FINANCIAL SECTOR

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• Govt evaluating RBI proposal for higher infrastructure provisioning; bankers, NBFCs voice concern

  Lenders may oppose the draft rules, which proposes provisioning of up to 5% from current 0.4%, due to concerns over rising interest rates and potential disruption to capital expenditure. Banks plan to lobby against the steep increase, arguing it could affect project viability and economic momentum. State-owned NBFCs and infrastructure firms are also raising concerns, emphasizing the need to balance risk and support for infrastructure financing.

  

• Exclusive: Former RBI CGM on regulations and shadow bank status for NBFC

  Watch this quick conversation with Dr. Sathyan David, Former CGM, RBI where he talks about the evolving regulatory environment for NBFCs in India and weather these non-banks are still struggling with the ‘Shadow Bank’ tagline.

  

• What is PM Modi's likely next govt's 100-day plan for the finance sector?

  From NFIR to boosting microinsurance and IBC, the government has planned for the first 100 days in hopes of returning to power.

  

• Tech advancements and competition driving down cost of FinServ: SBI MD

  Innovation should be able to achieve scale to make an impact, said State Bank of India's CS Shetty while delivering the keynote address at ET ETBFSI CIO Digital Conclave 2024.

  

• RBI-Sebi tango stops dance of dodginess: Regulators now inclined to share data; come together to take on wrongdoers

  Financial sector regulators in India are increasingly coming together to address wrongdoings and practices by market participants. This change is attributed to former Sebi chairman Ajay Tyagi, who established an institutional mechanism in 2019 to facilitate sharing of information and data between Sebi and RBI. This system allows for more serious information sharing and debating, with executive directors from both organizations nominated as contact persons.

  

• From kid gloves to sucker punch: What recent RBI crackdowns on JM Financial, IIFL and Paytm Payments Bank show

  The Reserve Bank of India (RBI) has been increasingly imposing penalties on banks and non-banking finance companies for violating its rules. The move from a consultative approach to monetary policy and forming regulations has led to a paradigm shift in its approach to addressing regulatory breaches. The RBI has ordered Paytm Payments Bank to shut down its business for not complying with rules regarding know your customer (KYC) and prevention of money laundering, eroding its market value by nearly half in a matter of days.

  

• From kid gloves to sucker punch: What recent RBI crackdowns on JM Financial, IIFL and Paytm Payments Bank show

  The Reserve Bank of India (RBI) has been increasingly imposing penalties on banks and non-banking finance companies for violating its rules. The move from a consultative approach to monetary policy and forming regulations has led to a paradigm shift in its approach to addressing regulatory breaches. The RBI has ordered Paytm Payments Bank to shut down its business for not complying with rules regarding know your customer (KYC) and prevention of money laundering, eroding its market value by nearly half in a matter of days.

  

• Regulators need not be too conservative, should respond fast to 'accidents' in financial sector: Uday Kotak

  Uday Kotak, Founder Director of Kotak Mahindra Bank, advocates for regulators to respond swiftly to financial sector "accidents" rather than being overly conservative. Speaking at an AIMA event, he emphasizes the need for good regulations to facilitate growth, acknowledging that some accidents may occur but highlighting the importance of prompt correction.

  

• Paytm Bank crisis: “RBI knows more than You and I,” says Uday Kotak

  Uday Kotak emphasized the need for regulators to respond swiftly to accidents in the financial sector. A better regulatory environment is needed. RBI took regulatory actions against Paytm Payments Bank Ltd for non-compliance with KYC guidelines. Kotak praised RBI's performance and suggested a growth rate for the economy.

  

• India set to standardise 'know your customer' banking checks

  India's financial stability panel aims to standardize customer verification processes across the financial sector to curb illegal lending through online applications. The plan, discussed at a meeting of the Financial Stability and Development Council, seeks to ensure uniformity in Know Your Customer (KYC) norms. This move follows regulatory action against Paytm Payments Bank for non-compliance. The panel also addressed measures to prevent the negative impacts of illegal online lending apps, which have surged during the COVID-19 pandemic.

  

• Interim Budget 2024: Plans afoot to privatise a state-run bank and a general insurance firm

  The government is also expected to give final shape to the Insurance Amendment Bill, which is slated to be introduced in the next financial year, paving the way for strategic reforms in the sector, the people said, adding that some of the key announcements made during the second term of the Modi government, including the privatisation of two state-run banks and one general insurance firm, are expected to get going in 2024-25.