Fintech | Business Upturn

Zeta and RBI join forces launching a fintech breakthrough with UPI credit lines

Sadhika — Sat, 11 May 2024 08:07:59 +0000

Zeta, a significant player in fintech, has unveiled its latest offering in response to the Reserve Bank’s introduction of the UPI credit line scheme. This new digital credit-as-a-service solution is aimed at banks, allowing them to leverage the UPI credit line scheme efficiently. Founded by Bhavin Turakhia and Ramki Gaddipati, Zeta is eyeing a share in the projected $1 trillion market by 2030.

Ramki Gaddipati, Zeta’s global chief technology officer and chief executive for the Asia-Pacific region, anticipates the product will streamline credit distribution for banks efficiently.

Looking beyond India, Zeta is focusing on expanding its reach to small and medium-sized banks in the United States. With a presence in Dubai, the UK, North America, Latin America, Europe, and Asia, Zeta is strategically positioned for global expansion. Despite a hefty investment of over $360 million in its global banking platform, Zeta is on track to achieve profitability soon, buoyed by funding exceeding $340 million, including investments from SoftBank and Mastercard, resulting in a valuation of $1.45 billion.

Navigating India’s regulatory landscape: A comprehensive guide

Finance Desk — Mon, 19 Feb 2024 03:23:56 +0000

Discovering the path through India’s business regulatory ecosystem can be an intricate journey, comprising 1,536 acts and rules with over 69,000 compliance obligations. The process commences with businesses obtaining essential licenses, permissions, and approvals from relevant authorities across different phases: ‘setting up,’ ‘pre-commissioning,’ ‘post-commissioning,’ and ‘post-production.’

The licenses are pivotal for operating a fintech company in India. These include registrations and certificates under acts like the Contract Labour (Regulation and Abolition) Act, 1970, Employees State Insurance Act, 1948, Central Goods and Services Tax Act, 2017, and State Goods and Services Tax Act, 2017, among others.

Fintech entities engaging in activities like deposit-taking and lending must secure banking or non-banking licenses from the Reserve Bank of India (RBI). Approval from regulatory bodies like RBI, SEBI, or IRDAI is imperative for fintechs involved in various financial offerings. Payment aggregators, as per RBI’s Guidelines for Payment Aggregators and Payment Gateways, must acquire a license. Additionally, businesses dealing with intellectual property in their offerings need licenses from patent holders, unless they are the patent holders themselves.

Publicly traded fintech companies are bound by SEBI (Securities and Exchange Board of India) regulations, especially the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These regulations ensure prompt disclosure of material events and information that can impact the valuation and market reputation of a listed entity.

Regulation 30 mandates the disclosure of material events within 24 hours, while Regulation 29 outlines the intimation timelines for board meetings, financial result discussions, and alterations to securities. Compliance with these regulations demands a thorough understanding and adherence to circulars, directions, advisories, notices, and orders issued by sectoral regulators like RBI and the Ministry of Corporate Affairs.

Conducting compliance applicability assessments is crucial for businesses to gauge the extent of applicable regulations. Keeping abreast of regulatory changes involves monitoring circulars, advisories, and notices from sectoral regulators, as well as tracking over 2,200 government websites for updates.

As businesses navigate this complex regulatory landscape, comprehensive awareness and proactive compliance efforts become integral for sustained success.

Google to setup Global Fintech Operation Centre in Gujarat

Adesh Dixit — Sat, 24 Jun 2023 14:03:44 +0000

Alphabet Inc-owned Internet giant Google will be setting up its Global Fintech Operations Centre at GIFT City in Gujarat, its CEO Sundar Pichai said on Friday post meeting with Indian Prime Minister Narendra Modi.

Sundar Pichai also said that Google continues to invest in the country through its $10 billion which accounts for roughly Rs 81,980 crore India Digitisation Fund. Indian PM Narendra Modi has been on a state visit to the United States from June 21 to June 24 where he met his American counterpart, President Joe Biden and First Lady Jill Biden. Besides the CEO of Google PM also met the CEO of Microsoft Satya Nadella, the CEO of Apple Tim Cook, the CEO of ChatGPT’s parent firm OpenAI Sam Altman and Tesla CEO Elon Musk.

