Page 25 - Banking Finance May 2024

ARTICLE

Allows for real-time fund transfers. Advantages of CBDC :
Features multiple layers of security. Faster and more efficient financial transactions

Eliminates the need for cash or physical cards. Improved access to and use of money, especially in
Supports QR code scanning and virtual payment remote areas
addresses. Additional form of stable, inflation-resistant money.

Widely accessible and supported by many major banks
in India. Disadvantages of CBDC :
Offers generally low or no-cost transactions. Complex implementation and infrastructure
requirements
Standardized system for interoperability and ease of
use. Privacy and security concerns
Capable of fulfilling a wide range of payment purposes. Potential displacement of traditional financial

Constantly evolving with new features added regularly. institutions
Risk of illegal use.
Disadvantages of UPI:
Only available in India. Conclusion :
May not be supported by all banks and merchants. In conclusion, CBDC is a digital form of fiat currency issued
by a central bank, while UPI is a platform for electronic
Requires internet connectivity.
transactions using existing bank accounts. CBDC can be used
Transactions are not reversible. as a means of payment and store of value, while UPI
Vulnerable to technical issues or outages. facilitates electronic transactions. CBDC is backed by the
Requires a bank account and smartphone. central bank, while UPI is not. Overall, the main difference
between the two is that CBDC is a digital currency and UPI
May require sharing sensitive financial information.
is a payment platform.
May not be accepted by all merchants or vendors.
Subject to government regulations and policies. Reference:
Potential risks and unknowns associated with its use Mint,Linked in,The Indian Express,Paytm

Monsoon likely to be 'above normal': IMD

India will likely experience 'above normal' monsoon (June-Sep) rainfall with fairly good distribution in most parts of
the country, the India Meteorological Department (IMD) said recently. If the forecast comes true, good rainfall is
expected to positively impact agriculture, boosting farm operations and driving the economy with higher rural de-
mand.

Though in certain areas, including Odisha, northeastern states and parts of Jharkhand, Chhattisgarh and southern
West Bengal, monsoon may be below par, 'above normal' rainfall is likely in the monsoon core zone (large areas of
central India where agriculture in many areas depends on monsoons), Punjab and Haryana.
"Quantitatively, the seasonal rainfall over the country as a whole is likely to be 106% of long period average (LPA)
with a model error of +/-5%," said M Ravichandran, secretary in the ministry of earth sciences, while jointly releas-
ing the monsoon forecast with IMD chief Mrutyunjay Mohapatra.
Monsoon rainfall between 104-110% of LPA (4% to 10% above average rainfall of 87cm) is categorised as 'above
normal'. IMD's forecast probability shows there is 31% chance of 'above normal' rainfall and 30% chance of 'excess'
rains (above 110%) this year.

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