Read the following text carefully : According to NITI Aayog, India has a technological advantage to facilitate digital banks. There is a need for creating a regulatory framework for promoting this. NITI Aayog, in its report titled "Digital Banks : A Proposal for Licensing and Regulatory Regime for India", offers a template and roadmap for a digital bank licensing and regulatory regime for a country. India's public digital infrastructure, especially Unified Payments Interface (UPI) has successfully faced this. With Aadhar, India is at the cusp of operationalizing its own open banking framework. This demonstrates that India has the technology stock to fully facilitate digital banks. Digital banking allows a user to set up automatic payments for regular utility bills. Digital banking enables fund transfers to reduce the risk of counterfeit currency. By promoting a cashless society, digital banking restricts the circulation of black money. On the basis of the given text and common understanding, answer the following questions : (a) Which institution has been replaced by NITI Aayog in India ? Who is the ex-officio Chairman of NITI Aayog ? (b) State and discuss any two main advantages of digital banking.

Question

Accepted Answer

Based on the passage about digital banks:

1. India has a technological advantage to facilitate digital banks due to:
- Large smartphone penetration
- Growing internet connectivity
- Aadhaar-based digital identity system
- UPI and digital payment infrastructure

2. Need for regulatory framework:
- To ensure security and privacy of digital transactions
- To protect consumers from fraud
- To maintain financial stability
- To promote innovation while ensuring compliance

3. Benefits of digital banks:
- Financial inclusion of unbanked populations
- Reduced operational costs
- 24/7 access to banking services
- Faster and more efficient services

The passage highlights India's potential to become a leader in digital banking, provided appropriate regulatory frameworks are established to support innovation while ensuring consumer protection and financial stability.