Pichai in his statement said, “Today we are announcing the opening of our global fintech operations Centre in GIFT City, Gujarat. It will cement India’s fintech leadership thanks to UPI and Aadhar. We are going to build on that foundation and take it globally.” Pichai also shared his excitement on looking the progress of India over the years, particularly around Digital India and economic opportunities.

Pichai met PM Modi in December and shared that Google aims to invest $10 billion in India Digitisation Fund and continue to invest in companies working on Artificial Intelligence. He also said that Prime Minister’s vision of Digital India is ahead of its time and blueprint for other countries.

The Ministry of External Affairs in its tweet highlighted the meeting between PM Modi and Google CEO Pichai and laid emphasis on productive discussions on topics like AI, Fintech and cybersecurity. There will also be collaboration between Academic Institutions and Google to enhance research, development and skill enhancement.

Google announced collaboration with Bangalore based Indian Institute of Science to collect speech data from 773 districts in the country to fine tune its translation and search technology. it also announced grant of $1 million in setting up India’s first responsible artificial intelligence Centre at IIT Madras.

RBI allows 5% default loss cover for bank-fintech deals, curbing risk in lender-fintech collaborations

Viditha Ganji — Thu, 08 Jun 2023 17:44:45 +0000

The Reserve Bank of India (RBI) has implemented new guidelines allowing banks and other regulated entities to enter into default loss guarantee arrangements with fintech companies, but with certain limitations. This move aims to mitigate the risk of significant defaults in partnerships between lenders and fintechs.

According to the guidelines issued by the central bank on Thursday, a default cover of up to 5% of the loan portfolio can be provided. A default loss guarantee agreement is typically signed when an RBI-regulated entity, such as a bank or non-banking financial company (NBFC), engages in a lending agreement with a loan service provider or other regulated entities like fintechs. In such arrangements, a portion of the portfolio is guaranteed by the second party, in this case, fintech companies, in the event of default. Typically, the first lender provides funds to the second party for on-lending purposes.

The RBI clarified that any implicit guarantee associated with the loan portfolio’s performance by the regulated entity, specified upfront, would also be covered under the definition of default loss guarantee. Regulated entities in this circular refer to banks, cooperative banks, and NBFCs.

The responsibility for recognizing individual loan assets as non-performing assets and making provisions lies with the regulated lender, regardless of the availability of default loss guarantee cover at the portfolio level, as per the existing asset classification and provisioning norms.

In cases where the guarantee is invoked by the regulated lender, the RBI has specified a maximum time period of 120 days from the date of default for taking necessary action. The amount of the invoked default loss guarantee cannot be set off against the underlying individual loans.

To ensure transparency, regulated lenders must ensure that loan service providers publish the total number of portfolios and their respective guaranteed amounts on their websites.

These guidelines do not apply to guarantee arrangements under the Credit Guarantee Fund Trust for micro and small enterprises, the Credit Risk Guarantee Fund Trust for Low Income Housing, or individual schemes under the National Credit Guarantee Trustee Company Ltd.

These regulations follow the RBI’s previous directive in September 2022, which mandated that banks and NBFCs must comply with securitization norms before entering into any guarantee arrangements. The aim is to prevent the use of first loss default guarantee systems, similar to synthetic securitization arrangements, which the RBI prohibits. This announcement had resulted in a temporary halt in such deals.

Jatinder Handoo, CEO of the Digital Lenders Association of India (DLAI), stated that the RBI has incorporated most of the feedback received from stakeholders, including the DLAI, in formulating these guidelines. The clarity provided on the permissible structure for default loss arrangements addresses a key request from sector players. Handoo sees this circular as a positive step forward for the digital lending industry, offering a well-defined structure that promotes effective participation and transparency among all stakeholders.

