NRIS to have easier access with UPI onboarding
Question: Many non-resident Indians when they come to India find it expensive to use international credit cards. They are unable to access funds lying in the Non-resident (External) accounts in India as their credit cards are not linked with these accounts. Is anything being done to deal with this situation?
With effect from May 1, 2023, NRIS based in ten countries, namely, the UAE, UK, USA, Oman, Qatar, Saudi Arabia, Australia, Canada, Singapore and Hong Kong, will be able to access their Non-resident (External) accounts through their credit cards. The National Payments Corporation of India is proposing to extend the Unified Payments Interface (UPI) facility to NRIS who are based in these countries. This will allow international numbers from these countries to be used for onboarding UPI. Banks have been directed to be ready by April 30 this year so that international numbers will be able to transact on the UPI platform. This would provide the facility to NRIS and overseas Indians resident in these ten countries to purchase goods and services when they visit India and transact with millions of Indian merchants who are currently on the UPI platform. Thus, the need for use of international credit cards will be eliminated.
Overseas Indians who are currently trading in securities in the secondary market face difficulties when the funds are misused by stock brokers and as a result defaults are committed by investors. This problem needs to be sorted out by Indian authorities.
Under the existing framework, investors’ funds pass through stock brokers before reaching the Clearing Corporation (CC). Likewise, the pay-out released by the Clearing Corporation follows a similar cycle of passing through stock brokers before reaching the investor. While the clearing corporations furnish final settlement instructions to their members at the end of each day, it is the stock broker who settles obligations with investors. This leads to malpractices by some brokers. In order to deal with this challenge, the Securities & Exchange Board of India is proposing to introduce a scheme for blocking of funds for trading in secondary markets. This proposal is similar to Application Supported Blocked Amount, which is the system currently available for the primary market. This ensures that money received by a broker from an investor can be used only when an allotment takes place. The Securities and Exchange Board of India’s (Sebi) proposal is meant to ensure that the blocked funds would eliminate the need to transfer the funds to the stock broker until the settlement is made. This move will prevent the misuse of investors’ funds by stock brokers. It would also ensure that the consequence of a broker’s default would not be passed on to the investor.
There were some press reports that audit firms are not complying with the requirement to record the signoff dates on the completed work papers. I do not know whether there is any authority in India, other than the Institute of Chartered Accountants, which exercises any control over auditors in respect of the audit work.
Apart from the Institute of Chartered Accountants of India (ICAI), there is the National Financial Reporting Authority (NFRA), which is the Indian counterpart of the Public Company Accounting Oversight Board (PCAOB) which is in the US. In order to ensure that audit files cannot be tampered with, NFRA is contemplating the use of the Digilocker. This will make it difficult for auditors to manipulate records. Under the present regulations, auditors are required to complete their audit files in a time bound manner. The NFRA is empowered to exercise control over audit firms which audit public companies. The regulator is therefore proposing to mandate that the audit files should be archived electronically with time stamps to be placed on the documents. Data once filed cannot be deleted and records of any additional data obtained will have to be maintained. NFRA has powers to monitor and enforce compliance of accounting and auditing standards. The authority is also mandated to oversee the quality of service rendered by audit firms.