Question 36 from UPSC CSE 2019 - Current Affairs

Question

Consider the following statements:
1. They shall ensure that entire data relating to payment systems operated by them are stored in a system only in India.
2. They shall ensure that the systems are owned and operated by public sector enterprises.
3. They shall submit the consolidated system audit report to the Comptroller and Auditor General of India by the end of the calendar year.
Which of the statements given above is/are correct?

IASCODEX · Accepted Answer

Correct Option: A. 1 only

Strategy: Focus closely on the regulatory language and identify which statement is officially mandated by the RBI. Statement 1 matches RBI's explicit directive that all payment system data be stored in India. Statement 2 suggests a requirement of only public sector operation, which is not mandated for payment system providers. Statement 3 introduces the Comptroller and Auditor General; however, RBI requires audit reports to itself, not to CAG. With careful keyword scrutiny, only Statement 1 is correct.

Key Info: The Reserve Bank of India (RBI) in its 2018 circular on 'Storage of Payment System Data' mandated that all payment system providers store the entire data relating to payment systems operated by them only in India. This includes end-to-end transaction details and data processed as part of payment instructions. For cross-border elements, foreign data storage is permitted as required, but only for the foreign leg. There is no requirement that payment systems be owned or operated solely by public sector enterprises; private and foreign entities can also operate such systems, subject to RBI guidelines. Audit compliance of the data localization requirement must be certified by CERT-IN empaneled auditors, and the System Audit Report (SAR) must be submitted to the RBI. There is no provision for submitting SAR to the Comptroller and Auditor General (CAG) of India; oversight remains strictly with the RBI per its regulatory jurisdiction. The purpose of these directives is to enhance security, data sovereignty, and regulatory oversight of digital payment systems in India.

IASCODEX · Answer

Option B: 1 and 2 only

IASCODEX · Answer

Option C: 3 only

IASCODEX · Answer

Option D: 1, 2, and 3