These guidelines are expected to create a conducive environment for bank-fintech collaborations, allowing lenders and fintechs to leverage the default loss facility in a secure and transparent manner.

UP turning out to be favourite destination for Fintech companies

United News of India (UNI) — Thu, 23 Jun 2022 07:20:35 +0000

Lucknow, June 23: Noida and greater Noida have emerged as favorite destinations for setting up financial technology (Fintech) companies over the last four years.

According to an official spokesman during the first tenure of Chief Minister Yogi Adityanath it was decided that a Fintech City would be developed over 100 acres spread across Noida and Greater Noida.
He said that according to latest information, there are 239 Fintech start-ups in Noida. These are working largely in one or more of the four main fintech areas including digital lending, payments, blockchain and digital wealth management. Most companies are witnessing a fast pace of growth in view of the rapid adoption of digital payments across all sectors in India.

The availability of world-class infrastructure, uninterrupted electricity supply, internet connectivity. And trained human capital have made Noida and Greater Noida favourite destinations for Fintech companies.

Companies like Pine Labs, Spice Money, Paytm Payments Bank, Advisorymandi, DIGISPICE. OneCode, Wishfin, GramCover, FanTiger, Marquee Equity, Easypolicy, Buddy4Study, Oye Loans, PayMe India, PortDesk. Nivesh.com and many more have been doing business in Noida and Greater Noida for many years.

The areas in which they are working include diversified payment solution for businesses. And merchants, agent-based payment solutions to consumers and businesses, digital bank for individuals and businesses. Equity research platform focused on stocks, suite solutions for government agencies. Referral-based marketing solutions, comparison platform for consumer loans. Online life and non-life insurance comparison platform focused on rural areas. NFT-based trading platform for music, deal management and investor discovery platform. Customizable co branded prepaid card solutions for businesses and retail loans.

Some of the large data centre projects slated to be set up in this region of UP during the recently-concluded third ground breaking ceremony (GBC), are powered by top Fintech companies like Paytm.
Growth of Fintech in India is driven by various macroeconomic factors. Such as enabling government and regulatory initiatives. India’s demographic dividend, increasing national disposable incomes, large unbanked population. Improving internet access and smartphone penetration, and a rapidly evolving e-commerce.

In view of Noida and Greater Noida being chosen. As the first choice for setting up Fintech companies, the sector is bound to grow rapidly in future. Creating thousands of employment opportunities every year.

Mobikwik looking to raise $100 million after delay of planned IPO

Aryan Jakhar — Thu, 09 Jun 2022 05:41:06 +0000

After deferring an initial public offering, One Mobikwik Systems Ltd. is in talks with investors to raise up to $100 million in equity. To fund corporate expansion, according to a company founder.

In an interview in Mumbai, Mobikwik’s co-founder Upasana Taku said the cash will be used for marketing, hiring employees. And making acquisitions by the Gurugram-based fintech startup. Which emerged profitable for the first time in the quarter ending Dec. 31. She stated that Mobikwik intends to proceed with the IPO at a later date.

Following a sell-off in the shares of larger rival Paytm. Which went public in November, the company postponed its planned IPO. According to statistics from investment platforms that allow trading in private companies, Mobikwik’s unlisted shares bore the brunt of the tech sector’s downturn.

The company Mobikwik, which counts American Express Co. And Sequoia Capital among its investors, is one of India’s top providers of buy now, pay later services. Mobikwik has over 100 million registered users and is looking to significantly expand its business. Mobikwik was valued at over $700 million when it raised financing from the Abu Dhabi Investment Authority last year, but no decision has been made on the valuation for the latest funding round, according to Taku.

PM Narendra Modi inaugurates the InFinity Forum, Check details here

News Desk — Fri, 03 Dec 2021 06:03:53 +0000

On Friday, Prime Minister Narendra Modi inaugurated the InFinity Forum, a FinTech thought leadership forum. In his keynote address, Prime Minister Narendra Modi addressed that mobile payments in India overtook ATM cash withdrawals for the first time last year. He went on to say that entirely digital banks, which do not have any physical branches, are already a reality and might be widespread in less than a decade.

