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Tag: Reserve Bank of India

  • Following the RBI Repo Cut, Banks Begin to Lower Loan Rates

    After the RBI lowered the repo rate by 25 basis points to 6% on April 9, a number of banks adjusted their external benchmark lending rates. With effect from April 11, Indian Bank said that it will lower its repo-linked benchmark lending rate (RBLR) from 9.05% to 8.7%. With effect from April 10, PNB reduced its repo-linked lending rate (RLLR) from 9.1% to 8.85%. With effect from April 9, Bank of India has changed its RBLR from 9.1% to 8.85%. As of April 10th, UCO Bank has lowered its lending rate to 8.8%.

    The RBI declared that it would keep excess liquidity in the system after the monetary policy committee unanimously decided to lower interest rates. Further, the committee also changed the policy stance to one that is more accommodating. All floating-rate loans must be linked to an external benchmark by banks, per RBI regulations. It is anticipated that the repo rate cut will lower lending rates, but because the cost of capital has not decreased as quickly, banks’ net interest margins may be compressed.

    Move Will Benefit Both Existing and New Borrowers

    Both new and current borrowers of these banks will profit from this decision. Other banks are expected to make similar statements soon. Following the RBI’s reduction in the short-term lending rate (repo rate), these public sector banks verified the modification in loan rates in separate notifications to the stock markets.

    The RBI Governor also declared that the monetary policy stance would shift from neutral to accommodating. Because of the shift in policy, house loan borrowers may expect further reductions in repo rates and, as a result, reduced home loan interest rates. The RBI had not lowered the repo rate in five years, the previous time being in the February policy.

    RBI May Further Cut the Rate

    According to the State Bank of India’s Ecowrap report, a significant drop in the cost of food and drink caused India’s CPI inflation to drop to a 7-month low of 3.6% in February 2025. Additionally, according to the research, core inflation may range between 4.2% and 4.4%, while inflation for FY26 is anticipated to be between 4.0% and 4.2%. In April and August of 2025, the central bank may lower interest rates one after the other, with a minimum 75 basis point cumulative rate reduction anticipated. The United States recently levied a 26% tariff on imports from India. According to media reports, this will cut India’s GDP growth for FY 2025–2026 by 20–40 basis points, possibly bringing it down from the RBI’s initial prediction of 6.7% to about 6.1%.

    In order to combat economic pressure, this might encourage the RBI to further reduce interest rates. According to DK Srivastava, Chief Policy Advisor at EY India, the RBI’s decision to adopt an accommodative attitude and reduce the policy rate by 25 basis points for the second consecutive time shows that it is prepared to protect India’s chances for GDP development. It is anticipated that the RBI would continue the downward rate cycle by lowering the repo rate by 25 basis points each over the course of the following three rounds, bringing it down to 5.25%.

  • As Trump Tariffs Take Effect, RBI Lower Repo Rate to 6%

    The repo rate was lowered by 25 basis points to 6% by the Reserve Bank of India. As a result, banks will have cheaper borrowing costs and be able to offer loans to individual consumers at reduced interest rates, which will lower loan instalment payments. The Monetary Policy Committee (MPC) unanimously decided to lower the repo rate, RBI Governor Sanjay Malhotra announced on 9 April. This is the second time the central bank has lowered the repo rate this year. The interest rate that the RBI charges commercial banks on the funds it lends them is called the repo rate or purchase agreement rate. Therefore, banks frequently pass the savings on to customers when it is decreased.

    The MPC reduced the repo rate from 6.5% to 6.25% during its most recent meeting in February 2025, which was the first rate drop since 2020. In an effort to increase credit flow and improve banking sector liquidity, the central bank recently lowered the Cash Reserve Ratio (CRR) by 50 basis points to 4%. In February, the MPC stuck to its neutral posture, which it had initially taken in October 2024. Because of its adaptability, the RBI can react to changing market conditions without being constrained by predetermined policy trajectories.

