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AKP Banking & Finance Digest- July 17, 2023

Updated: Jul 19, 2023

Weekly Round-up | Updates


1. Regulatory Updates


1.1. India


1.1.1. Reserve Bank of India cancels Certificate of Registration of 4 Non-Banking Financial Companies

In exercise of the powers conferred under Section 45-IA (6) of the Reserve Bank of India Act, 1934 ("RBI Act"), the Reserve Bank of India (“RBI”) cancelled the Certificate of Registration (“CoR”) of the following non-banking financial companies ("NBFCs"):

1.1.2. 11 NBFCs surrender their CoR to RBI

11 NBFCs, as mentioned below in the table, surrendered their CoR to RBI, in furtherance of which RBI, exercising the powers under Section 45-IA (6) of the RBI Act, cancelled their CoRs.

S. No

Name of the Company

Ground for Cancellation

1

Exit from NBFC business

2

Exit from NBFC business

3

Exit from NBFC business

4

Exit from NBFC business

5

Non-fulfilment of the criteria prescribed for an unregistered Core Investment Company (CIC) not requiring registration.

6

​Non-fulfilment of the criteria prescribed for an unregistered Core Investment Company (CIC) not requiring registration.

7

Non-fulfilment of the criteria prescribed for an unregistered Core Investment Company (CIC) not requiring registration.

8

Non-fulfilment of the criteria prescribed for an unregistered Core Investment Company (CIC) not requiring registration.

9

Cancelled as they ceased to exist as a separate legal entity due to amalgamation/merger/dissolution/ voluntary strike-off, etc.

10

Cancelled as they ceased to exist as a separate legal entity due to amalgamation/merger/dissolution/ voluntary strike-off, etc.

11

​Cancelled as they ceased to exist as a separate legal entity due to amalgamation/merger/dissolution/ voluntary strike-off, etc.

1.1.3. RBI cancels the license of the following banks

S. No

Name of the Bank

Reason of Cancellation

1

Inadequate capital and earning prospects causing the violation of Sections 11(1), 22(3) and 56 of the Banking Regulation Act, 1949.

2

Insufficient capital and earning prospects as being an infringement of Sections 11(1), 22(3) and 56 of the Banking Regulation Act, 1949.

1.1.4. RBI and the Central Bank of the United Arab Emirates sign two Memorandum of Understanding to boost cross-border transactions and payments.

RBI and the Central Bank of UAE have signed two Memorandum of Understanding (“MoU”) to (i) develop a framework to bring in the use of local currencies through the Indian Rupee (INR) and UAE Dirham (AED) to enhance cross-border transactions, and (ii) linking payment and messaging systems. Through the MoU, both nations have agreed to (a) link the Fast Payment Systems (FPS) Unified Payments Interface (“UPI”) of India along with the Instant Payment Platform (IPP) of UAE; (ii) interlink the respective card switch (RuPay switch and UAESWITCH); and, (iii) to take up linking payment messaging systems, i.e., Structured and Financial Messaging Systems (SFMS) of India with the messaging system in UAE. RBI


2. Trends


2.1. FuelBuddy launches Buy Now Pay Later

Allowing customers to buy fuel on credit with zero interest and providing a 22-day (Twenty-two days) repayment period, FuelBuddy has launched its Buy Now Pay Later (“BNPL”) service to enhance sales and expand its market presence. The fuel delivery startup, established in 2018, intends to enter the lubricant market with doorstep delivery to customers and also plans for geographic expansion and venture beyond the domestic market to obtain a better profit margin. It has also collaborated with state-run oil corporations, including Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL). Startup City


2.2. France to adopt India’s Unified Payments Interface

The National Payments Corporation of India (NPCI) has signed an MoU with France’s online payment system, Lyra. Soon the UPI payment system will roll out in France, enabling payments in INR for Indian tourists. This will create a window for Indian innovation in the European market. Similarly, India’s UPI and Singapore’s PayNow have signed an agreement to promote seamless, real-time, cross-border transactions between the two countries. India is also in talks with the United States of America, Europe and West Asia to promote the same. The Economic Times


2.3. Wallet Factory launches digital wallet engine

Wallet Factory has partnered with IMS Ventures to launch a digital wallet engine that provides users with efficient and safe Application Programming Interface (API) based integration for all the needed digital wallet benefits and functionality. This initiative aims to extend the digital wallet benefits for businesses and firms along with mobile e-Wallet applications. The Paypapers

2.4. Amazon Pay India’s director reveals that they are eying at the top position in the market

The whole-time director of Amazon Pay India, Vikas Bansal, reveals that their goal is to be at the top in the payment aggregator space. Talking about Amazon Pay’s payments and credit (BNPL) strategies, he stated that Amazon always encourages competition in the market. He acknowledges that the market is large and growing rapidly with the advent of multiple players; nonetheless, Amazon Pay maintains the ambition of being at the top and dominating the market. Mint


3. Sector Overview



4. Business Updates


4.1. Bain Capital, Carlyle and Cerberus in talks to buy Adani Capital

Private equity firms Bain Capital, Carlyle and Cerberus are planning to jointly buy Adani group’s NBFC Adani Capital, which is in pursuit of divesting its non-core business to concentrate more on its core domains. Adani Capital, led by CEO Gaurav Gupta, is expected to be entirely bought by these three firms as indicated in the report. Adani Capital is set out to raise growth capital from international strategic and financial investors and expects a valuation of INR 2,000 crore (Indian Rupees Two Thousand Crores only). Zee Business


4.2. Small shopkeepers are facing the challenge of fulfilling the Know-Your-Customer requirement for accepting card payments through the Quick Response code

After the integration of RuPay with UPI, small shopkeepers, who can accept credit card payments through a Quick Response code (QR code), are facing the hurdle of complying with the know-your-customer (“KYC”) requirements. As per the guidelines of the payment network, to accept credit card payments, a merchant KYC process is mandatory, and this has vitiated the simplicity of accepting payments through UPI. Though the RBI guidelines permit remote verification of KYC, the market regulator, the Securities Exchange Board of India (“SEBI”), provides a much more flexible set of norms. The KYC norms under SEBI allow video verification employing Artificial Intelligence (AI) software for customer identification. Certain recommendations have also been made to make this process simpler and less stringent for the user's convenience in light of the difficulties faced by small-shop owners throughout India. The Times of India


4.3. Karnataka Government plans to introduce a platform for the Micro, Small and Medium Enterprises to access fintech firms

The government of Karnataka plans to launch an integrated platform enabling Micro, Small and Medium Enterprises (“MSMEs”) to access fintech companies in the state. Through an announcement on Twitter, the Minister of Industries, Karnataka, stated that the state has emerged as a fintech hub and facilitating access to fintech companies for the MSMEs will enhance the ease of doing business and consequently result in the economy's overall growth. The Financial Express


4.4. Large-scale data breach against State Bank of India employees

Sensitive data of over 12,000 (Twelve thousand) State Bank of India (SBI) employees were leaked online through Telegram channels, including their names, contact numbers and addresses, data regarding SBI passbook and PAN numbers, account numbers, and photo IDs. In recent years, data leaks and breaches have significantly increased in India. According to a report by the CyberPeace Foundation, there were over 1,250 data breaches in India in 2022, as compared to 550 in 2021.Business Today


Disclaimer


The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.


For further queries or details, you may contact:


Mr Anuroop Omkar,

Partner, AK & Partner

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