The Bank of Harbin was granted a license to set up its consumer finance company, Hayin, on September 19th. The bank owns 59% shares of Hayin’s equity with paid-in capital RMB295 million ($44 million). It is another consumer finance license which is issued by the China Banking Regulatory Commission (CBRC) to a company that has a banking background. 

India's Central Bank welcomes its new chief

Written by Felix Yang || September 21 2016

On September 4th, Urjit Patel officially became the new central bank chief in India. He succeeded Raghuram Rajan, who was famous for largely stabilising the economy during his three year term. Under Patel's leadership, the Reserve Bank of India (RBI) is expected to continue the current policy regime.

Offline mobile banking apps grow in popularity in India

Written by James Parker || September 20 2016

The recent introduction of offline mobile banking apps in India underlines the determination by both government and private banks to push financial inclusion in India and is a strong signal that India is ready to embrace fintech and innovation to solve complex problems within its banking network.

China's internet finance, or fintech, sector has had a busy couple of years as the industry has developed to be a critical part of the financial industry as a whole. Yet, the developments have been somewhat imbalanced. While areas like digital payments and asset management grew and matured, others like credit scoring fell behind. On September 9th, China's National Internet Finance Association (NIFA) finally launched their digital Credit Information Sharing platform, which really brings credit scoring into the fintech fold in China. 

In its August 2016 report on the use of Unstructured Supplementary Service Data (USSD) for mobile financial services, the Telecom Regulatory Authority of India (TRAI) conceded that their attempts to replicate the success of USSD mobile financial services in other nations, such as Kenya’s M-Pesa, and provide banking solutions for the underbanked, had failed.

In July, China released the second draft of its Cyber Security Law, just a year after the release of the first draft. On one hand, many of the key terms listed will have to be better defined before it is possible to draw definite conclusions about the implications of the Law. On the other, it is already clear that the Law makes it harder for foreign technology companies to conduct business in China, and this will likely be the case for financial institutions too. Specifically, the second draft does that by expanding and blurring the scope of the regulation, giving authorities broader access to information systems and raising data localization requirements.

Oxygen for Public Sector Banks in India: Enough?

Written by Nikita Gupta || August 02 2016

Last week, the government injected Rs 22,915 Crores or approximately $ 3.14 billion in 13 public sector banks in India. Of this one third of the allocation went to the State Bank of India. The capital infusion is expected to help banking institutions clean up their books, increase lending activity and also raise additional funds. However, not everyone is celebrating the move.

Is Alibaba's Finance Cloud the future of banking in China?

Written by Zennon Kapron || August 02 2016

Over the past few months Alibaba's 'Finance Cloud' has gained significant traction with an estimated 40+ banks subscribing to some, if not all, of the services available on the financial platform. Far from just a cloud platform, Ali Finance Cloud is the closest we have seen to 'Bank in the Cloud.'

New measures for insurance fund in China

Written by Felix Yang || July 28 2016

On July 3rd 2016, China Insurance Regulatory Commission (CIRC) said it changed its rules to make it easier for insurance funds to invest in infrastructure projects. 

Assessing SME (Small and Medium Enterprise) credit has always been a difficult problem for banks and other financial institutions because lack of credit rating and reporting platforms. Last week, Sesame Credit announced the launch of their own credit checking and rating system for SMEs. They named it “Ling’Zhi” - which means “smart sesame” in Chinese. This new system may be the start of solving the SME credit issue and open up new funding channels to SMEs themselves.

The Reserve Bank of India (RBI) has formed an inter-regulatory working group to address the regulatory issues relating to fintech and digital banking in the country. This is a welcome step in the right direction, in line with recommendations by Kapronasia in its recent report titled: ‘Fintech Regulation in Asia’.

Fintech companies in China are raising investor eyebrows this year, with such firms breaking global fund raising records. Even as the amount of venture capital flowing into China has slowed from its peak in 2015, data compiled by KPMG Enterprise and CB Insights show investors are still bullish on the fintech industry.  The money invested into China’s fintech sector reached a record high of $2.4 billion in the first quarter of the year, the consultancy said. This amount was boosted by deals into two of China’s so-called tech unicorns:  Chinese P2P lender Lu.com and JD Finance.

China Internet Finance - what's in a name?

Written by Felix Yang || July 11 2016

Fintech in China started as 'internet finance' or 互联网金融. As the first real China fintech giants tended to come from internet finance platforms, like P2P lenders or financial distribution platforms, the name seemed to make sense, so the term 'fintech' was rarely used. However, today, we're seeing an interesting phenomenon in China as more firms are transforming their businesses to be more 'fintech focused', but what does that actually mean? Is fintech different than internet finance? And more importantly, why now?

Robo-advisors enter China's wealth management industry

Written by Denis Suslov || July 04 2016

Automated advisory platforms, or Robo-advisors, have shaken up the finance industry in many parts of the U.S. and Europe. China's wealth management industry is now the next in line to receive such a boost.

