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  • Writer's pictureAK & Partners

AKP Banking & Finance Digest- June 19, 2023

Weekly Round-up | Updates

1. Regulatory Updates

1.1. India

1.1.1. Reserve Bank of India (RBI) issues guidelines for the collection of indirect taxes through the ICEGATE payment gateway

RBI has modified paragraph 21 of the Master Circular on Conduct of Government Business by Agency Banks. Herein certain transactions related to the collection of indirect taxes through the ICEGATE (CEP) payment gateway are now being reported by agency banks to Mumbai Regional Office (MRO), RBI, with effect from April 01, 2023.

The agency commission claim for central government transactions reported to CAS, Nagpur, RBI, will be continued to be settled at CAS, Nagpur, RBI. Moreover, the formats for claiming agency commission for all agency banks and separate and distinctive sets of certificates to be signed by the branch officials and Chartered Accountants or Cost Accountants are given in Annex 2, Annex 2A and Annex 2B, respectively. RBI

1.1.2. RBI releases clarification on reports claiming missing banknotes

RBI has clarified its stance on certain reports circulating in the media alleging missing banknotes printed by the banknote printing press. RBI claims that the information obtained under the Right to Information Act, 2005, is erroneously interpreted and further informed that there are robust systems in place for the reconciliation of banknotes printed at various press and supplied to RBI, including protocols to monitor the production, storage and distribution of banknotes. RBI

1.1.3 Two non-banking financial corporations (NBFCs) surrender their Certificate of Registration to RBI

Two NBFCs, Equitas Holding Limited and Mukand Global Finance, have surrendered their Certificate of Registration (“COR”) to RBI citing NBFC ceasing to be a legal entity due to amalgamation/ merger/ dissolution/ voluntary strike-off, etc. RBI

1.2. Monetary Penalties

1.2.1. RBI imposed monetary penalties on several financial institutions-


Penalty Imposed


INR 6 Lakh (Indian Rupees Six Lakh Only)

Contravention of RBI Directions to Urban Cooperative Banks on (i) ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and (ii) Know Your Customer (KYC) Directions, 2016.

INR 60.20 lakh (Rupees Sixty Lakh and Twenty Thousand only)

Contravention of the provisions of the Banking Regulation Act, 1949 (BR Act) and the Banking Regulation (Co-operative Societies) Rules, 1966 (BR Rules); non-compliance with the Reserve Bank of India (Know Your Customer) (KYC) Directions, 2016 as well as RBI Directions on “Customer Service in State / District Central Co-operative Banks (StCBs / DCCBs)”; non-compliance with the directions on “Membership of Credit Information Companies (CICs)” under the Credit Information Companies (Regulation) Act, 2005 [CIC (R) Act]; and non-compliance with the directions on “Off-site Surveillance System - Revision of Returns” issued by NABARD under Section 27(3) of the BR Act.

INR 2 lakh (Rupees Two Lakh only)

Non-compliance with the provisions of Section 26 A (2) read with Section 56 of the BR Act.

INR 10 lakh (Rupees Ten Lakh only)

Non-compliance with the directions issued by RBI on ‘Reporting of Unauthorised Transactions by Customers to Banks’, ‘Names as Appearing in the Certificate of Registration and the Licence - Use of - Primary (Urban) Co-operative Banks (UCBs)’ and ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’.

INR 20 lakh (Rupees Twenty lakh only)

Non-compliance with specific provisions of the “Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016”.

1.3. Bangladesh

1.3.1. Bangladesh Bank approves guidelines on digital bank

With an aim to expedite the process of cashless transactions and digital transformation in the country, Bangladesh Bank approves guidelines to be followed by applicants desiring to establish a digital bank in the country. Bangladesh Bank

2. Trends

2.1. Indian fintech industry funding is down by 40% in 2022, however, will show improvement in 2023- IIFL Fintech

The funding in the Indian fintech industry declined by 40% (forty percent) in 2022 due to factors including the global economic slowdown and the war in Ukraine. While the year 2022 saw a steep decline in the number of funded startups, it was still at par with the pre-Covid level. Using the data, a calculative inference can be drawn that actually more startups are being funded in the country but the big cheques or late-stage venture capital funding have reduced. The report by IIFL states that more than 60 per cent of the total deals done in 2022 were in the early stage (Seed to Series A), while the same was not more than 45% (forty- five per cent) in 2021. Financial Express

2.2. Revfin secures USD 5 million in funding from US International Development Finance Corporation for EV financing

Revfin, based out of Delhi, provides loans for buying two-wheeler, three-wheeler and small fleets of electronic vehicles (EVs). Revfin has claimed that it disburses loans digitally to borrowers in 16 minutes and stated that it shall use the funds to strengthen its presence in the country and introduce new products. The company aims to finance 2 million EVs in five years. INC42

2.3. Next phase of the bank’s growth will come from fintech, says Federal Bank’s CEO & MD

According to Shyam Srinivasan, Chief Executive Officer (CEO) and Managing Director (MD) of Federal Bank, the size of the domestic remittances business is pegged above INR 1,00,000 crore. In the late 1980s & 1990s, remittances were a small-ticket but high-volume business. However, the ticket size has grown manifold in the last couple of decades and the bank is reaping the early bird advantage. The flow of remittances towards the eastern and northern parts of the country is growing fast. The Hindu

2.4. Pepper Group will invest USD 150 million in India over the next four years to launch its fintech startup, Pepper Money

Pepper Group is based in Singapore and has operations in the UK, Australia, South Korea and Spain. It now aims to introduce various personal finance products to the Indian market, such as personal loans, credit cards, and buy now, pay later services. The Indian operations of Pepper Money, scheduled to commence in the latter half of 2023, will be overseen by Abhishek Kothari (former co-founder of FlexiLoans). Fintech Futures

3. Sector Overview

4. Business Updates

4.1. Digital Lenders Association of India plans to bring in a new code of conduct

The Digital Lenders Association of India is planning to introduce a new code of conduct within a month, which shall be adopted as a framework for its proposed self-regulatory organization. The code shall be applicable to over 80 (eighty) fintech members of the industrial body.

According to the CEO of the association, a two-tier structure shall be put in place for the investigation of complaints. In case a fintech is unhappy with a decision taken against the company, it can escalate the matter to a higher appellate panel, the members of which will change periodically. The new model of conduct shall entail appraising RBI of granular data regularly. Every quarter, it shall inform the central bank of penal advisories that they have sent out to members. Financial Express

4.2. Former Flipkart Senior Vice President (SVP) Anil Goteti ventures into the fintech space, launches Scapia

Anil Goteti, former SVP of Flipkart and a consumer tech veteran has launched a credit card and travel rewards platform – Scapia, marking his venture into the fintech space. Scapia offers digital credit cards, in partnership with Federal Bank, allowing users to earn rewards on each transaction in the form of Scapia coins, which can be redeemed for travel bookings within the app itself. Yourstory


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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