Question

Banks, Citizens, and the Government

Discussion Topic

Individuals and companies use banks as a place to store money, as well as to borrow money. To what extent should the government put restrictions on banks and individuals or companies with regard to tracking and regulating money exchanges?

How has electronic money transfer effected our lives?

Answer 1

Thechnology has had a very big effect on almost every area of our lives. Electronic banking is perhaps one of the biggest changes that has ever happened in the banking sector. Previously transferring money involved going to the bank physically and making the transfer, but now that is not the case. Today you can easily move money by just keying in your account details online to access your bank account and then making the transfer. This allows you to easily and quickly transfer, manage or check your money from virtually anywhere.

In India, over 80 percent of adults have a bank acount and around 80 percent of the country's nearly one million bank account are linked to Aadhaar, the biometric ID system. That has enabled the government to shift to digital transfers for many benefit programes, from payments to food subsidies. In addition to existing programes , India can use this infrastructure immediately to distribute payment to all Aadhaar-linked accounts as part of COVID-19 response. This has already begun , with payments initiated to 200 million women holders of Jan- Dhan accounts, a finanical account used for government benefits. A third phase could be to invite others needing assistance to link an account to Aadhaar if they have already not done so and use the expanded coverage to deliver other forms of social protection as the rerponse to the COVID-19 crisis evolves over the medium and long term.

The COVID-19 Pandemic is still evolving, and so is the response. For developing countries to minimize the economic imapct, they will need to move fast to put in place mechanisms to deliver social assistance. Thechnology can help, and countries that have bulit more robust payment infrastructure will find delivering that assistance easier - but all countries will need to work to help protect the lives and livelihoodes of their citizens in the fact of this pandemic.

• Government regulation can affect the financial industry in positive and negative ways.
• The major downside is that it increases the workload for people in the industry who ensure regulations are adhered to .
• On the positive side, some regulations help hold companies accountable and incease internal controls ,such as the 2002 Sarbanes - Oxley Act.
• The SEC is the main regulatory body for the stock market, protecting investors from mismanagement and fraud, which boostes investor confidence and investment.