    Commenting on the development, Rohit Garg, CEO and Co-Founder, Olyv stated, “The RBI’s 25 bps repo rate cut is a clear signal to support growth while maintaining vigilance on inflation. For India’s credit-starved MSMEs and middle-class borrowers, even a marginal reduction in borrowing costs can unlock meaningful financial relief. However, the real test lies in the speed and efficiency with which the financial system transmits this benefit to end consumers. Monetary policy can be a powerful enabler, but its real impact will depend on coordinated execution, structural reforms, and the agility of our financial institutions. The MPC’s stance reflects cautious optimism—acknowledging easing inflation trends while staying alert to global uncertainties such as volatile commodity prices, geopolitical tensions, and shifts in global monetary policy.”

    Trump’s Reciprocal Tariff Hampers the Global Economic Growth

    According to the RBI Governor, the global economy is experiencing anxiety as the fiscal year gets underway. He further stated that the central bank is monitoring inflation risks that arise from these uncertainties. This occurs just a few days after the US administration of Donald Trump placed reciprocal tariffs on Indian products. The governor of RBI stated that the impact of trade frictions on global development will hinder domestic growth. Net exports may be impacted by higher tariffs. India is aggressively negotiating trade with the US government. He claimed that it is now hard to predict how global changes will affect growth. However, he claimed that the central bank had no worries about controlling domestic development.

    RBI Governor Elaborating on Overall Pulse of Indian Market

    According to the Governor manufacturing activity is reviving, and the agricultural sector’s prospects are still promising. The services industry is still resilient, he continued. With an increase in discretionary spending, urban consumption is increasing. He reported that bank and business balance sheets are “healthy” in the banking sector. The RBI Governor stated that the Monetary Policy Committee had taken note of the rapid decline in food prices and the fact that inflation is currently below goal. Real GDP growth is now expected to be 6.5%, a 20 basis point reduction from the GDP growth estimate for this fiscal year.

  • RBI Releases App to Offer Financial and Economic Data Access

    A mobile application developed by the Reserve Bank of India (RBI) will provide users with access to over 11,000 distinct sets of economic data about the Indian economy. The RBIDATA app allows users to download statistics for analysis and includes information on data source, unit of measurement, frequency, and recent developments for better comprehension. The software is designed to help researchers, students, and the general public, the central bank said in a statement. It also provides fast access to the database on the Indian economy webpage.

    This comes at a time when, in addition to launching programs for better data access throughout the nation, the RBI is also implementing a number of measures to fight financial crime and enhance transaction security. In order to combat cybersecurity threats and illicit actions like phishing, the central bank, for example, launched a special domain, “bank.in,” for Indian banks earlier this month.

    Commenting on this development Rajjat Gulati, Co-Founder, plutosONE stated, “The Reserve Bank of India is a treasure trove of information about the Indian Economy. From data about Payment Systems, to Macroeconomic Indicators, to the opinions of Policy-makers, Business Leaders depend on this information for knowledge and decision-making. By releasing the RBIDATA App, the RBI has taken a large step towards making this information much more accessible. Anyone looking to understand the Indian Economy or take Business Decisions will now have access in the palm of their hands. We know this will greatly benefit our workflows.”

    Echoing similar thoughts, Rajesh Katoch, CEO, EZ Capital said, “The Reserve Bank of India (RBI) has made an important move in the direction of greater transparency and access to financial data with its new mobile application, RBI Data. This revolutionary platform empowers the user through instant access to a treasure of economic and financial data, comprising major indicators, reports, and statistics that form the basis for sound decision-making. In the age of data-driven insights, the RBI Data app is an invaluable resource for researchers, policymakers, and the public at large. By providing access to this information at their fingertips, the RBI is not only encouraging a culture of engaged financial literacy but also active participation in the economic landscape of India.”

    Further applauding the development, Sahil Lakshmanan, Chief Business Officer, CarePal Money stated,”The launch of the RBIDATA app is a significant step toward democratizing access to economic and financial data in India. For the lending industry, access to comprehensive macroeconomic and financial data is crucial for assessing market trends, credit risk, and economic stability. With features enabling real-time data analysis, the RBIDATA app can help lenders make more informed decisions, improve risk assessment models, and ultimately drive financial inclusion by enabling better access to credit.”

