit the NPS Lite scheme. Subscribers can now exit the scheme after 3 years, instead of the previous requirement of 5 years.
7. They can now get a consolidated account statement showing all their NPS accounts in one place. This makes it easier for subscribers to track their progress.
8. The accrual period for calculating APY has been standardised to a daily basis, ensuring a more accurate reflection of returns earned over shorter intervals.
9. APY calculation methodology has been made more transparent, with detailed disclosures of interest rates, fees, and other charges.

ONDC Regulatory Updates 2023

The Open Network for Digital Commerce (ONDC) emerged as a game-changer in e-commerce, aiming to break the dominance of major platforms and provide a level playing field for smaller businesses. 

Within this exciting revolution, Protean has emerged as a key player, playing a crucial role in shaping the future of ONDC. Protean operates as an ONDC technology service provider, offering various solutions that make the platform function smoothly. 
Here are some of the key highlights of ONDC after one year of its operations:

1. The Indian e-commerce industry is growing at a CAGR of 23% and it will touch $350 Billion by 2030, making India the 3rd largest online retail market globally.
2. Over the next 5 years, the share of modern retail (including e-commerce) in the Indian retail market will increase to 30%. This indicates a significant shift from the traditional unorganised market.
3. Backed by the government, the Open Network for Digital Commerce (ONDC) is a democratised e-commerce in India. It is expected to level the playing field for small and medium businesses by providing an open platform for them to sell their products online.

Here are some of the most important regulatory updates of ONDC in 2023:

1. The ONDC Seller App was launched in 2023, allowing sellers to easily register and manage their product listings on the ONDC network.
2. Its buyer app standards were finalised in 2023, paving the way for the development of interoperable buyer apps that can access products from all sellers on the ONDC network.
3. The beta network of the ONDC platform was launched with a limited number of sellers and buyers participating.

eKYC Regulatory Updates 2023

eKYC (electronic Know Your Customer) is a digital process for verifying a customer's identity using electronic data sources. Protean is a provider of eKYC services. They are authorised by UIDAI (Unique Identification Authority of India) as an Authentication Service Agency (ASA) and KYC Service Agency (KSA). This means they can offer eKYC services to businesses and organisations that need to verify the identities of their customers.

Here are all the eKYC regulatory updates in 2023:

1. UIDAI (Unique Identification Authority of India) introduced the Aadhaar Lite feature, allowing users to share limited information (name, date of birth, and gender) for eKYC purposes. This aims to balance privacy concerns with convenience.
2. Visiting bank branches for updating 'Know Your Customer' (KYC) details is only necessary if valid documents have already been submitted and the address remains the same. In such cases, you can submit a self-declaration through email, registered mobile numbers, ATMs, or other digital channels.

Account Aggregator Framework

Protean's "SurakshAA" platform facilitates secure data sharing with user consent, helping buyers access various crucial financial information necessary for informed purchase decisions. The Account Aggregator (AA) framework, launched in March 2023, allows users to control and share their financial data with regulated entities through consent. This could potentially revolutionise eKYC, as users have complete control over granting access to their financial data for verification, eliminating the need for separate Aadhaar-based eKYC.

Here are some of the most recent developments in the Account Aggregator framework:

1. Protean has launched Account Aggregator 2.0 at the Global Fintech Fest 2023 in Mumbai which was its 1st Global Hackathon. The initiative aims to accelerate the adoption of the Account Aggregator ecosystem as a transformative Digital Public Infrastructure (DPI) for India.
2. Protean emphasises its commitment to creating Digital Public Infrastructure for India. The Account Aggregator framework is serving as a consent framework empowering individual with control over their data for availing various financial services.
3. The account aggregator’s broader contributions include regulatory tech services, authentication services (eKYC, Aadhar Authentication, eSign), and support for open digital building blocks like ONDC.

Information Security Regulatory Updates 2023

Following is one of the most important 2023 regulations in the InfoSec industry: 

The Indian Central Government on August 11, 2023, introduced the Digital Personal Data Protection Act (DPDP). According to the regulations of the act, it will protect the data principals and the role of data trustees. This act borrows a lot of its regulations from the General Data Protection Regulation (GDPR) of the European Union. 

Cloud Services Regulatory Updates 2023

Here is a list of the key Regulatory updates in the field of Cloud Services:

1. According to the back reference of the Department of Telecommunication in April 2023, it had come to a prima facie conclusion that the MeiTY was not in favour of creating a light-touch regulatory framework because this industry is at an initial phase. Establishing this framework will significantly limit the country’s cloud ecosystem growth. 
2. The MeiTY has told the Department of Telecommunication that, cloud computing is an IT service, not a telecom service. 
3. The TRAI asserted that they are in the position of making recommendations to the DoT in regards to cloud services in India. 

Development of Digital Public Infrastructure in India

India has emerged as a pioneer in democratising technology through the development of Digital Public Goods (DPGs) – freely accessible digital platforms designed for the common good. 

Notably, Protean has played a pivotal role in revolutionising India's Digital Public Infrastructure for the past 28 years. Collaborating with both the government and private sector, the company has spearheaded innovative, citizen-centric e-governance solutions across sectors like healthcare, education, and financial inclusion. 

Protean's commitment lies in creating population-scale digital public goods, fostering social and financial inclusion, and advocating for technology that serves the greater good. This approach has resulted in substantial cost savings, heightened transparency, accountability, and expanded market access, contributing to India's transformative technological landscape.

Here are some of the most important DPI-related regulatory updates that will help to build the infrastructure:

1. In the 2023 G20 summit, there were interventions to create a more legally sound regulatory framework that will help to increase Jan Dhan Yojana account ownership, and leverage Aadhaar for identity verification.     
2. In the last few years the India Stack has helped in the digitisation and simplification of KYC procedures, which in turn assisted banks that use e-KYC to lower their compliance cost from $0.12 to $0.06. This cost decrease has made banks offer more attractive services for lower-income clients. 
3. Aligned with the financial inclusion strategies and policies of the G20 Summit, the UPI-PayNow interlinking has been operationalised since February 2023. It is expected that this step will make cross-border payments significantly transparent, cheaper and faster. 
4. On 22nd November 2023, to implement the Digital Public infrastructure in the Global South, Honourable Prime Minister Narendra Modi, proposed to set up a Social Impact Fund. India has committed an initial amount of 25 million USD to this cause.

Conclusion

2023 was a year of significant change in the financial world, and Protean stands at the forefront of this transformation. By staying aware of regulatory updates, embracing new technologies, and prioritising user needs, Protean can act as a guiding star for individuals. This helps individuals navigate the ever-evolving financial landscape and achieve their financial goals.

Protean goes beyond regulatory compliance, offering a diverse range of contributions. Through the adoption of advanced technologies such as Account Aggregator, InfoSec solutions, and Cloud Services, they empower individuals to navigate the financial landscape confidently.