India’s NPA problem- Cleaning the Credit Rating Agencies

Written by Shreya Mukherjee || July 01 2016

Securities market regulator the Securities and Exchange Board of India (SEBI) has taken credit rating agencies to task after a spate of fiascos wherein a rating agency downgraded a certain paper from BBB+ to BB+ and finally D all within a span of month. In another case the credit rating agency suspended ratings on a certain stock citing non-availability of sufficient information. Interestingly, in both the cases the companies have been called out for debt servicing issues in the wake of the NPA process at major Indian banks.

Postal services in India: The birth of a new mega bank

Written by Mrityunjay Pandey || June 28 2016

The Department of Post (DoP) is all set to launch its payments bank by September this year after receiving the in-principle approval from the RBI to launch the same in August last year. With over 154,000 post offices of which 130,000 are operating in rural pockets of the country the new bank is expected to be a sure winner on account of the distribution strength. No wonder that some of the world's top 50 banks including Barclays of England, Deutsche Bank of Germany, Citi Bank of USA and the World Bank wanted to link themselves with the postal department for a piece of the action.

RBI to strengthen cyber security in Indian banks

Written by Arijit Dutta || June 23 2016

The Reserve Bank of India (RBI) has proposed that commercial banks need to institute a Board-approved Cyber Security Policy no later than September 30, in a bid to address the growing number of cyber threats and reported incidents of cyber crime in the banking industry. The RBI set the rules in a letter to bank chief executives this month, with Regional Rural Banks exempt from the change. The use of technology in banks, already an "integral part" of operational strategy, has gained further momentum, hence the need for such guidelines, the RBI said.

The CIRC acts on internet insurance industry

Written by Felix Yang || June 22 2016

Last week, the China Insurance Regulatory Commission (CIRC) issued a new scheme for evaluating risk in online insurance. Aimed at providing consistent development of the industry and ensuring proper risk management, the scheme is focused on the business model and operations of internet insurance companies. Companies offering life insurance, financial insurance, and other insurance areas are all covered by the new supervisory scheme. The review will take place in three steps, carried out over the course of five months.

Xiaomi enters the banking industry

Written by Kaiyu Xu || June 21 2016

Xiaomi has entered the finance industry, following in the steps of Chinese tech titans Alibaba and Tencent. On June 13th, Xiaomi, whose traditional strength is in the smartphone business, joined hands with Chinese conglomerates New Hope Group and Chengdu Hongqi Chain Co. to establish the New Hope Bank in the Western Chinese province of Sichuan.

India’s insurance sector is worth $60 billion and has established some solid regulatory models that helped spawn an entire web and mobile driven industry. The main insurance regulator, the Insurance Regulatory and Development Authority (IRDA), played a proactive role by setting boundaries early on in the sector, such as clearly distinguishing between insurance brokers and web aggregators.

Islamic Banking comes to India

Written by Arijit Dutta || June 10 2016

The Islamic banking system, where neither the borrowers nor depositors are paid or pay any interest, is set to launch in India. It will completely function under the tenets of sharia law, where the bank doesn’t charge interest but the customers share a part of profit or loss of the bank. The idea is to encourage the economic and social development of the region the bank is based in.

As the 'India stack' becomes mainstream, what will banking look like in the future?

Even with over 40 Acts directly or indirectly pertaining to pertaining to insolvency and bankruptcy, banks in India are still under tremendous pressure due to rising non-performing assets (NPAs). Multiple agencies are involved in handling these situations, with overlapping jurisdictions that creates complexities and delays.

For nearly 30 years, India’s double taxation avoidance agreement (DTAA) with Mauritius came in handy for investors to route money through ‘shell’ companies based out of the island nation. These investors saved on capital gains tax liabilities in Mauritius which does not impose these taxes on off-shore entities. A similar treaty exists with Singapore. As a consequence, India receives half of its FDI from just two countries: Mauritius (34%) and Singapore (16%).

Blockchain is a distributed, immutable ledger that records transactions using digital tokens. Its distributed architecture is much like P2P services such as Skype and bittorrent and it uses public key cryptography to ensure complete security for users. The immutability of entries on the blockchain is a key design feature that makes it particularly attractive to industries that lean heavily on trustworthy records, such as banks. But is India ready?

The RBI’s proposal for P2P lending: a flawed approach?

Written by Ketan Warikoo || May 11 2016

India’s banking regulator, the Reserve Bank of India (RBI), recently released a consultation paper on P2P lending in India. This paper aims at regulating India’s fledgling P2P ecosystem, demonstrating that the RBI is positively besieged with the concerns and realities of this nascent industry.

Although China’s newly issued April export/import data may be worrying on its face, when examined from a different angle, it may tell a more positive story.

Storms hidden in huge expiring China corporate debt

Written by Felix Yang || May 06 2016

In China this year, over 3,700 billion RMB (about 570 billion USD) worth of domestic debt will expire, a record-breaking amount. Many companies will face difficulty in rolling the debt over because of the limited size of the whole bond market. Even if just a small percentage of the whole market defaults, the amount defaulting would still be so large, it could start a crushing storm for an already vulnerable Chinese economy. Many defaulting state-owned companies are from sectors in difficulty as China slows, such as mining and heavy industry. This makes the possibility of default more likely to happen. And in the environment of a slowing debt market, things will probably get worse.

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.

India’s first small finance bank

Written by Ketan Warikoo || April 26 2016

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.

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