    ‘bank.in’ to Combat Financial Fraud

    Recently, the Reserve Bank of India has launched an exclusive domain name for Indian banks, “bank.in.”. This was announced at the Monetary Policy Committee meeting by Sanjay Malhotra, the recently appointed governor of the RBI. Later on, the central bank would also launch “fin.in” for the financial industry. “The Reserve Bank shall implement the ‘bank.in’ exclusive Internet domain for Indian banks,” the central bank stated in its most recent notification. This domain name registration will start in April of this year. This will lessen the likelihood of banking fraud. The finance industry’s “fin.in” domain will come after this. All Indian banks will be required to use the “bank.in” domain starting in April 2025.

    This would lessen digital fraud by assisting consumers in distinguishing authentic banking websites from counterfeit and similar ones. Stricter regulations for online banking have been strengthened by the RBI’s introduction of Additional Factor of Authentication (AFA) for domestic digital payments. The Reserve Bank has been taking a number of steps to improve digital security in the banking and payments system, according to the central bank’s official statement. One such approach is the implementation of Additional Factor of Authentication (AFA) for domestic digital payments. It is suggested that AFA be expanded to include digital payments made to offshore merchants who have been granted access to such authentication.

    Ongoing Scenario of Cybercrime in India

    A report by the Data Security Council of India claims that the country’s cyber threat landscape has reached a turning point, characterised by an unparalleled level of sophistication and number of threats aimed at both individuals and organisations. This research identifies 369.01 million unique malware detections using telemetry data from Seqrite’s installation base, which includes 8.44 million endpoints across the country. Rapid digitalisation in India has greatly improved connectivity and technological adoption in a number of industries, but it has also increased the attack surface and made the country more vulnerable to cyberattacks. These findings, which highlight important trends, threat vectors, and strategic implications for organisations, show the growing problems posed by cyber threats amid India’s rapid digital transformation.

    ‘Made-in-India’ Chip Set for Launch by Sep/Oct: Vaishnaw
    Union Minister Ashwini Vaishnaw announces that India’s first indigenous semiconductor chip will be introduced by September-October, marking a major tech milestone.
    StartupTalkyNitin Konde

  • Paytm Money Settles Case for Violating SEBI Regulations by Paying Fine of INR 45.50 Lakh

    In order to resolve a case with SEBI about alleged violations of the standards for the technical fault framework, Paytm Money, the wealthtech subsidiary of Paytm, has paid a fine of INR 45.50 lakh. The market’s watchdog stated in a settlement decision that it had sent Paytm Money a show-cause notice for breaking multiple SEBI Act, 1992 provisions:

    •Failure to establish the permissible threshold of 70% for the generation of timely notifications for all critical assets.

    •Absence of documentation pertaining to the inspection period’s peak load.

    •Failing to integrate the Logs Analytics and Monitoring Application with all of its vital systems.

    •For the first half of fiscal year 2023–2024 (H1 FY24), there will be no live DR drills.

    “With a settlement order and a September 17, 2024, settlement application filed with SEBI, the noticee (Paytm Money) proposed to settle the current proceedings brought against it, pending adjudication proceedings, without acknowledging or disputing the findings of facts and conclusions of law,” the order stated.

    Regulatory Bodies Putting Strict Scanner on Paytm

    Earlier, Paytm and its directors and officials, both present and past, settled a complaint with SEBI by paying a total of INR 3.32 Cr. It is important to remember that for the past two years, regulatory agencies have been closely examining Paytm. In 2015, the Reserve Bank of India (RBI) granted in-principle approval to 11 applicants to establish a payments bank, including Paytm.

    Due to alleged violations of know your customer (KYC) standards, the central bank prohibited Paytm Payments Bank from onboarding new clients and taking deposits using its services, including FASTag and wallet, in 2024. The payments bank is essentially unable to conduct business as a result of the RBI’s crackdown.

    The Financial Intelligence Unit-India (FIU-IND) fined Paytm Payments Bank INR 5.49 Cr in March 2024 for breaking the nation’s money laundering regulations. The stock of Paytm Payments Bank plummeted as a result of the RBI’s crackdown. Additionally, Paytm’s market share in the UPI industry has decreased as a result of this.

    Response from Paytm

    Rajeev Krishnamuralilal, a former IRS and SEBI long-time member, has joined Paytm Money’s board as a non-executive independent director, the company announced in a statement. It is important to remember that One 97 Communications, the parent company of Paytm, already has Krishnamuralilal on its board. Apart from his position as a non-executive independent director, Krishnamuralilal will also be the chairwoman of Paytm Money’s risk management and corporate social responsibility committees and a member of the audit committee.