Modi stated in his speech that India has proven to the world that it is second to none when it comes to adopting technology or inventing around it and that transformative efforts such as Digital India have opened the door for creative Fintech solutions to be used in governance.

Modi said “We believe in sharing our experiences and expertise with the world and learning from them as well. Our Digital Public Infrastructure solutions can improve the lives of citizens around the world.”

The prime minister stated that GIFT City is more than just a building; it represents India. It expresses the democratic values, demand, demography, and variety of the country. “It symbolises India’s willingness to embrace new ideas, innovation, and investment. GIFT City serves as a portal to the global fintech community,” Modi remarked.

Under the auspices of the Government of India, the International Financial Services Centres Authority (IFSCA) is hosting the event in partnership with GIFT City and Bloomberg. In the first edition of the forum, partner countries include Indonesia, South Africa, and the UK. More than 70 countries are expected to attend the conference.

Last year, in India, mobile payments exceeded ATM cash withdrawals for the first time.

Fully digital banks, without any physical branch offices, are already a reality and may become commonplace in less than a decade: PM @narendramodi

— PMO India (@PMOIndia) December 3, 2021

Fintech company Chqbook raises ₹40 crores in funding

News Desk — Thu, 23 Sep 2021 10:06:47 +0000

Finance technology startup Chqbook has raised Rs 40 crore in the Pre-Series B round which is led by the existing investors Rajiv Dadlani group and Avishkaar capital. Chqbook will use this capital to strengthen its technology platform and to increase user acquisition. Earlsfield Capital UK, Family offices and HNI investors which includes Jeremy Lim, Bhupesh Kumar, Nilesh Srivastava and others also participated in the B round

Chqbook provides small business owners access to the current account, bookkeeping services for cash transactions along with credit and insurance. It was founded in 2017 and launched its Neo-banking platform with over ₹6,50,000 transacting customers for the services and crossed 1 million app downloads now this app processes over 3,000 crore transaction value annually.

Chqbook to increase its lending operations, it had currently raised Rs75 million of venture debt from Innoven capital.

Chqbook founder, Vipul Sharma stated that that they have huge demands from small business communities for their multi-product stack and launched products. Which boost their companies confidence to double down and provide their customers access to banking credit and insurance all over the country in the next 10 years to increase their growth rapidly integrated and continuously committed to solving all the issues for this community insure 10 million customers, and open 1 million accounts and around Rs 300 billion is the target to lend.

Perhaps, the insurance gap is so much wider that this opportunity will take multiple players to join this movement.

Paytm teams up with HDFC Bank for digital payments

News Desk — Mon, 20 Sep 2021 08:11:52 +0000

Online payment platform Paytm with this new strategic partnership help Paytm and HDFC to combine the strength in banking lending and digital payments space along with all the Digital solutions for financial transformation in the country both will build comprehensive solutions.

It also aims to empower the new businesses and make them capable to scale up further.
Now the Paytm postpaid is a buy pay later solution with easy EMI and Flexi pay options.
And this partnership will accelerate the transformation in semi-urban and rural India. HDFC Bank has more than 50 million debit and credit consumers and 2 million Merchant acceptance points while Paytm has more than 333 million users and 21 million Merchant.

Co-branded retail POS product also planned to be launched by Paytm in HDFC Bank as stated in the report.

Paytm lending CEO BHAVESH GUPTA stated: “Together we aim to provide innovative digital lending and payment solutions for consumers and merchants alike.” He also stated that this strategic partnership will bring together our technology and Digital solutions and HDFC Bank retail and credit expertise. At the end of October Paytm is expected to launch India’s largest IPO.

HDFC Bank Group head payments, consumer Finance, digital banking and IT Parag Rao stated in a report “we believe that this is the start of a great partnership and progressive strength of both HDFC Bank and Paytm will help us strengthen our respective leadership positions.”

