Last Week's 15 Fintech Updates You MUST Know

Happy Monday everyone!

Today I am back with another weekly update for the Fintech Companies. Covering updates in the regulatory or economic side of the Fintech market for Indian companies.

If you run a Fintech Company in India. Or you plan on expanding your Fintech Company in India. Then this becomes important for you.

Here are the main things that happened in the last week.

A) Fintech Trends: Major Industry Shifts and Strategic Moves

1) RBI Approves Tata Communications’ Exit from Payment Business with Findi Deal

Regulatory Green Light: The Reserve Bank of India (RBI) has approved Tata Communications to divest 100% stake in its payments subsidiary Tata Communications Payment Solutions Ltd (TCPSL) to Findi’s Indian arm, Transaction Solutions International.

Deal Highlights:

• Valued at ?330 crore (A$59.1 million), with an additional ?75 crore (A$13.4 million) based on interchange adjustments.
• Strengthens Findi’s position in ATMs and digital payments, moving towards a payments bank model.

Impact on India’s ATM Landscape:

• Findi now controls 12,000+ ATMs across brown and white label categories.
• Expansion of Indicash ATMs to rural areas, boosting financial inclusion.

Strategic Expansion: Findi’s second major acquisition in 2025 follows its BankIT takeover, bringing its merchant base to 180,000+.

2) Niyogin Fintech Splits NBFC and iServeU for Separate Listings

Corporate Restructuring: Fintech firm niyogin is demerging its NBFC business and iServeU (iSU), listing them as independent entities.

Key Objectives:

• NBFC Arm (Niyogin Finserv): Expanding lending operations, leveraging low client acquisition costs and data-driven decision-making.
• iServeU (iSU): Moving towards a SaaS-based model, reducing reliance on revenue-sharing partnerships.

Leadership Insights: Founders Amit Rajpal and Gaurav Patankar emphasized this move as part of a long-term vision to enhance financial growth.

3) Ujjivan Small Finance Bank Seeks Universal Banking License

Application Submitted: Ujjivan Small Finance Bank has formally applied for an upgrade to a universal bank, becoming the second small finance bank to do so after AU Small Finance Bank.

Benefits of the Transition:

• Reduced priority sector lending target (from 75% to 40%).
• Elimination of 50% lending cap on loans below ?25 lakh.
• Lower capital adequacy requirement than small finance banks.

RBI Approval Criteria: Must have a net worth of ?1,000 crore, be profitable, and maintain low non-performing assets (NPAs).

4) OnEasy.AI Wins ‘Fintech Startup of the Year’ at Business Eminence Awards 2024

Recognition for Innovation: OnEasy.AI, an AI-driven fintech startup, won the Fintech Startup of the Year at the Business Eminence Awards 2024.

Why It Won:

• Simplifies financial management for SMEs and startups.
• Provides AI-powered automation for GST registration, tax filing, CFO services, and payroll.

Founder’s Statement: CEO CA Abhishek Boddu expressed that the award reinforces their mission to empower entrepreneurs through technology-driven financial solutions.

B) India’s Economic Landscape: Growth, Investments, and Market Shifts

1) Cashfree Payments Raises $53 Million in Fresh Funding

Investment Round: Bengaluru-based Cashfree Payments secured $53 million in funding led by Korean digital giant Krafton and Apis Growth Fund II.

Key Growth Areas:

• Cross-border payments expansion.
• Security innovations and international expansion.

Market Position:

• Processes $80 billion transactions annually.
• Serves 800,000+ merchants, including Swiggy, Zepto, Bajaj Finance, and BigBasket.
• Expanding operations in the United Arab Emirates (UAE).

2) Paytm to Acquire 25% Stake in Brazilian Fintech Dinie for Global Expansion

Strategic Move: Paytm Cloud Technologies Ltd (PCTL) to invest $1 million (?8.7 crore) to acquire 25% stake in Brazilian fintech Dinie.

Why Brazil?

• Expanding Paytm’s presence in Latin American fintech markets.
• Gain insights into Brazil’s merchant payment ecosystem.

Wider Global Push:

• Expanding into UAE, Saudi Arabia, and Singapore.
• Investing ?20 crore per subsidiary in international markets.

3) Nifty 50 Index Reshuffle: Zomato and Jio Financial to Replace Britannia and BPCL

Upcoming Changes (March 27, 2025):

Zomato and Jio Financial Services are expected to enter the Nifty 50, replacing Britannia Industries and Bharat Petroleum Corporation Ltd (BPCL).

Market Impact:

• $631 million inflows for Zomato; $320 million for Jio Financial.
• Outflows of $201 million (BPCL) and $240 million (Britannia).

Expert Insights: Analysts believe this marks a shift towards new-age businesses, as Zomato and Jio Financial expand their influence in the fintech and e-commerce ecosystems.

C) Business Developments: Fintech Expansion and Leadership Shifts

1) MobiKwik Gears Up for UPI Growth and RuPay Credit Card Launch

Scaling UPI Transactions: MobiKwik is intensifying its focus on UPI-based payments, particularly its Pocket UPI and credit card on UPI services.