    Rajeev Agarwal Officially Joins Paytm

    Rajeev Krishnamuralilal Agarwal was appointed as an extra non-executive independent director at One97 Communications’ wholly-owned subsidiary, Paytm Money, on 13 February 2024.

    Agarwal will also assume important responsibilities, such as chairing the Paytm Money Risk Management and Corporate Social Responsibility (CSR) Committees and being a member of the Audit Committee. Having worked for the Indian Revenue Services (IRS) for 28 years, Agarwal brings more than 40 years of expertise to the position. He has worked for the Securities and Exchange Board of India (SEBI) as a full-time member.

    RBI Removes Restrictions on Online Customer Onboarding at Kotak Mahindra Bank
    The RBI has lifted restrictions on Kotak Mahindra Bank’s online customer onboarding, allowing the bank to resume digital account openings and other services.
    StartupTalkyNitin Konde

  • RBI Removes Restrictions on Online Customer Onboarding at Kotak Mahindra Bank

    According to the Reserve Bank of India (RBI), Kotak Mahindra Bank is now free to continue issuing new credit cards and onboarding new clients online after restrictions were removed. This follows the RBI’s decision in April of last year to stop Kotak Mahindra Bank from accepting new clients via its mobile and online banking platforms. Additionally, it was prohibited from issuing new credit cards by the central bank. The RBI observed that the bank has submitted compliance and taken action to resolve the previously raised supervisory concerns.

    The RBI further emphasised that an external audit was conducted on the bank to confirm these compliances. The central bank stated in a statement released on February 12 that in order to confirm the compliance, the bank also hired an outside auditor with RBI’s prior consent. The Reserve Bank has now chosen to remove the aforementioned restrictions imposed on Kotak Mahindra Bank Limited after being satisfied with the bank’s representations and corrective actions.

    Why RBI Barred Kotak Mahindra Bank?

    It is important to remember that the RBI subsequently banned the bank, stating that it had concerns after conducting an IT investigation of the bank and that the bank had “continued” to fail to adequately and promptly resolve these concerns. The RBI went on to state that significant shortcomings and non-compliances were found in the following areas: vendor risk management, business continuity, disaster recovery rigour and practice, patch and change management, user access management, IT inventory management, and data security and data leak prevention strategy.

    Over the years, the RBI has been examining banks and other financial organisations more closely. The country has also witnessed the central bank crack down on Paytm last year, which resulted in the closure of Paytm Payments Bank on March 15. Persistent compliance problems and supervisory worries, including infractions of customer due diligence regulations, were among the reasons given. Similar limits were imposed on HDFC Bank by the RBI in 2020, which prevented the bank from obtaining new credit card clients and from commencing its upcoming digital business-generating initiatives. But nearly two years later, in 2022, HDFC Bank was freed from this restriction.

    RBI Enhancing Security Features of India’s Banking Services

    The central bank has made a number of steps to better oversee the rapidly expanding digital banking and lending industry, even as its grip on surveillance is clear. In an effort to fight financial fraud, the central bank most recently announced during its monetary policy meeting on February 7 that it would launch an exclusive domain name for Indian banks, “bank.in.”

    The RBI released digital lending rules in 2023 with the goals of protecting consumers, safeguarding data, and monitoring unlicensed technology partners engaged in lending. It released a framework for fintech self-regulatory organisations (SROs) in September 2024 with the goal of advancing accountability, transparency, and consumer protection.

    ONDC Postpones Network Charge Implementation to April 1st
    ONDC has postponed the installation of network charges until April 1st, allowing more time for businesses and stakeholders to adapt to the upcoming changes.
    StartupTalkyNitin Konde

  • Under the IBC, the RBI will Start the Resolution Process Against AVIOM India

    Citing governance issues and payment defaults, the Reserve Bank of India (RBI) replaced the board of Aviom India Housing Finance on 27th January. Ram Kumar, a former Chief General Manager (CGM) of Punjab National Bank, was named administrator. In addition to applying to the National Company Law Tribunal (NCLT), New Delhi, to designate the administrator as the Insolvency Resolution Professional, the regulator stated that it “intends to shortly” begin the company’s resolution procedure under the Insolvency and Bankruptcy Code (IBC).

