Displaying items by tag: india

For several years the Indian Government has been pushing larger Public Sector Banks (PSBs) to consolidate the market by acquiring smaller and weaker banks. After failing several times in the past, it seems at least the merger of India's largest bank with its five associate banks will be finalised during this fiscal year.

As a growing number of foreign banks wind up operations in India, IT companies’ revenues from BFSI are growing slower than ever (21% in 2015 vs a projected 10% for 2016). Most IT majors derive a significant portion of their revenues from banking and insurance sectors - as high as 40% in some companies. However, this situation could improve with 'Payments Banks' (PB) set to roll out in the third quarter of 2016. 

The pie of banking services in India is well spread out amongst various types of banks, ranging from private sector, public sector, foreign banks, rural banks and even cooperatives. However, market forces are starting to whittle down the once varied field of payment service providers (PSPs), and it is starting to look more like a two horse race similar to other e-commerce markets in Asia. 

Capital Small Finance Bank (SFB) was launched this Sunday (April 24, 2016) with much fanfare. This is the first of the ten small finance banks to become operational. The SFBs had received in principle approval from RBI last fiscal to start operations.

And these are not Fintech startups alone. The banking sector is trying to woo this very important and growing ecosystem in the country. Some banks have resorted to novel ways of doing so. RBL (Ratnakar Bank Limited) has announced opening of a branch in Bengaluru dedicated exclusively to cater to the growing startup ecosystem in that city.  This comes close on the heels of SBI recently announcing the establishment of its branch called InCube in Bengaluru recently. RBL bank plans to launch several such branches across the country in the future.

It is well understood that India continues to have acute challenges around financial inclusion. Only 40 per cent of the adults in the country have formal bank accounts, despite the country having 150 domestic commercial banks and over 2,700 co-operative sector banks operating in the country.

The financial services sector in India is at it again; at least the regulators and the mainstream business publications are. Talking up UPI (Unified Payments Interface) as a panacea for India’s challenges with financial inclusion, cash economy (read black money), plateauing digital ecosystem and you name it. 

After a lull in investments and a lacklustre IPO, the Indian ecommerce market is heating up once again. While China-based Alibaba had earlier invested in Snapdeal (ranked #2 in India by market share) and Paytm, it recently announced a direct foray into the Indian market, making the entire ecommerce sector sit up and take notice. Now Japan’s Rakuten seems set to follow suit into India.

Ecommerce major Flipkart’s acquisition of UPI based startup PhonePe Internet Pvt Ltd shows that the payment space is heating up at a rapid pace. Incidentally PhonePe, the Bengaluru based startup was launched by three former Flipkart executives just four months back, and is focusing on peer to peer payments, bill payment and merchant payments- areas of interest for ecommerce companies.

Recently DCB Bank became the first bank in India to introduce Aadhar based authentication at its ATMs, starting with its branch in India’s commercial hub- Mumbai. Aadhar provides a 12 digit number to every Indian resident that serves as a proof of identity as well as proof of residence, with biometric scanners being used for authentication.