E-rupee project has been introduced in the pilot stage
By HP Ranina/NRI Problems
Question: It was earlier announced by the Reserve Bank that the e-rupee would be introduced to ensure ease of payments. Has this actually happened and is it successfully working?
ANSWER: The Central Bank Digital Currency or the e-rupee project has been introduced in the pilot stage. Certain banks like the State Bank of India, Canara Bank and a few reputed private banks have been authorised to conduct CBDC transactions. In 2023, one million transactions per day have been recorded, and in the current calendar year it is expected that 2 million transactions per day will be undertaken. At present, some state-run banks are providing benefits to employees using the e-rupee. This has increased the volume of transactions. Earlier the RBI began using wholesale CBDC in the government securities market. This has now been extended to the call money market. The retail e-rupee pilot project is now on track and more and more individual customers are participating therein. The object of promoting the CBDC is to position e-rupee as one of the payment options. The Indian government wants the CBDC to be a key instrument with the object of cutting transaction costs. This would specially be useful for promoting cross border payments, remittances and other international transactions.
Question: My son is working in a technology firm in the United Kingdom. He is now being transferred to the Indian subsidiary which requires him to enter into a non-compete agreement in case he decides to leave the company in future. I seek your advice whether he should do so. What are the implications?
ANSWER: Many companies in the technology field are insisting that employees sign a contract which has restrictive covenants embodied therein. Most Indian companies have a non-compete clause in the employment agreement which require employees to refrain from joining a competing company in the same field for a period of six to twelve months. Some companies have a clause in the agreement that an employee, after resignation, cannot join such companies which are specifically mentioned in the agreement. Under the Indian Contract Act, an agreement which is in restraint of trade or business is void and therefore not enforceable in law once the employment comes to an end. However, if at the time of resignation or termination of service a monetary compensation is paid by the existing employer to such employee in consideration of his agreeing to the non-compete stipulation, such contract would be binding. If the employee breaches it, he would be required to pay the stipulated amount in the contract to the erstwhile employer. The main purpose of the non-compete agreement is to protect the interest of the employer who apprehends leakage of confidential information or passing of future business plans. Some companies therefore stagger the payment of compensation in suitable instalments spread over the period for which the restrictive covenant applies. The compensation so paid is liable to tax in India.
Question: There is a growing concern that ransomware attacks are increasing worldwide. Which are the industries most prone to this and what steps are being taken by government agencies to counter these threats?
ANSWER: According to a recent report of Cyble, an international firm of repute, ransomware attacks have spread across 117 countries and the brunt of the attack has been towards American, British, Canadian, German and Italian organisations. Manufacturing, construction and professional services have been the attacked sectors.
The most brutal attacks have been faced by energy and utility sectors, transportation and logistics, as well as healthcare. Law enforcement agencies of different countries are grappling with the issue of countering ransomware attacks which increased to 4,200 in 2023 from 2,200 in 2022. The proliferation of artificial intelligence technology is enhancing the potency of these attacks. AI driven advancements are enabling attackers to design personalised and convincing social engineering tactics. The use of QR codes has also increased the danger of such attacks. Scammers are using ‘quishing’ tactics by sending emails with QR codes to deceive recipients. Pretending to represent reputable companies, these emails falsely mention issues like ‘failed online payments’, urging victims to scan QR codes to re-enter credit card details. Therefore, the best precaution is to avoid scanning QR codes or clicking on suspicious links from unknown sources.
HP Ranina is a practising lawyer, specialising in tax and corporate laws of India.