    The main business of Aviom is lending money for affordable housing. According to India Ratings, as of March 31, 2024, the promoter Kajal Ilmi and her family owned 31.4% of the company on a fully diluted basis. Other significant stakeholders included Nuveen (35.06%), Gojo and Company Inc. (19.84%), SABRE Partners AIF Trust (9.88%), and Capital 4Development Asia Fund Cooperative UA (3.78%).

    What is the Insolvency and Bankruptcy Code?                                                           

    A healthy credit flow and the creation of fresh capital are crucial in an expanding economy like India, and when a business becomes insolvent or “sick,” it starts to fall behind on its loan payments. Banks or creditors must be able to collect as much as they can from the defaulter as soon as possible in order for credit to avoid becoming stuck in the system or becoming bad loans.

    The company may be given the opportunity to start over with new owners if it is still viable, or its assets may be promptly liquidated or sold. In this manner, new credit may be added to the system, and asset value degradation can be reduced. The Insolvency and Bankruptcy Code (IBC) was introduced in 2016 to revamp India’s corporate distress resolution regime and consolidate existing laws to create a time-bound mechanism with a creditor-in-control model instead of the debtor-in-possession system.

    This was done at a time when India’s non-performing assets and debt defaults were mounting and older loan recovery mechanisms like the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), Lok Adalats, and Debt Recovery Tribunals were perceived to be underperforming.

    How Discrepancies Began in Aviom?

    In the midst of allegations regarding irregularities that are being looked into, the company’s statutory auditors discovered errors in its books of accounts. The National Housing Bank (NHB) has also been notified of a scam within the organisation. The business had also complained to the Economic Offences Wing (EOW). The business has been dealing with delayed interest payments and liquidity problems. It is being audited by a third-party forensic auditor that NHB has hired.

    In the quarter that ended in March 2024, Aviom India Housing Finance’s net profit decreased 14.09% to INR 6.34 crore from INR 7.38 crore in the quarter that ended in March 2023. In the quarter that ended in March 2024, sales increased by 58.94% year-over-year (Y-o-Y) to INR 117.38 crore, up from INR 73.85 crore in the quarter that ended in March 2023.

    RBI Governor Urges Financial Institutions to Combat Online Fraud
    RBI Governor urges financial institutions to develop reliable mechanisms and strengthen efforts to combat online fraud, ensuring secure digital transactions.
    StartupTalkyNitin Konde

  • Build Reliable Mechanisms to Reduce Online Fraud: RBI Governor to Financial Institutions

    Sanjay Malhotra, governor of the Reserve Bank of India (RBI), has counselled banks to set up strong and proactive procedures to stop the nation’s growing number of digital frauds. In order to reduce the risks associated with information technology (IT) and cybersecurity, the governor of the RBI also asked the financial institutions to strengthen oversight over their third-party service providers. Additionally, he urged the banks to enhance digital literacy and keep making technological investments. The governor made the remarks on January 27 in Mumbai while meeting with the chief executives of banks in the public and private sectors. In addition to Malhotra, the conference was attended by deputy governors Rajeshwar Rao, T. Rabi Sankar, and Swaminathan Janakiraman. In a statement, the central bank said that these exchanges are a part of the Reserve Bank’s ongoing communication with the top executives of the companies it oversees. The comments are made at a time when private companies and Indian government institutions are being bombarded by cyberattacks.

    Sharing his thoughts on the comments, Appalla Saikiran, Founder and CEO, SCOPE, stated, “The financial sector is undergoing rapid digital transformation, increasing opportunities but also increasing the vulnerabilities encountered by modern financial institutions. It has become imperative for financial institutions to herald mechanisms built through the front gate in the fight against online fraud. As cyber threats continue to grow both in volume and complexity, the industry must step up from reactive measures to proactive ones that have security and consumer trust at their centre.”

    “State-of-the-art solutions like machine learning (ML) and artificial intelligence (AI) thus have the potential to revolutionise the current fraud-prevention technologies. This is repetition but important as they give financial institutions an incredible ability to mine vast amounts of data in real time to spot abnormalities and act instantly on potential threats. Appropriate identification procedures and encryption are the most decent means to protect sensitive data from illicit access amongst the privacy-breaking actions,” he added further.