RuPay Credit Card Rollout: The co-branded RuPay credit card, currently in beta, will soon be available to the public, allowing users to access small-ticket credit for UPI transactions.

Financial Performance:

• Revenue grew to ?269 crore in Q3 FY25 (from ?229 crore in Q3 FY24).
• Quarterly loss stood at ?55 crore compared to a ?5 crore profit in Q3 FY24.

New Growth Areas:

• Secured lending products and new commercial models.
• Expansion into savings and insurance distribution.
• Lens.ai, a digital advisory product for investments in mutual funds, fixed deposits, and digital gold.

IPO Proceeds Utilization: The company raised ?572 crore from its IPO and plans to invest in growth-focused business lines.

2) BharatPe’s CMO Parth Joshi Resigns to Launch His Own Startup

Leadership Exit: BharatPe’s Chief Marketing Officer (CMO), Parth Joshi, has stepped down to pursue an entrepreneurial venture.

Growing Trend of Exits: BharatPe has seen multiple leadership departures, including:

• CHRO Smriti Handa, moving abroad.
• Chief Data Scientist Ritesh Mohan Srivastava, launching his own business.

Startup Wave from Ex-Executives: Nearly a dozen new startups and venture funds have been founded by former BharatPe employees, including:

• Jivi.ai by ex-CPO Ankur Jain (AI healthcare).
• Genwise by Rajat Jain, Geetanshu Singla, and Nehul Malhotra.
• CrickPe and ZeroPe by Ashneer Grover.
• OTPless, led by co-founder Bhavik Koladiya.
• Eternal Capital ($14.5 million VC fund) by Dhruv Dhanraj Bahl.

BharatPe’s IPO Plans: The company plans to go public within 18-24 months, having halved its losses to ?474 crore in FY24 while reporting ?1,426 crore in revenue.

D) Regulatory Updates: Strengthening Security & Market Access

1) RBI Proposes Additional Factor Authentication (AFA) for Cross-Border Online Card Transactions

Cybersecurity Initiative: RBI has proposed introducing AFA for international card-not-present (CNP) transactions to enhance security in online payments.

New Security Measures:

• Card issuers to register Bank Identification Numbers (BINs) with card networks for AFA validation.
• AFA will apply to non-recurring CNP transactions when requested by overseas merchants.
• Risk-based mechanisms will be implemented to manage cross-border transactions.

Cyber Fraud Concerns:

• 18,000 cyber fraud incidents worth ?21,367 crore were reported in H1FY25.
• In comparison, H1FY24 saw 14,480 cases, with losses of just ?2,623 crore.

2) RBI Opens Government Securities Trading to Non-Bank Brokers

Expanding Retail Access: RBI has granted SEBI-registered non-bank brokers access to the NDS-OM platform, allowing them to trade government securities (G-Secs).

Why It Matters:

• Increases liquidity and makes G-Secs more accessible to retail investors.
• Expected to boost participation from stockbrokers serving retail clients.

Stock Market Integration:

• Brokers must apply for NDS-OM access and maintain a separate business unit for government securities trading.
• Ensures an arm's-length relationship between the securities market and the government bond market.

3) RBI Approves Amalgamations of Co-operative Banks in Maharashtra and Goa

Two Mergers Cleared:

• Pune Commercial Co-operative Bank Ltd. (Satara, Maharashtra) to merge with Pimpri Chinchwad Sahakari Bank Maryadit (Pune, Maharashtra).
• The Citizen Cooperative Bank Ltd. (Vasco-Da-Gama, Goa) to merge with TJSB Sahakari Bank Ltd.

Effective Date: February 10, 2025.

Impact: The branches of the merging banks will now operate under their respective acquiring banks.

4) RBI Fines Karur Vysya Bank ?8.30 Lakh for Loan Compliance Issues

Regulatory Breach: Karur Vysya Bank failed to maintain the required ‘loan component’ of the working capital limit for certain borrowers.

Penalty Details:

• ?8.30 lakh fine imposed under Section 47A(1)(c) of the Banking Regulation Act, 1949.

Background:

• The Inspection for Supervisory Evaluation (ISE 2023) flagged the non-compliance.
• The penalty does not impact customer agreements but ensures stricter regulatory compliance.

5) RBI Fines Federal Bank ?27.30 Lakh Over Deposit Irregularities

Regulatory Violation: Federal Bank opened savings deposit accounts for ineligible entities, violating RBI’s interest rate on deposits regulations.

Penalty Details:

• ?27.30 lakh fine imposed on February 4, 2025.

Ongoing Regulatory Scrutiny:

• Part of RBI’s push for enhanced financial governance.
• Banks are expected to strictly follow eligibility norms for deposit accounts.

I hope this was useful to you guys working in the Fintech Space.

The fintech space is everchanging, so staying up to date with information will help you make smart decisions for your business.

Again, If I see any notable changes or updates on the Fintech Side during the week, that can help Fintech Companies, I will compile them. And then share them next week!

Btw - I run a legal firm that's a one-stop solution for Fintech Companies in India.

Whether you are starting out in India, or expanding to the Indian market, DM ?? me if you need legal help with:

1) Business Registration

2) Contract Drafting or Review

3) Compliance

4) Answering any legal questions

See you tomorrow!