Happy Monday, everyone!
MTLegal Team is bringing you a weekly update on everything that happened in the fintech space over the past week.
Our goal with these updates is to inform you about any new developments, trends, regulations, or notable events in the fintech sector.
This will help fintech companies plan, protect, and preserve their businesses based on market changes and regulatory updates.
Here’s last week’s update:
A) Emerging Trends
1) Fintech Startup Skydo Secures $5 Million in Pre-Series A Funding
What Happened: Skydo, an Indian fintech startup, raised $5 million in funding, bringing its total funding to $10.2 million.
Why It Matters: The funds will help Skydo expand its operations and improve its risk and compliance systems, which are crucial in the regulated fintech industry.
Skydo’s Role: The startup helps small and medium-sized businesses in India with international payments, processing over $100 million since it started in 2022.
Future Plans: Skydo is applying for a license from the Reserve Bank of India to enhance its regulatory compliance, aiming to make international payments simpler and more cost-effective.
2) Rural Fintech Startup Jai Kisan Gets RBI Approval for NBFC Acquisition
What Happened: Jai Kisan, a rural fintech startup, received approval from the Reserve Bank of India (RBI) to acquire a majority stake in an NBFC.
Why It Matters: This acquisition allows Jai Kisan to offer more customized financial products directly to farmers and rural businesses, making credit more accessible and affordable.
Impact: Jai Kisan has already facilitated over ₹6,000 crores in loans since 2017, and this move will strengthen its partnerships and financial inclusion efforts.
3) Wise Payments to Resume Signing of New Customers in India
What Happened: Wise Payments, a London-based fintech, plans to start onboarding new customers in India again after a pause.
Why It Matters: India’s overseas remittance market is worth $32 billion, and Wise aims to capture more of this market by offering better alternatives to traditional banks for sending money abroad.
Next Steps: Wise is upgrading its infrastructure to comply with Indian regulations and plans to restart customer sign-ups soon.
B) Economic Highlights
1) Transaction Limit for Tax Payments via UPI Increased
What Happened: The RBI raised the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction.
Why It Matters: This change makes it easier and more convenient for taxpayers to make high-value tax payments digitally, enhancing the tax collection system’s efficiency.
2) Pune’s PMPML Sees Uptick in Online Payments, but Cash Dominates
What Happened: Pune’s public transport system, PMPML, saw a rise in online payments for bus tickets, but cash is still the preferred method.
Current Situation: Online payments have increased from 0.8% to 4%, though the overall revenue from digital payments remains low at 2.09%.
Challenges: Issues like network problems and passenger distrust are limiting the use of digital payments.
C) Business Developments
1) Fairexpay Launches Digital Platform for Low-Cost Remittances
What Happened: Fairexpay launched a fully digital platform for international remittances, offering significant savings on forex costs.
Why It Matters: The platform provides cheaper and faster remittance services, especially benefiting students and travelers, making it a strong alternative to traditional banks.
2) CNBC Names Nium Among World’s Top Fintech Companies 2024
What Happened: Nium, a global leader in cross-border payments, was named one of the World’s Top Fintech Companies by CNBC.
Why It Matters: This recognition highlights Nium’s success in making international payments faster, cheaper, and more reliable. The company has expanded rapidly, gaining new customers and regulatory licenses globally.
3) RBI Imposes Penalties on Bank of Maharashtra, Poonawalla Fincorp, and Hinduja Leyland Finance
What Happened: The RBI fined Bank of Maharashtra ₹1.27 crores and also penalized Poonawalla Fincorp and Hinduja Leyland Finance for regulatory violations.
Why It Matters: These penalties reflect the RBI’s strict enforcement of compliance in the banking and financial sectors.
D) Regulatory Insights
1) RBI Issues Revised Regulations for NBFCs and HFCs
What Happened: The RBI released new regulations for non-banking finance companies (NBFCs) and housing finance companies (HFCs).
Key Changes: The rules, effective January 1, 2025, include stricter guidelines on accepting public deposits and maintaining liquid assets.
Why It Matters: The revisions aim to harmonize the regulations for NBFCs and HFCs, ensuring better financial stability.
2) Banking Laws Bill Extends Tenure of Cooperative Banks’ Directors to 10 Years
What Happened: A new bill proposes extending the tenure of cooperative bank directors from 8 to 10 years.
Why It Matters: This change aims to improve governance and audit quality in cooperative banks, aligning with the Companies Act and protecting investor interests.ensures that models used for credit management are reliable and effective.
3) RBI Tightens Rules on NBFC P2P Lending Platforms
What Happened: The RBI issued new guidelines to regulate peer-to-peer (P2P) lending platforms operated by NBFCs.
Key Rules: These platforms are now prohibited from providing credit guarantees, assuming credit risk, or promoting P2P lending as an investment product.
Why It Matters: The stricter rules aim to protect lenders and ensure transparency in the P2P lending space.
We hope you found this update insightful.
MTLegal Team is here to support everyone in the fintech sector—whether it’s for licensing, registration, or contractual needs.
We’ve got your back.
Contact us today, and let’s protect the business you’re building!