Indian fintech startup, Slice, raises $20 million in equity funding

Diya S. — Mon, 28 Jun 2021 10:06:06 +0000

On June 28, Indian fintech startup slice informed that it has raised $20 million in a new financing round. The startup that has built a ‘super card’ for Indian millennials will be adding new features to change how people engage with their credit cards.

The amount is being raised in equity funding from existing investors Gunosy and Blume Ventures among others at a valuation which is not revealed yet. The Bengaluru-based startup offers flexibility to customers concerning payment of credit card bills and reward points on transactions.

The members can receive rewards up to 2 per cent on every card transaction which are directly redeemable in cash. In addition, they can slice their card bills for free for over three months as a result of which they can get an interest-free period of up to 90 days. It is considered the longest in the industry.

The founder and Chief Executive of the fintech startup Raj Bajaj has said to The Economic Times that slice would utilize the capital to diversify your offerings and expand its team. He told TechCrunch that it is now bringing rewards to its app since it attempts at turning the plastic card into a larger financial instrument.

He added, “Banks treat credit cards like a loan product instead of a high frequency payment instrument and make money through late charges and interest rates.” Hence, the main focus of the banks is the optimization of credit card-related fees as well as portfolio schemes to increase the loan book.

Shinji Kimura, the Chairman and Chief Executive Officer of Japan-based Gunosy Inc. has said that startup’s biggest advantage is how well they understand millennials and Gen Z.

PhonePe to allot stock options worth $200 million

Sarthak Yadav — Thu, 04 Feb 2021 21:00:33 +0000

A month after PhonePe the fintech giant was partially spun off from Flipkart, it allotted stock options worth $200 million to its 2,200 employees.

In December, Flipkart had announced the partial spin-off of PhonePe, as the digital payment firm had raised $700 million in funding, valuing it at $5.5 billion.

At that time, Flipkart had said the spin-off would offer PhonePe an opportunity to create a tailor-made equity incentive or ESOP programme for its employees.

PhonePe HR Head Manmeet Sandhu said in a blogpost, that, “In January 2021, we launched the PhonePe Stock Option Plan that gives every PhonePe employee the chance to own a part of the company. The $200 Mn plan allotted stock options to all 2,200 employees at PhonePe, enabling everyone in the organisation to benefit from its success.”

The PhonePe stock option plan is a core component of the company’s compensation philosophy “crafted to encourage collaboration, long term focus and organisation first thinking,” Sandhu added.

The company said it is committed to building an internal culture based on the inclusion and an abundance mentality and looking at removing the need for internal competition.

“Our compensation system aligns with this approach by removing variable pay based on individual performance for most roles. Instead, we use ESOPs to create the incentive for everyone to be invested in long-term organisational growth,” “by having ESOPs at a minimum of $5,000 for all levels, we enable every employee in the organisation to participate in the wealth generation opportunity…” the blog said.

As roles become more senior, ESOPs are part of the annual compensation for employees, translating into a larger component of their compensation is tied to the organisation’s success that encourages everyone to put the organisation first, it added.

PhonePe was founded by ex-Flipkart executives Nigam, Chari and Burzin Engineer, and was acquired by Flipkart in 2016. In 2018, Flipkart was acquired by Walmart, and PhonePe was also part of the transaction.

Post the transaction in December 2020, Flipkart owns 87% majority share in the hived-off entity with US-retail giant Walmart owning 10% and existing investors, including Tiger Global Management, holding the remaining 3%.

Google is acting like a ‘super-regulator’ says Indian fintech lenders

Devanshu Singla — Mon, 18 Jan 2021 06:53:49 +0000

Google reviewed hundreds of money loan apps from its online Play Store in India, and immediately removed those who were found breaching user safety policies from the Play Store. The Reserve Bank of India (RBI) had ordered Google to take them off the app store.

