May 2024 - NewNerve

11May

By AnkitNo Comments

BFSI

15 NBFCs Voluntarily Surrender Certificate of Registration to RBI: Implications and Challenges

In a recent development, 15 Non-Banking Financial Companies (NBFCs) in India have surrendered their Certificate of Registration to the Reserve Bank of India (RBI). This move has garnered attention as it raises questions about the challenges faced by NBFCs and the regulatory environment in the country. In this article, we will explore the implications of this decision and its potential impact on the financial sector. Background NBFCs play a crucial role in the Indian financial system, providing an alternative source of credit to individuals and businesses that may not have access to traditional banking services. These institutions accept deposits, make loans, and offer various financial services similar to banks, but they are not licensed to operate as full-fledged banks. ...

Simpl Slashes 100 Jobs in Restructuring Bid to Reach Profitability

10May

By AnkitNo Comments

BFSI, Fintech

Simpl Slashes 100 Jobs in Restructuring Bid to Reach Profitability

Fintech startup Simpl, known for its "buy now, pay later" (BNPL) services, has laid off around 100 employees in a restructuring exercise. This news comes amidst a broader trend of job cuts in the Indian tech industry, as companies grapple with slowing economic growth and rising inflation. Key Points: Job Cuts: Around 100 employees across different teams and verticals have been laid off. Reasoning: Simpl cites the need to improve operational efficiencies, reduce costs, and achieve profitability by mid-2025. Severance Package: Impacted employees will receive a severance package including two months' salary, 15 days' salary for each year of service, medical insurance, and outplacement services. Previous Layoffs: This is the second round of layoffs for Simpl in the past year, ...

Zeta Revolutionizes Credit Access with New UPI-Based Stack: Aims for $1 Trillion Market by 2030

10May

By Ankit1 Comment

BFSI, Digital Lending, Fintech, Lending, Startups, Technology

Zeta Revolutionizes Credit Access with New UPI-Based Stack: Aims for $1 Trillion Market by 2030

Zeta, a leading fintech startup, has launched a new technology stack to support credit line-based transactions on the Unified Payments Interface (UPI). This move aims to revolutionize the way credit is accessed and utilized in India, potentially leading to a trillion-dollar market by 2030. Key Highlights: Zeta's new stack allows banks to offer credit lines to customers directly through UPI, eliminating the need for separate credit card applications. The company aims to process 50% of all UPI credit disbursals by 2030, signifying a massive opportunity for growth. Zeta will act as a technology service provider (TSP) for financial institutions, handling everything from customer onboarding and underwriting to lifecycle management and analytics. This initiative aligns with Zeta's...

Declining CASA Ratios: A Deep Dive into Banking Trends, in Q4

9May

By AnkitNo Comments

Banking, BFSI

Declining CASA Ratios: A Deep Dive into Banking Trends, in Q4

The CASA ratio, which measures the share of low-cost CASA deposits, experienced a decline year-on-year by 40-730 basis points (bps) for banks reporting their Q4 FY24 earnings. This decline occurred despite sustained high deposit rates due to tight liquidity conditions and robust demand for credit, particularly in retail and unsecured loans. Here are some key points: Private Banks vs. PSU Banks: As of December 2023, private banks saw a year-on-year decline of 393 bps to 38.7% in CASA ratios, while PSU banks declined by 187 bps to 38.5%. This decline impacted lenders’ margins. Sequential CASA ratios remained stable or slightly improved in the final quarter due to increased deposit accumulation and proactive efforts by banks to attract granular deposits. Kotak Mahindra Bank...

Reserve Bank of India’s (RBI) Payments Vision 2025 document: Key Points

9May

By Ankit1 Comment

BFSI, Blog, Goverment Notice/Circulars, Review

Reserve Bank of India’s (RBI) Payments Vision 2025 document: Key Points

The Payments Vision 2025, published by the Reserve Bank of India (RBI), outlines the strategic direction for India's payment systems until December 2025. It aims to enhance payment systems, address challenges in cross-border payments, and promote cost, speed, access, and transparency. The document emphasizes the importance of safe, secure, reliable, accessible, affordable, and efficient payment systems for economic development and financial inclusion. Key Highlights of Payments Vision 2025: Importance of Payment Systems: The document recognizes the crucial role of payment systems in economic development and financial inclusion. It highlights the need for safe, secure, and efficient payment options to support India's growth. Advancements in Digital Payments: The document acknowledg...

