Govt plans regulator for ecommerce
DRAFT POLICY Mandatory data localisation on the table NEW DELHI:
A national regulator for e-commerce, mandatory data localization and tax sops for data centres are part of an upcoming legislation governing all aspects of electronic commerce in the country, the draft of a national policy showed. The regulator will ensure consumer protection and compliance with foreign investment caps in e-commerce.
The national policy framework in this regard, prepared by a task force headed by commerce secretary Rita Teaotia, was discussed on Monday by a think tank, headed by industry minister Suresh Prabhu, set up for the purpose. The draft will be further fine-tuned and sent for inter-ministerial consultations.
The government has been striving to build consensus on an e-commerce policy to mitigate the policy vacuum on key issues related to the sector as well as to effectively respond to a proposal for multilateral discipline in e-commerce at the World Trade Organization as various government departments have contradictory views on the matter.
While the draft e-commerce policy strongly recommended data localization, it has suggested a two-year sunset period for the industry to adjust before localization rules become mandatory. It has also suggested direct and indirect tax incentives as well as according infrastructure status to data centres to encourage domestic data storage.
The move will help private sector companies comply with the norms laid down by the Srikrishna committee on data localization. A sunset clause defining maximum duration of differential pricing strategies by e-commerce firms to be framed A law/regulation to govern unsolicited commercial e-mails would be framed Tax sops for incentivizing domestic data storage in India
Data generated by users in India from various sources including e-commerce, to be stored exclusively in India
The 10-member expert group headed by former Supreme Court judge B N Srikrishna, which submitted the draft bill titled The Personal Data Protection Bill, 2018, to the ministry of information and technology on Friday necessitates firms to store a copy of a user’s personal data in India.
“It is a very encouraging move to give some time to the domestic industry to come to terms with the data storage procedures before actually imposing the legislation. However, it is important to carefully examine which companies actually qualify for this,” said Amber Sinha, lawyer and senior programme manager at Centre for Internet and Society (CIS), a Bengaluru-based think tank.
Both the draft e-commerce policy and the Srikrishna panel have suggested that the government would have access to data stored in India for national security and public policy objectives subject to rules related to privacy, and consent.
To encourage micro, small Government would have access to data stored in India for national security and public policy objectives
and medium enterprises, the draft e-commerce policy recommends allowing them to follow inventory-based models for selling locally produced goods through an online platform.
Such companies may also be allowed up to 49% foreign investment. Currently, e-commerce platforms are allowed only to follow marketplace model where 100% FDI is allowed. However, the government has so far not permitted any FDI in inventorybased models.
In what could worry e-commerce firms, the draft policy recommends that the Competition Commission of India consider suitably amending the thresholds so that competition-distorting mergers and acquisitions below the existing threshold also get mandatorily examined by it in case of e-commerce entities. “For such entities, thresholds based on other variables (such as access to data) which are more relevant in this area, would be considered,” it added.
Shrutika Verma contributed to this story.
: Reserve Bank of India (RBI) has sought details of stressed loan accounts in which banks’ asset classification and provisioning diverge from the norms set by the central bank, according to two top executives of state-run banks.
The regulator has identified and sent a list of stressed loan assets to banks after the completion of its annual risk-based supervision in July for the year ended 31 March. Banks are currently in the process of submitting their response to the regulator on the divergences, the bankers cited earlier said on condition of anonymity. Mint couldn’t ascertain the number of stressed accounts identified by RBI as each bank has received a separate list. During the supervision, RBI found that banks have delayed classifying accounts as non-performing assets (NPAs), said the banks cited earlier.
This could mean banks will have to make higher provisions against these loan accounts this financial year. “There will not be an increase in bad loans this year as most banks have finished bad loan recognition. RBI’s queries are more on the provisioning requirement which banks need to make against some of these accounts,” said one of the two bankers. RBI had told banks to make a disclosure in the “notes to accounts” if additional gross NPAs identified by RBI under its asset quality review were greater than 15% of the incremental gross NPAs for the period.
Last year, banks had reported a sharp rise in bad loan divergences after RBI completed its annual inspection for the fiscal 2016-17. This led to several banks, including SBI, Axis Bank, HDFC Bank and Yes Bank, posting huge losses.
MUMBAI