    Cyber Criminals Looted Around INR 177 Cr in FY24

    India lost INR 177.05 Cr to cyber scams in FY24, more than twice as much as INR 69.68 Cr in FY23, according to various published reports. The number of online scams in the nation increased by 334% year over year (YoY) to 29,082 in FY24, according to an RBI data. Nearly 300 tiny local banks’ payment systems were momentarily shut down by a ransomware attack on C-Edge Technologies just last year. C-Edge Technologies supplies banking technology systems to small banks nationwide. The Supreme Court’s official YouTube channel was hacked in September 2024 to show videos endorsing a cryptocurrency created by Ripple Labs, a US-based corporation. The Centre has increased its efforts to stop these cases in the interim.

    Government Enhancing the Security Channels

    In order to combat the growing number of cybercrimes in the nation, Home Minister Amit Shah stated last year that the government was seeking to establish a central registry of suspects. The “Citizen Financial Cyber Fraud Reporting and Management System,” which the government also established, has prevented scammers from stealing more than INR 2,400 Cr. To increase awareness of cybersecurity in India, fintech unicorn Razorpay partnered with the Indian Cyber Crime Coordination Centre (I4C) and the Ministry of Home Affairs (MHA) in December.

    DOT’s Request to Telcos

    The telecom department ordered operators to play a caller song about cybercrime awareness eight to ten times a day for three months last December. The Indian Cybercrime Coordination Centre (I4C), a cybercrime wing under the Home Ministry, has supplied the caller tunes, as per the order copy that was delivered to the telecom carriers.

    According to the order, caller tune audios will be played through pre-call announcements and ringback tones, which will be supplied to TSPs by I4C nodal officers in order to raise public awareness of cybercrime through the caller tune campaign. A subscriber may hear caller tunes eight to ten times every day.

    Pine Labs to Submit IPO Draft Documents by Mid-February
    Pine Labs is gearing up for its IPO, planning to submit draft documents by mid-February, signaling its next big step toward going public.
    StartupTalkyNitin Konde

  • E-commerce and Quick Commerce Are Increasing Consumption: RBI

    Quick commerce and e-commerce are fuelling private consumption in the nation, according to the Reserve Bank of India (RBI). According to the central bank’s monthly report, e-commerce and q-commerce are driving the economy’s recovery in private final consumption. The central bank went on to say that encouraging competition is more vital than imposing restrictions on certain markets. In the same sentence, the RBI pointed out that the October–December quarter saw a little increase in demand for household commodities. The RBI claims that the middle class, particularly in cities, is counting on relief from food inflation in order to increase their disposable incomes. The central bank proposed that increasing consumption is a means of reviving the economy’s animal spirits.

    Rural India Goldmine for Ecommerce Platforms

    According to the RBI, the country’s rural areas should continue to see rapid volume growth. It is important to remember that the RBI stated in November of last year that during the festive season, rural India became a treasure trove for e-commerce platforms. The development coincides with the emergence of fast commerce as the next arena of competition in the e-commerce industry. Among the leading companies in the market are Zepto, Swiggy’s Instamart, and Zomato‘s Blinkit. In FY24, the three of them recorded combined revenue of nearly $1 billion. Amazon and Flipkart, two of the biggest online retailers, have also joined the market with their products, nevertheless. Additionally, BigBasket and JioMart are vying for a piece of the action.

    Changing Dynamics of Quick Commerce Business

    Although quick commerce began with grocery delivery, more businesses are entering the food delivery market and providing services in ten to fifteen minutes. Swiggy has introduced Bolt and SNACC for speedy delivery, while Zomato has introduced Blinkit’s Bistro and a 15-minute meal delivery service. To provide comparable features, Zepto has also released its own stand-alone app called “Zepto Cafe.” Additionally, recent entrants like Zing and Swish are providing fast meal delivery services.

