INDIA Law and Practice Contributed by: Shilpa Mankar Ahluwalia, Himanshu Malhotra and Purva Anand, Shardul Amarchand Mangaldas & Co
for all privately owned cryptocurrencies in India after its launch. 10.12Non-Fungible Tokens (NFTs) The regulatory landscape surrounding NFTs is unclear. However, NFTs have been recently rec - ognised as a subclass of virtual digital assets and subject to the same taxation regime.
to access authenticated identity documents and certificates. Data Layer An account aggregator (AA) is an NBFC that facilitates the retrieval or collection of financial information pertaining to a customer from finan - cial information providers on the basis of explicit consent of the customer. The financial informa - tion shared through the AA is not stored with the AA and is to be used solely for providing it to the customer or consented financial informa - tion user. 11.2 Concerns Raised by Open Banking Data protection remains the biggest concern surrounding open banking. Market players in India are generally gearing up for the DPDP Act to become effective. Banks, financial institu - tions, technology platforms and fintech play - ers will need to align their existing systems and processes to comply with the detailed consent architecture prescribed in the DPDP Act and with the restrictions on the use, processing and storage of data that are mandated by the DPDP Act. With the expansion of digital payments, fraudu - lent transactions through compromised creden - tials, identity theft and phishing attacks have been on the rise in India. A typical fraud involves the perpetrator of fraud getting illegal access to a card, UPI pins or other payment credentials (such as illegal tapping on unsecured internet networks, phishing attacks, spam and fraudulent calls to retrieve sensitive payment credentials like card numbers, PINs, OTPs and passwords) and then using them to make payment transac - tions. 12. Fraud 12.1 Elements of Fraud
11. Open Banking 11.1 Regulation of Open Banking
India has adopted a distinctive approach to open banking. It has created a comprehensive DPI and associated standards, collectively known as the “India Stack” . The India Stack has been developed in lay - ers over the past decade, with a proactive role played by regulators: Identity Layer The Aadhar digital identity system facilitates identity verification and tracing of individuals’ particulars across various datasets. The RBI has mandated Aadhar-interlinked KYC practices for all REs through the KYC Master Direction. Payments Layer UPI, Aadhaar-enabled Payment System, and Aadhar Payments Bridge create a fully inter - operable payment system that is subject to the supervision of the NPCI. Documents Layer “Digilocker” is a cloud- based platform which enables registered governmental authorities to issue and citizens
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