Earlier, Google had said Play Store would only allow personal loan apps that demand borrowers to repay loans after 60 days or more, adding that its policies need instant loan apps to disclose the minimum and maximum periods of repayment, the maximum annual percentage rate, and a representative example of the total loan cost.

Indian fintech lenders seemed unhappy with the internet giant’s latest directives to provide credentials, and they have written to the Google mentioning the names of Chinese apps that have a week to 14-day products while its rules of not allowing lenders giving short-tenure loans of less than 60 days. Digital lending companies believe Google is acting like a super-regulator, seeking details that even the banking regulator does not ask for.

“We have written to Google on the need for uniform regulations among fintech players, Google says you can’t have a lending product which is less than 60 days while all these apps had 7-14 day products,” a member of FACE (Fintech Association for Customer Empowerment), told ET.

The member, on the condition of anonymity, further stated that a majority of these apps are China-led companies. “We have approached Google on why these China-led apps are allowed to run while we have such restrictions. We have also written to Google with names of these Chinese-led companies,” the financial daily quoted him as saying.

Alibaba founder Jack Ma’s net worth is whopping; Everything you need to know!

Sarthak Yadav — Tue, 05 Jan 2021 18:47:37 +0000

The Bloomberg Billionaires Index reported that Jack Ma founder of Alibaba and AliExpress has lost about $11 billion, dropping his net worth to $50.1 billion. Last year the fortune of the Chinese billionaire reached $61.7 billion.

In November 2020, Ant Financial the fintech arm of the Jack Ma owned tech conglomerate was set to raise $34 billion jointly on its listing on the Shanghai and Hong Kong stock exchanges making the biggest stock market debut in history.

These plans fell through after Chinese regulators launched a last-minute antitrust investigation and suspended the transaction. This caused the shares of Alibaba, a company that owns 33% of Ant Group, to fall and with them the fortune of the businessman. Jack Ma was on the verge of becoming the richest man in the Asian country again.

As reported by BBC the Hong Kong Stock Exchange commented that Ant Group “may not meet standards for listing and transparency requirements.” He also suggested that “recent changes” in the regulation of digital finance could have become an obstacle.

The State Administration for Market Regulation (SAMR) declared in a statement that they are investigating Alibaba group for “suspicion of monopolistic conduct.”

The only information brought to the public domain is that the investigation is related to the exclusivity policy of the group, which forces merchants to sell only on Alibaba and prevents them from doing so on other rival platforms.

The Central Bank of China ordered a reorganization of operations for Ant Group to rectify its insurance, loan and wealth management services.

Ant Financial has pumped billions of dollars across several companies in India like, Paytm, Snapdeal, Zomato, Big basket etc. The investment is close to around $2.7 billion.

BharatPe to raise $850 million via equity funding and debt

Arjun Kalia — Tue, 05 Jan 2021 11:28:48 +0000

Resilient Innovations Private Limited (BharatPe), a New Delhi based Fintech company is all set to raise $150-200 million in equity funding and around half a billion debt over the period of two years with the first tranche of around $100 million being targeted by March 2021. BharatPe had already raised $75 million in February 2020 as part of a Series C round led by New York-based hedge fund Coatue Management and Palo Alto-based Ribbit Capital.

BharatPe, whose application to become an NBFC was rejected by the Reserve Bank of India (RBI) last year, plans to disseminate $500 million through non-banking financial companies (NBFCs) and non-competing Fintechs to expand its merchant base.

“We are more excited about the debt we are raising from international banks and financial institutions, as we look to create an India-focused credit fund. Fintech is moving towards lending and debt will become much bigger than the equity market,” said Ashneer Grover, CEO and Co-Founder of BharatPe.

The company plans to launch its wholesaler financing product ‘BharatPe DtoR’, which stands for the distributor to retailer this month and will use the debt to bolster lending operations with new products and enter new retail segments.

It was last month when BharatPe said that it has toppled Google Pay to become the third-largest player in the merchant UPI payment acceptance space.