    The Present State of the Quick Commerce Industry in India

    According to industry data, the rapid commerce business in India has expanded by 280% in the past two years, and the top three companies, Blinkit, Zepto, and Swiggy Instamart, have combined to generate over $1 billion in revenue for FY24. This occurs as Indian businesses are stepping up their rapid commerce solutions. Amazon India is getting ready to debut its rapid commerce service, Tez, while Myntra recently introduced M-Now for 30-minute- to 2-hour deliveries. The fierce competition in the rapid commerce area is shown by Zepto’s recent $350 million fundraising round, which was led by Motilal Oswal’s Private Wealth division. The company has raised $1.35 billion this year alone to increase the number of its dark stores and diversify its product offerings, demonstrating the significant investments being made by competitors to gain market share in this quickly expanding industry.

    E-commerce and other retail formats are being disrupted by quick commerce, which, according to a recent Bernstein analysis, is expanding more quickly than contemporary retail chains like Reliance Retail, Dmart, and Spencer Retail. This is one of the reasons why consumer platforms are responding to the shift by preparing to deliver a variety of goods outside of groceries in 10–20 minutes.

    India Ranks Second Globally in Digital Skills for Future Jobs
    India ranks second globally in digital skills essential for future jobs, showcasing its readiness for the evolving workforce.
    StartupTalkyNitin Konde

  • Financial Services Secretary: Fintechs Must Be Innovative While Adhering To Standards

    On January 7, Nagaraju Maddirala, secretary of the Department of Financial Services (DFS), urged fintech companies to “consistently” provide creative solutions to the financial services sector while “strictly” adhering to rules. He said this while presiding over a conference in New Delhi with cofounders and senior executives from significant fintech companies. Kunal Shah, the founder of CRED; Bipin Preet Singh of MobiKwik; Sharath Bulusu of Google Pay; and officials from BillDesk, Infibeam Avenues, and Razorpay were among those present at the meeting. The gathering was also attended by industry organisations like the Digital Lenders Association of India, the Payments Council of India, and the Startup Policy Forum. According to a statement, “the goal of the engagement with partners from the startup and fintech ecosystem was to promote an open exchange of ideas aimed at elevating the fintech sector to a global standard.”

    Sharing his views on the suggestion, Rajjat Gulati, Co-Founder, plutos ONE stated, “Fintechs use technology to deliver services to their customers cheaper, faster, and better than before or to offer innovative new solutions. With technology comes the potential to deliver these solutions and their positive impact at never-before-seen scales. At the same time, technology also means that any missteps or vulnerabilities can be multiplied many times over. An attacker now has access to not thousands, but millions of customer records if they are able to access your systems. Millions could be defrauded of billions because somewhere in the stack of technological services that come together to deliver a simple money transfer solution is a bug or vulnerability or a piece of malicious code.”

    Digital Payment Systems Required Deeper Penetration

    Maddirala praised the Indian fintech industry’s explosive expansion over the last ten years and emphasised the necessity of enhancing digital payment systems in rural and northeastern areas, especially with UPI. He also urged the stakeholders to support micro, small, and medium-sized businesses (MSMEs) through “lending based on digital footprints.” According to the official announcement, Maddirala outlined the several steps the Centre has made to foster an atmosphere that is supportive of the fintech industry. Officials from the Reserve Bank of India (RBI), the National Payments Corporation of India (NPCI), the Financial Intelligence Unit (FIU), and the Ministry of Electronics and IT (MeitY) also attended the conference.

    2024 Not a Promising Year for Fintech Startups

    The gathering takes place while the domestic fintech sector continues to suffer from a lack of capital. Indian fintech firms raised $2.5 billion in 2024, a 19% decrease from $3.1 billion the year before, despite being the most funded industry last year. The fintech ecosystem had a drop in funding for the third year in a row in 2024. Nonetheless, the number of deals in the industry increased by 23% from 2023 to 2024, from 132 to 162. Last year, the fintech industry also achieved a $30 billion funding milestone (from 2014 to 2024) and welcomed two new unicorns to its portfolio: Moneyview and Perfios. Finova Capital, Drip Capital, and M2P were notable for securing some of the largest agreements in 2024, with each deal exceeding $100 million.