UPI Duopoly: NPCI Faces Dilemma as Deadline Looms

8May

By Ankit1 Comment

Fintech, BFSI, Payments

UPI Duopoly: NPCI Faces Dilemma as Deadline Looms

The Unified Payments Interface (UPI) has revolutionized digital payments in India, but a UPI duopoly is emerging with PhonePe and Google Pay dominating the market. The National Payments Corporation of India (NPCI), the governing body of UPI, is considering extending the market cap deadline to address concerns about anti-competitive practices. UPI Duopoly Problem Currently, PhonePe and Google Pay account for over 80% of UPI transactions, leaving little room for other players. This raises concerns about reduced competition, innovation, and consumer choice. The NPCI's market cap deadline of 30% for third-party apps (TPAs) was intended to address this issue. Let's delve deeper into the issues and explore potential solutions: Challenges: Reduced Competition: The dominance of PhoneP...

Lendingkart Secures USD 10 Million Boost for SME Lending via BlueOrchard ECB

8May

By AnkitNo Comments

BFSI, Digital Lending, Lending, Startups

Lendingkart Secures USD 10 Million Boost for SME Lending via BlueOrchard ECB

Lendingkart, a leading fintech company in India, has secured USD 10 million via an external commercial borrowing (ECB) from a BlueOrchard fund. This funding will be used to further expand the company's lending operations and reach a wider customer base. Lendingkart offers a range of financial products and services to small and medium-sized enterprises (SMEs) in India. The company has disbursed over INR 10,000 crores in loans to over 1.5 lakh customers since its inception in 2014. The ECB from BlueOrchard will provide Lendingkart with additional capital to support its growth plans. The company plans to use the funds to expand its product portfolio, hire new talent, and enter new markets. Commenting on the funding, Harshvardhan Lunia, Co-founder & CEO of Lendingkart, said: "We ...

PSBs’ Spreads Hit 10-Year Low: Implications for Lending, Deposits, and Profitability

8May

By AnkitNo Comments

BFSI, Lending, NBFC

PSBs’ Spreads Hit 10-Year Low: Implications for Lending, Deposits, and Profitability

Public Sector Banks (PSBs) in India have seen their spreads between lending and deposit rates shrink to a 10-year low of 2.28%, according to data from the Economic Times BFSI. This is significantly lower than the 3.81% spread maintained by Private Banks (PVBs). This narrowing of spreads reflects several factors, including: Increased competition: The banking sector in India is becoming increasingly competitive, with both PSBs and PVBs vying for market share. This has put pressure on banks to offer lower lending rates and higher deposit rates, leading to a compression of spreads. RBI's policy stance: The Reserve Bank of India (RBI) has been maintaining an accommodative monetary policy stance in recent months, which has helped to keep interest rates low. This has also contributed t...

RBI’s Gold Rush: Stacks Up 18.5 tonnes of gold in Jan-Mar

8May

By AnkitNo Comments

BFSI, Economics, Goverment Notice/Circulars

RBI’s Gold Rush: Stacks Up 18.5 tonnes of gold in Jan-Mar

Global central banks continued to bolster their gold reserves in March, with significant purchases led by emerging market banks, according to data from the World Gold Council (WGC). Central banks collectively added 16 tonnes of gold to their reserves during the month, matching the additions seen in February. The Reserve Bank of India (RBI) notably contributed to this trend, purchasing 18.5 tonnes of gold in the first quarter of 2024, propelling its reserves to a record high. By the end of March, India’s gold reserves stood at 822.1 tonnes, comprising 9% of its total reserves and ranking it as the 10th-largest holder of official gold globally. The RBI’s gold acquisitions in the first quarter already exceeded its total purchases of 16.2 tonnes throughout 2023. So far this year, only Tu...

Top Cross-Border Payment Companies (Global): Navigating the Landscape of Providers

7May

By Ankit1 Comment

Payments, Blog

Top Cross-Border Payment Companies (Global): Navigating the Landscape of Providers

Cross-border payments have become increasingly vital in today's interconnected world, where businesses and individuals need to transfer funds across different countries efficiently and securely. With the rise of e-commerce and global trade, the demand for reliable cross-border payment solutions has grown significantly. In this article, we will explore and discuss some of the top cross-border payment companies that are shaping the global payments landscape. PayPal: PayPal is a household name in the world of digital payments. With its extensive global reach and user-friendly interface, PayPal enables individuals and businesses to send and receive money across borders seamlessly. Users can link their bank accounts, credit cards, or use their PayPal balance to conduct transactions. The c...