Bill Gates appreciates India’s digital finance approach, hails it as a global model

Shalmali Bhagwat — Wed, 09 Dec 2020 08:18:13 +0000

As reported by Bloomberg, Tech pioneer Bill Gates has appreciated India’s policies for financial innovation and inclusion, further informing that his philanthropic foundation is collaborating with other countries to introduce open-source technologies modelled on the country’s implementation.

India has erected ambitious platforms for universal identification and digital payments, including the world’s largest biometric database and a system for sending rupees between any bank or smartphone app. Gates said those policies have drastically reduced the cost and friction of distributing aid to the poor, especially during the pandemic.

“If people are going to study one country right now, other than China, I’d say they should look at India,” Gates said at the Singapore Fintech Festival on Tuesday. “Things are really exploding there and innovation around that system is phenomenal.”

Indian digital payments really boomed after the government pushed demonetization in 2016, invalidating most of the country’s high-value bank notes in a move to curb corruption and veer Indians towards digital transactions. The Unified Payments Interface, or UPI, has been aided by increasing smartphone use and wireless data rates that are among the lowest in the world. India mandates that companies use its UPI platform so payments can be sent easily among all services, including those from Facebook Inc., Amazon.com Inc., Walmart Inc., Paytm and any new upstart. Zero user fees are also required.

“India is a great example,” the co-chairman of the Bill & Melinda Gates Foundation said during the virtual conference. His organization is now helping some countries that don’t have established standards to roll out similar systems based on open-source technologies, he added.

“Digital things overall — remote learning, telemedicine, digital finance — were greatly advanced,” he said. “So even though the pandemic has been terrible, it has pushed some of these innovations, including how quickly we make vaccines.”

But Gates warned that addressing the virus has to be done in an equitable way — rich countries shouldn’t get the power to control who gets access to vaccines. That’s why his foundation is working with global manufacturers, including the Serum Institute in India, to make sure there are sufficient dosage numbers at reasonable prices. He said he expects vaccines to put stop the spread of the Coronavirus in 2022, though he warned against complacency. “We can’t forget that another pandemic will come, so we need to invest and be ready,” he said.

MobiKwik announces Rs 52 crore funding from Hindustan Media Ventures

Sarthak Yadav — Fri, 04 Dec 2020 09:50:06 +0000

Today, MobiKwik the fintech firm announced that they have raised Rs 52 crore in funding, led by Hindustan Media Ventures, the investment arm of HT group.

MobiKwik co-founder and CEO Bipin Preet Singh said, “The HT group and Kris coming on board is very exciting for us and is an endorsement in our business model of bringing digital credit to 100 million Indians. We are on the road to IPO and look forward to their guidance on building a long-lasting sustainable company and creating impact via Financial Inclusion.”

The fintech firm reported it has witnessed increased traction in its digital credit card business and has pre-approved 15 million users for its credit product, which is availed by users for making payments via the MobiKwik wallet and the MobiKwik Blue Amex Card.

Piyush Gupta, Group CFO and CEO Strategic Investments of the HT group commented, “MobiKwik has carved out a unique spot for itself with its ”digital credit card model” within India”s fintech ecosystem. The company has demonstrated good financial performance by scaling revenue while becoming breakeven profitable.”

MobiKwik has doubled its revenue for three successive years and significantly reduced its cash burn to near zero, the company had declared Rs 379 crore in revenues as of the financial year ending March 2020, a growth of 133 per cent year-on-year, it added.

The funding round also saw participation from Infosys co-Founder Kris Gopalakrishnan”s family office, Pratithi. Gopalakrishnan said “A successful new business is one which creates jobs, is sustainable, and can run for a long time. The MobiKwik team is executing with this vision and I am happy to support and encourage them.”

Visa and ICICI collabrate to give a hand to fintech acceleration

Divya Joyce — Mon, 23 Nov 2020 10:29:01 +0000

Digital payments major Visa on Monday announced a collaboration with ICICI Bank on its ‘Visa in a Box’ programme for fintech acceleration.

