BFSI - NewNerve

Co-lending Model: A Collaborative Approach to Financial Inclusion in India, 2024

25Apr

By Ankit1 Comment

Blog, Banking, Digital Lending, Lending, Microfinance, NBFC

Co-lending Model: A Collaborative Approach to Financial Inclusion in India, 2024

The co-lending model has emerged as a significant innovation in the Indian financial landscape, aiming to bridge the credit gap and promote financial inclusion. This model involves collaboration between banks and non-banking financial companies (NBFCs), leveraging their respective strengths to offer wider access to credit for underserved segments. Stakeholders and their involvement: Banks: Contribute their robust risk management expertise, regulatory compliance, and access to low-cost funds. They typically originate the loan and conduct due diligence on borrowers. NBFCs: Bring their domain expertise in specific sectors, strong customer relationships, and agility in loan processing. They often handle customer acquisition, credit assessment, and loan servicing. Borrowers: Benefit...

Deep Dive into Challenges Faced by Fintech Companies in Selecting IT Services Vendors

25Apr

By Ankit4 Comments

Fintech, Blog, Global BFSI, Payments, Technology

Deep Dive into Challenges Faced by Fintech Companies in Selecting IT Services Vendors

The fintech industry has experienced explosive growth in recent years, driven by technological advancements and the increasing demand for innovative financial services. This rapid growth has created a significant demand for IT services to support various functions, including run, build, digital, and product engineering. However, selecting the right IT services vendor can be a complex and challenging process for fintech companies. Unique Challenges faced by Fintech Companies: Fintech companies operate in a highly regulated and competitive environment, with stringent security and compliance requirements. They also face the challenge of rapidly evolving technologies, requiring IT services vendors with expertise in cutting-edge solutions. Additionally, fintech companies often have complex le...

Kotak Bank’s Digital-Only Zero-Balance Savings Accounts Hit a Roadblock: RBI’s Action

25Apr

By Ankit1 Comment

Banking, BFSI, Goverment Notice/Circulars

Kotak Bank’s Digital-Only Zero-Balance Savings Accounts Hit a Roadblock: RBI’s Action

In a significant development within India’s banking sector, digital savings accounts have been reshaping traditional norms, offering unparalleled convenience and efficiency. Leading this transformation was Kotak811, which exemplified how digital banking is revolutionizing financial management in India. With features like instant activation, zero balance requirements, free virtual debit cards, and credit cards against fixed deposits (without employment or income proofs), Kotak811 met the demands of today’s tech-savvy generation. One standout feature was ActivMoney, allowing account holders to earn up to 7% interest p.a. on savings by automatically investing idle funds into fixed deposits, without penalties for withdrawal. Moreover, digital savings accounts have democratized access to...

RBI Bars Kotak Mahindra Bank From Onboarding New Customers Via Online, Mobile Banking

24Apr

By Ankit2 Comments

Banking, BFSI, Digital Lending, Goverment Notice/Circulars, NBFC, Regtech

RBI Bars Kotak Mahindra Bank From Onboarding New Customers Via Online, Mobile Banking

The Reserve Bank of India (RBI) has taken a decisive step by prohibiting Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels. Additionally, the bank is barred from issuing fresh credit cards. However, existing customers, including credit card holders, will continue to receive services from the bank. The regulatory action comes in response to significant concerns arising from the RBI’s IT examination of Kotak Mahindra Bank for the years 2022 and 2023. The central bank identified serious deficiencies and non-compliances in various critical areas: IT Inventory Management: The bank’s management of IT assets was found lacking. Patch and Change Management: Inadequate processes for managing software updates and changes. Us...

Evergreening in the Lending Ecosystem in India: Understanding the Practice and its Implications

24Apr

By Ankit1 Comment

Lending, BFSI, Digital Lending, Microfinance, NBFC, Regtech

Evergreening in the Lending Ecosystem in India: Understanding the Practice and its Implications

In the lending ecosystem of India, there are various practices and strategies employed by financial institutions to manage their loan portfolios. One such practice that has garnered attention is "evergreening." Evergreening refers to a process wherein lenders extend new credit or provide additional funds to borrowers who are struggling to repay existing loans, primarily to maintain the appearance of a performing loan. In this article, we will explore the concept of evergreening in the Indian lending ecosystem, its implications, and the regulatory measures in place to address this practice. Understanding Evergreening It involves granting additional credit or restructuring existing loans to borrowers who are facing financial distress, often without addressing the underlying issues causin...

