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Fintechs seek clarity on digital currency tieups despite RBI blessing

Economic Times

Economic Times · 1y ago

Fintechs seek clarity on digital currency tieups despite RBI blessing

The Reserve Bank of India is conducting retail digital currency pilots for non-bank payment system operators (PSOs) with two major use cases being tested, including subsidy payments for farm inputs and corporate expense management. The blockchain-based digital currency allows for programmability of money, enabling usage restrictions to specific merchants. Banks and regulated fintechs are collaborating to develop use cases for central bank digital currency (CBDC), with ongoing weekly meetings with the RBI. Clarity is still needed on operational guidelines and product constructs for PSOs to engage with banks on CBDC integration. Startups are concerned about financial rules and alternative business models for CBDC investments.

Related News

Fintechs Seek Clarity On Tie Ups With Banks For CBDC Pilot

Inc42 · 1y ago

Fintechs Seek Clarity On Tie Ups With Banks For CBDC Pilot

Fintech startups in India are seeking clarity from the Reserve Bank of India (RBI) regarding the rules of engagement with banks to deploy central bank digital currency (CBDC) use cases. Homegrown fintechs are unclear about how to engage with banks for participation in CBDC pilot programs. Operational guidelines and product constructs need to be worked out between the two parties until more clarity is provided by the RBI. Several large banks and regulated fintech companies have started discussions on building CBDC use cases.

RBI Meets Banks And Fintechs To Push For CBDC Adoption

Inc42 · 1y ago

RBI Meets Banks And Fintechs To Push For CBDC Adoption

Representatives of the Reserve Bank of India (RBI) recently met with bankers and fintech officials to discuss increasing adoption of central bank digital currency (CBDC). The meeting aimed to gather input on how to popularize CBDC and address the lack of public interest. The RBI has been keen on promoting the blockchain-enabled digital currency since its launch in December 2022 and has proposed allowing non-bank payment system operators to offer CBDC wallets. The bank is working to fast-track the rollout of the digital currency and introduce additional functionalities such as offline capability and programmability for CBDC retail payments.

Surge In Unsecured Loans By Fintechs Led To RBI’s Tightening Of Lending Norms: Bernstein

Inc42 · 1y ago

Surge In Unsecured Loans By Fintechs Led To RBI’s Tightening Of Lending Norms: Bernstein

According to a report by brokerage Bernstein, there has been a significant increase in unsecured lending by Indian banks and fintechs, leading to tighter lending norms by the Reserve Bank of India (RBI) in November last year. The report highlights the rapid growth of fintechs in the country, which has further driven the increase in unsecured lending. The RBI increased the risk weight for consumer credit exposure of banks and non-banking financial companies, aiming to increase the cost of unsecured loans. The growth in consumer loans has outpaced household credits, raising concerns among regulators. Despite regulatory measures, digital lending remains attractive for India's fintech sector.

Cryptocurrencies pose risks to EMs, India's stand remains unchanged - cenbank chief

Reuters · 1y ago

Cryptocurrencies pose risks to EMs, India's stand remains unchanged - cenbank chief

The Reserve Bank of India (RBI) Governor, Shaktikanta Das, has warned that cryptocurrencies can pose significant risks to emerging markets. Despite wider acceptance in other countries, the central bank's position on cryptocurrencies remains unchanged. Das highlighted the benefits of central bank digital currency, or e-rupee in India's case, and mentioned that the RBI is working on programmability to enable cash transfers. The central bank also plans to conduct pilots for using the e-rupee in new segments in the wholesale space. Furthermore, the RBI is exploring model-based artificial intelligence lending by financial entities.

PayPal's Mintoak buys India's 1st e-rupee deal for $3.5 mn

Inshorts · 5m ago

PayPal's Mintoak buys India's 1st e-rupee deal for $3.5 mn

PayPal and HDFC Bank backed startup Mintoak which provides merchant payment services to lenders reportedly bought Digiledge for $3.5 million on Tuesday. This marks the first acquisition in digital currency sector. Digiledge specialises in CBDC and bill payments services. In December 2022, the RBI launched a trial program for CBDC also known as e-rupee, a digital currency substitute.

India's Paytm shares jump after reports CEO met RBI, finance minister

Reuters · 1y ago

India's Paytm shares jump after reports CEO met RBI, finance minister

Shares of Paytm, an Indian digital payments firm, surged by up to 10% after the company's CEO reportedly met with India's finance minister and central bank to address regulatory concerns and compliance issues related to its payments bank business. The company has sought an extension from the Reserve Bank of India (RBI) regarding the February 29 deadline and clarity on transferring its license for the wallets business and digital toll payment service. Despite the stock's rise, it still trades below analysts' median price target.

RBI likely to start digital rupee pilot in call money market by October

Economic Times

Economic Times · 1y ago

RBI likely to start digital rupee pilot in call money market by October

The Reserve Bank of India (RBI) is set to launch a pilot for its Central Bank Digital Currency (CBDC) in the call money market by October, according to RBI Executive Director Ajay Kumar Choudhary. The wholesale CBDC, known as Digital Rupee-Wholesale (e-W), had its pilot initiated in November 2022, primarily for settling secondary market transactions in government securities. Nine banks were chosen for the pilot project for wholesale CBDC, and the RBI had already launched a pilot for the retail version of CBDC (e-R) on December 1, 2022.

RBI's Global Hackathon To Build Tools To Curb Financial Frauds

Inc42 · 1y ago

RBI's Global Hackathon To Build Tools To Curb Financial Frauds

The Reserve Bank of India (RBI) has issued a call for applications to create prototypes that can anticipate, identify, and prevent real-time financial fraud using non-traditional data sources. The RBI is also looking for solutions to ensure transaction anonymity in Central Bank Digital Currency (CBDC) transactions while maintaining the integrity of the financial system. This initiative coincides with the launch of a digital payments intelligence platform by the RBI to combat online financial fraud.

P2P companies go easy on partnership business as RBI sounds alert

Economic Times

Economic Times · 1y ago

P2P companies go easy on partnership business as RBI sounds alert

Peer-to-peer lending startups in India are slowing down on partnerships with consumer-facing platforms due to regulatory scrutiny from the Reserve Bank of India. Several lending platforms are adopting a "wait-and-watch" policy before forming deep integrations, as they seek regulatory clarity. The RBI has been conducting meetings with industry participants to understand their business models and adherence to existing guidelines. The industry is now expecting regulatory clarification and updates in the coming months. The RBI recently criticized certain business practices of NBFC-P2Ps and emphasized the need for compliance with regulatory guidelines.

Cryptos pose huge risks for emerging eonomies: RBI Governor

Inc42 · 1y ago

Cryptos pose huge risks for emerging eonomies: RBI Governor

Reserve Bank of India (RBI) Governor, Shaktikanta Das, has reiterated the central bank's stance on cryptocurrencies, stating that digital currencies pose significant risks for emerging economies. Das opposes the widespread acceptance of cryptocurrencies and has previously called for a ban on virtual digital assets. However, he mentioned that the RBI plans to conduct pilots for the wholesale central bank digital currency (CBDC), e-rupee. Additionally, Das praised the Unified Payments Interface (UPI) as one of the best payment systems globally, dismissing accusations of monopoly and expressing ambition for UPI to become a world leader in the payments ecosystem.

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