Through this collaboration, fintech’s can access APIs and the developer sandbox of Visa and ICICI Bank, to rapidly build, test and deploy consumer payment applications, Visa said in a statement.

ICICI Bank is the first bank to partner with Visa for its ‘Visa in a Box’ programme in India. It has launched co-branded prepaid cards with three fintech’s across sectors like business banking, business expense management, and neo-banking.

For fintech’s, Visa brings its digital payment settlement capabilities and the bank brings its expertise in financial technology, understanding of the Indian market and payment solutions to drive innovations.

“The bank shares our vision of catalyzing fintech’s who are solving for the payment challenges of tomorrow – across digital issuance, credit access, small merchant acceptance, and commercial payments,” said T R Ramachandran, group country manager, India, and South Asia, Visa.

Visa and ICICI Bank will jointly develop programmes aimed at accelerating growth and innovation in their respective businesses. ICICI Bank will also have access to Visa’s growing network of fintech partners and provide guidance to get them to market in the most efficient way possible.

NBFCs, fintech firms among the hardest hit due to loan non-repayments

Akanksha Yadav — Tue, 17 Nov 2020 05:09:14 +0000

Banking industry experts aware of the happening confirmed on Monday that shadow banks including fintech lenders were the prime source of the rise in auto-debit failures that continued through October. These are automatic payments happening on a recurring basis where loan instalments are withdrawn every month from a bank account.

Largest failures were reported from low-rated borrowers of non-banking financial companies (NBFC), a few commercial vehicle borrowers and even some people who had taken loans from fintech lenders due to the hit of COVID-19 and a lot of these borrowers were stressed out even before the pandemic struck.

Latest data on auto-debit suggest that transactions on the National Automated Clearing House (NACH) platform, as much as 40.1 percent of auto-debit transactions by amounts in October had largely failed due to lack of sufficient funds, hence worsening from a bounce rate of February’s 31.5 percent.

“At least, large banks have a majority of their own customers as borrowers and the equated monthly instalment (EMI) debit is done through internal standing instructions. The NACH data does not capture these intra-bank mandates,” a senior official at State Bank of India (SBI) said in a statement.

“There is always a section of self-employed borrowers who do not pay on time but pay a couple of due instalments in one go. Such defaults also add to the number on NACH,” the official added. The bank officials emphasised that the current defaults are from borrowers who are slightly lower in credit quality and is mostly from NBFC customers.

Chief executive of Shriram Transport Finance Ltd, Umesh Revankar, said that the passenger transportation segment is still not fully functional and this has led to non-repayment by some borrowers and the NBFC expects least 2.5 percent of its loan book to be recast.

“Most of these people who are not able to pay, they are in that segment, which I briefly mentioned—aggregators, school buses and staff transportation. That’s the major chunk of people who are not able to pay because their business is not operational yet,” Revankar had stated on 30 October.

Not only has the pandemic disrupted the cash-flow of the consumers but has also forced them to borrow fresh loans from fintech lenders at a higher interest rate. Some companies charge more than 30 percent interest for personal loans and the consumers of such loans are primarily those who need immediate cash.

“It is a fact that most of the stress is coming from non-banks, including fintech. The segments such as unsecured loans and, to some extent, commercial vehicles, are under higher stress,” Prakash Agarwal, director and head-financial institutions at India Ratings and Research said. “Borrower profiles of non-banks are weaker and, hence, the pandemic impacted them more,” he added.

Fintech lenders are of the notion that with the required amount of counselling about the negative impact of non-payment and in some extreme cases offering a restructuring of loans will help the lenders improve their rates of collection.

MoneyTap’s co-founder and executive committee member at Digital Lenders’ Association of India (DLAI), Anuj Kacker, stated that October is the first-month receiving full repayments after six months of moratorium announced by the Reserve Bank of India.

“Most lenders, fintech and traditional, were expecting a higher bounce rate and, hence, this has not been a surprise. Based on several conversations with customers, the reasons vary from being unaware about the moratorium being lifted to loss of job/income,” Kacker said.