Building Trust and Confidence: The Regulatory Ecosystem of Lending in India

24Apr

By Ankit1 Comment

Lending, BFSI, Blog, Digital Lending, Goverment Notice/Circulars, NBFC, Regtech

Building Trust and Confidence: The Regulatory Ecosystem of Lending in India

Lending plays a crucial role in India's financial landscape, providing individuals and businesses with access to capital for various purposes. To ensure the stability, transparency, and fairness of lending practices, the lending space in India operates within a robust regulatory ecosystem governed by multiple authorities and regulations. In this article, we will delve into the key components of the regulatory framework for lending in India, shedding light on the various entities and regulations that shape the lending landscape. Reserve Bank of India (RBI): At the heart of India's lending regulatory framework stands the Reserve Bank of India (RBI). As the central banking institution, the RBI plays a pivotal role in regulating the lending sector. It formulates and implements policies a...

23Apr

By AnkitNo Comments

Global BFSI, Fintech, Payments, Startups

Thunes Announces Acquisition of Tilia LLC to Boost U.S. Growth and Online Gaming Market Presence

Thunes Announces Agreement to Acquire Tilia LLC Thunes, the global cross-border payments company, has taken a significant step to enhance its foothold in the United States and tap into the burgeoning online gaming market. The company recently finalized a definitive agreement to acquire Tilia LLC, an all-in-one payments platform. Tilia LLC, licensed in 48 U.S. states and territories, specializes in providing payment solutions for various digital realms, including online games, virtual worlds, creator economies, and in-app purchases. With this strategic acquisition, Thunes aims to accelerate its growth trajectory and expand its services within the U.S. Key Highlights of the Acquisition: Enhanced Payment Solutions: Thunes’ global network, which facilitates real-t...

Stablecoins: Promises vs. Reality: BIS report

23Apr

By Ankit1 Comment

CBDC, Fintech, Global BFSI, International Reports, Payments, Technology

Stablecoins: Promises vs. Reality: BIS report

Overview: The paper examines the evolution of the stablecoin market over the past decade and investigates whether stablecoins have truly lived up to their name in terms of stability. Stablecoins are a subcategory of cryptoassets designed to maintain a stable value relative to a specified peg. Key Findings: Classification of Stablecoins: The authors classify stablecoins into four distinct types: Those backed by fiat currency. Those backed by commodities. Those backed by other cryptoassets. Algorithmic stablecoins (not backed by any specific asset). Volatility and Parity: While stablecoins backed by fiat currency, commodities, or other cryptoassets have generally been less volatile than traditional cryptoassets, none of them has cons...

RBI Imposes Penalty on Fatehabad Central Cooperative Bank for Non-Compliance with Unclaimed Funds Transfer Rules

23Apr

By Ankit1 Comment

BFSI, Banking, Goverment Notice/Circulars

RBI Imposes Penalty on Fatehabad Central Cooperative Bank for Non-Compliance with Unclaimed Funds Transfer Rules

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2 lakh on The Fatehabad Central Cooperative Bank Limited, Fatehabad, for contravention of the provisions of section 26A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act). The penalty was imposed based on the findings of a statutory inspection conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to the bank’s financial position as on March 31, 2022. The inspection revealed that the bank had not transferred the eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time limit. This action is in violation of the provisions of section 26A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act). Also Read: RBI Imp...

RBI Imposes Monetary Penalty on Panvel Co-operative Urban Bank

23Apr

By Ankit1 Comment

BFSI, Goverment Notice/Circulars

RBI Imposes Monetary Penalty on Panvel Co-operative Urban Bank

In a move to ensure compliance with regulatory directives, the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.00 lakh on The Panvel Co-operative Urban Bank Ltd., Raigad, Maharashtra. According to the press release, the penalty was levied based on the findings of a statutory inspection conducted by the RBI, which revealed the bank's non-compliance with directions issued under the 'Supervisory Action Framework' (SAF) for Primary (Urban) Co-operative Banks (UCBs). Specifically, the RBI found that the bank had sanctioned fresh loans carrying a risk weight of more than 100%, in violation of the specific directions issued under the SAF. After considering the bank's response to the show-cause notice, the RBI determined that the charge of non-compliance was sustained, warra...