UPSC CSE Current Affairs — 26 April 2026

RBI cancelled Paytm Payments Bank's licence in January 2024, ordering winding up under Banking Regulation Act Section 22(3). The central bank cited four major violations: affairs detrimental to depositors' interests, prejudicial management character, no public purpose served, and non-compliance with license conditions. This marks the first payments bank licence cancellation since the category's 2015 launch. Depositors retain deposit insurance coverage up to ₹5 lakh per account through DICGC.

The Paytm Payments Bank cancellation represents RBI's strictest regulatory action against the payments bank model, highlighting systemic governance failures. Under Section 22(3) of the Banking Regulation Act, RBI can cancel licenses when banks operate detrimentally to depositor interests or violate license conditions. The decision stems from repeated non-compliance with KYC norms, irregular account opening practices, and governance lapses that emerged during RBI inspections. This action significantly impacts India's digital payments ecosystem, as Paytm was among the largest payments banks by transaction volume. The winding up process involves DICGC ensuring deposit protection while RBI appoints liquidators to settle affairs. This precedent strengthens RBI's supervisory framework over new-age banks and reinforces that regulatory compliance cannot be compromised regardless of technological innovation or market position. The case demonstrates RBI's commitment to maintaining banking system integrity even at the cost of disrupting popular fintech services, setting clear expectations for other payments banks regarding governance standards and regulatory adherence.

Ashok Kumar Lahiri, veteran economist and former Chief Economic Adviser (2002-2004), currently serves as vice-chairman of Niti Aayog. Previously held positions at IMF, World Bank, and Asian Development Bank. Known for expertise in fiscal policy, public finance, and economic modeling. Has authored numerous papers on Indian macroeconomic policy. His appointment brings extensive international experience to India's premier policy think tank, focusing on transforming India into developed nation by 2047.

Lahiri's appointment as Niti Aayog vice-chairman reflects government's emphasis on technocratic leadership for economic transformation. His extensive international experience at multilateral institutions provides crucial perspective for India's development strategy. As former CEA during NDA-I, he understands policy formulation challenges and implementation gaps. His expertise in fiscal consolidation, debt sustainability, and macroeconomic modeling becomes critical as India navigates post-pandemic recovery while maintaining fiscal discipline. Niti Aayog's role in coordinating between Centre and states, designing flagship schemes, and monitoring SDG progress requires someone with deep understanding of federal fiscal dynamics. Lahiri's academic background and policy experience position him to bridge theoretical frameworks with practical governance. His tenure coincides with India's G20 presidency outcomes implementation and preparation for becoming developed economy by 2047. The appointment signals continuity in economic policy direction while bringing fresh perspectives on emerging challenges like climate finance, digital economy regulation, and social sector reforms.

West Asia conflict has triggered global geoeconomic disruption, affecting energy markets and supply chains. India faces opportunities amid the shifting multipolar world order, with potential for increased geopolitical leverage through strategic positioning. Oil prices volatility impacts India's energy security and fiscal calculations. The conflict underscores India's need to diversify trade partnerships and strengthen domestic manufacturing capabilities while navigating complex international relationships in an increasingly fragmented global economy.

The West Asia conflict represents a paradigm shift from traditional geopolitics to geoeconomics, where economic statecraft becomes the primary tool of international relations. For India, this disruption creates both challenges and unprecedented opportunities. Rising energy costs strain India's current account deficit, but the global supply chain realignment offers chances to emerge as an alternative manufacturing hub. India's strategic autonomy policy gains relevance as nations seek reliable partners outside traditional Western-dominated frameworks. The conflict accelerates de-dollarization trends, potentially benefiting India's rupee trade initiatives with partners like Russia and Iran. India's diplomatic positioning as a bridge between conflicting blocs enhances its bargaining power in multilateral forums. The disruption also validates India's emphasis on Atmanirbhar Bharat, as global dependencies expose vulnerabilities. Energy security becomes paramount, pushing India toward renewable energy acceleration and diversified import sources. This moment tests India's ability to leverage its demographic dividend, technological capabilities, and strategic location to capture global value chains shifting away from conflict-affected regions.