    India’s Fintech Ecosystem Still Leading the Global Race

    In spite of this downturn, the Indian fintech ecosystem is one of the top three globally financed fintech ecosystems in H1 2024, after the US and the UK. According to Tracxn’s Geo Semi Annual Fintech India Report for H1 2024, the ongoing funding winter and a number of other geopolitical challenges are to blame for the funding fall. Compared to one in H2 2023, two funding rounds totalling more than $100 million were observed during that time. These include the $120 million Series C funding round raised by lending platform Avanse and the $144 million Series D funding round raised by non-banking lender Credit Saison.

    Vodafone and Airtel Transfer Joint Venture Stake to iBus
    Vodafone and Bharti Airtel will transfer their entire stake in the joint venture to iBus, marking a pivotal move in the telecom industry.
    StartupTalkyNitin Konde

  • A Bill to Outlaw Uncontrolled Lending is Proposed by the Centre

    A draft bill that seeks to outlaw unregulated lending practices in the nation has been put out for public comment by the finance ministry. The draft measure, which is titled “Banning of Unregulated Lending Activities” (BULA), will be available for public comment until February 13, 2025. All organisations not approved by the Reserve Bank of India (RBI) are to be prohibited from engaging in public lending activities by the proposed bill. Additionally, the proposed bill forbids anybody from “wrongfully” enticing the public to engage in unregulated lending practices. In order to persuade someone else to seek or accept a loan from lenders engaged in unregulated lending activity, this includes making any “statement, promise, or forecast that is false, deceptive, or misleading in material facts or purposefully concealing any material facts, digitally or otherwise.” Additionally, it stipulates that criminals who engage in or encourage unregulated loan activities could be imprisoned for two to seven years.

    Fines Between INR 2 Lakh to 1 Crore Might be Imposed

     Additionally, the offending platforms may be fined between INR 2 lakh and INR 1 crore by the appropriate authorities. Repeat offenders may face a fine of INR 10 Lakh to INR 50 Cr in addition to five to ten years in prison. According to the draft bill, “any lender who lends money, whether digitally or otherwise, and uses unlawful means to harass and recover the loan shall be punished with imprisonment for a term that shall not be less than three years but which may extend to ten years and with a fine that shall not be less than five lakh rupees but which may extend to twice the amount of the loan.” Furthermore, the measure gives the Centre the authority to designate and report “certain activities” as unregulated loan activity after consulting with the relevant regulators.

    Designating Competent Authority

    Twenty government departments and agencies, including the RBI, SEBI, PFRDA, NABARD, SIDBI, states, and federal ministries, are included in the draft bill as being in charge of regulated lending activities. The proposed regulations also allow the union government to choose a “competent authority” to establish, manage, and run an internet database containing data on lenders doing business in the nation. The public will also have access to this database, allowing users to report fraudulent or cloned creditors and obtain information on regulated lenders. It is important to remember that earlier this year, the RBI was allegedly considering creating a public registry of lending applications that were whitelisted in order to combat the threat of illicit lending apps in the nation. According to reports, the Digital India Trust Agency (DIGITA) would be responsible for vetting the aforementioned lenders.

    In the meanwhile, the proposed bill requires all lenders in the nation to provide all relevant business information at the time the act is implemented. The “competent authority” may think about providing the CBI or the state police with information about the platforms in question if it has grounds to suspect that they are providing services that fall under the purview of “unregulated lending activity.” Additionally, the draft bill suggests creating special courts to hear these matters, with a District and Sessions Judge presiding over them.

    The authorities will also have the jurisdiction to issue an order to temporarily seize the accounts, funds, or property obtained in the lender’s name after identifying such criminals. The RBI-led Working Group on Digital Lending (WGDL) has created the draft bill. After initially submitting its report on the issue in November 2021, the WGDL recommended a number of actions, one of which was the introduction of legislation to outlaw unregulated lending. This comes in addition to the Centre’s continuous efforts to target unregulated online lending platforms. Many of these internet loan sharks utilise aggressive measures to reclaim the money they have stolen, after first luring potential borrowers with cheap interest rates and simple disbursements. Additionally, this has resulted in several suicide deaths throughout the nation. At the 28th Financial Stability and Development Council (FSDC) meeting in February, important government representatives talked about how to limit these platforms in order to control this. This is in spite of the fact that Google, the electronics and IT ministry, and the RBI have been actively working together to remove unregulated lending platforms from the Play Store, a key app marketplace.

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