Regtech - NewNerve

The Power of AI in Customer Service and Compliance Management

24Jun

By AnkitNo Comments

BFSI, AI, Regtech, Technology

The Power of AI in Customer Service and Compliance Management

Artificial intelligence (AI) is rapidly changing the way businesses operate, and two key areas experiencing significant transformation are customer service and compliance management. AI-powered solutions are automating tasks, streamlining processes, and enhancing customer experiences, while also offering innovative approaches to regulatory compliance. AI: Revolutionizing Customer Service The rise of AI in customer service is driven by the desire to provide faster, more personalized, and efficient support. AI technologies like chatbots, virtual assistants, and machine learning are transforming the customer experience: Chatbots: These AI-powered conversational agents use natural language processing (NLP) to understand customer queries and provide automated responses. They can answer f...

RBI’s Directions To Improve Cyber Resilience across Digital Payments Ecosystem

4Jun

By Ankit3 Comments

BFSI, Cyber Crime, Goverment Notice/Circulars, Regtech

RBI’s Directions To Improve Cyber Resilience across Digital Payments Ecosystem

The Reserve Bank of India (RBI) has taken a significant step towards bolstering the security of India's digital payments ecosystem with the release of its Draft Master Directions on Cyber Resilience and Digital Payment Security Controls for Payment System Operators (PSOs) on June 2, 2023. These Directions aim to improve overall information security preparedness, with a strong focus on cyber resilience, and are a testament to the RBI's commitment to safeguarding the integrity and reliability of digital transactions in India. A Multi-Layered Approach to Security: The Directions adopt a comprehensive approach to security, encompassing multiple layers of protection: Governance and Accountability: PSOs are mandated to establish a Board-approved Information Security (IS) policy, outli...

The RBI’s Regulatory Sandbox: Fostering Innovation in India’s FinTech Landscape, 2024

15May

By AnkitNo Comments

BFSI, Fintech, Goverment Notice/Circulars, Regtech

The RBI’s Regulatory Sandbox: Fostering Innovation in India’s FinTech Landscape, 2024

The Reserve Bank of India (RBI) has established itself as a leader in fostering innovation in the country's rapidly evolving FinTech landscape. In August 2019, the RBI launched its Regulatory Sandbox (RS), becoming one of the few countries with such an ecosystem. This initiative provides a controlled environment for eligible entities to live test their innovative products and services, enabling regulated and orderly growth of the FinTech sector in India. The RS operates through thematic cohorts, focusing on specific areas of innovation. Past cohorts have addressed themes such as retail payments, cross-border payments, MSME lending, and prevention of financial fraud. To ensure continuous innovation, the RS also accepts "On Tap" applications for closed themes, currently open for the first...

Regulators and Associations in the Indian Fintech Landscape, 2024

4May

By Ankit4 Comments

BFSI, Blog, Regtech

Regulators and Associations in the Indian Fintech Landscape, 2024

The Indian Fintech sector operates within a complex regulatory framework involving multiple entities. Let's delve into the key regulators and associations that play a crucial role in shaping and guiding this dynamic ecosystem: 1. Regulators: Reserve Bank of India (RBI): The central bank of India, RBI, is responsible for regulating various aspects of the financial system, including payments, banking, and lending. It has played a significant role in fostering innovation within the Fintech space through initiatives like regulatory sandboxes and the launch of UPI. Securities and Exchange Board of India (SEBI): SEBI regulates the securities market in India, overseeing activities related to stock exchanges, mutual funds, and investment advisors. Fintech companies involved ...

Transparency in Digital Lending: RBI’s New Draft Guidelines for Loan Aggregators

27Apr

By Ankit1 Comment

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

Transparency in Digital Lending: RBI’s New Draft Guidelines for Loan Aggregators

The Reserve Bank of India (RBI) has recently unveiled a draft circular that outlines a framework for loan product aggregation by lending service providers (LSPs). The primary objective of this initiative is to enhance transparency for borrowers in the credit intermediation process. Let’s delve into the details of this significant development. Background and Challenges In the digital lending space, LSPs play a crucial role by offering aggregation services for loan products. These LSPs, or even regulated entities (REs) acting as LSPs, establish outsourcing arrangements with multiple lenders. Their digital lending apps/platforms (DLAs) match borrowers to suitable lenders. However, a critical challenge arises: borrowers often lack upfront information about the potential lender. I...

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...

Wise Faces Licensing Hurdles: Discontinues E-Wallet Services in Indonesia

19Apr

By AnkitNo Comments

Fintech, Global BFSI, Payments, Regtech

Wise Faces Licensing Hurdles: Discontinues E-Wallet Services in Indonesia

In a recent development, Wise, the popular online money transfer service, has announced its decision to discontinue e-wallet services for its users in Indonesia due to licensing Challenges. Effective from May 23, 2024, Wise users in Indonesia will no longer be able to store funds within the app's e-wallet. This decision comes as a result of regulatory requirements, as Wise currently lacks the necessary license to operate as an electronic money provider in Indonesia, as mandated by Bank Indonesia's regulation. Background: Wise's Entry to Indonesian Market Wise entered the Indonesian market in 2020 and has been backed by its local entity, PT Wise Payments Indonesia, which is licensed by Bank Indonesia as a Fund Transfer Provider. While Wise has been successful in providing core remittance ...

Decoding RBI’s Draft Guidelines for Payment Aggregators

19Apr

By Ankit1 Comment

Fintech, Goverment Notice/Circulars, Payments, Regtech

Decoding RBI’s Draft Guidelines for Payment Aggregators

The Reserve Bank of India (RBI) has recently unveiled draft guidelines for payment aggregators (PAs), and industry experts believe that these regulations are both pivotal and timely. Let’s delve into the details and understand why these guidelines are significant. Boosting the PA Ecosystem and Enhancing Trust The proposed regulations aim to bolster the PA ecosystem, improve digital trust, and promote ethical practices. Here are the key takeaways: Level Playing Field: The guidelines ensure a level playing field by defining PAs as entities that onboard merchants and facilitate payment aggregation for goods and services. This includes both online and physical point-of-sale (PoS) payment modes. Notably, the updated definition now includes physical PoS payment providers w...