Dhanasekaran S

🌐 Understanding ‘Netting Off’ in Lending: A Double-Edged Sword? In the microfinance industry, there’s a common practice that often goes unnoticed yet has significant implications—netting off. Here’s how it works: Instead of waiting for a borrower to fully repay an existing loan, lenders may issue a new loan to cover outstanding dues. This “nets off” the previous loan, creating an impression of a clean repayment. It keeps accounts in good standing and avoids classifying loans in high-risk categories, like SMA-2 (overdue by 61–90 days). 📊 ✅ Pro: Borrowers receive quick refinancing without immediate pressure to clear past dues. ⚠️ Con: This practice can mask the true financial strain on borrowers and delay acknowledgment of potential defaults. The RBI has flagged concerns, emphasizing that constant rollovers may distort the actual state of borrower health, especially as defaults might remain hidden under this practice. Is it time for more transparency in loan classifications? How can we better balance lending flexibility with financial clarity? #Microfinance #Lending #NettingOff #FinancialTransparency #RiskManagement #BankingInnovation #RBI

13

Hi All Need to raise a point here with the RBI for clarification .Recently it's seen that many customers have raised chargeback complaints via the online portal RBI BO for transactions which are more than 360 days in case of MICRO ATM(AEPS) withdrawal they have done. Now the BO rule says they can raise till one year but the condition is after getting the revert from RE or if they did not get revert within 30 days from the date of complaint . They can't raise it on BO directly without raising it with RE first . But these complaints are raised by the BO to the Acquirer banks and the Acquirer banks forwards it saying they need customer declaration to reject the same or else it will be debited to the Corporate BC. How fair is this the compliance team just does a postman job to forward and put pressure as they are anyway at the upper hand to debit the amount , do they even understand how much days it will take to earn that amount the poor BC succumbs to the pressure and pays from his pocket denting his revenue which is already the lowest . There are clear guidelines from NPCI saying first 90 days for raising chargeback and then 60 days post 90 for good faith . So what this guideline means if this is what the BO RBI team escalates . This is a common issue to all the FI BC's can we have a clear guideline or the present one is misinterpreted due clarity issues and the pressure is on . Would like the authorities of NPCI /RBI followed with other fintech leaders to explain and guide on such practices .Specially from the Acquirer banks who just don't want to understand the guidelines . These impact the revenue and there is a leakage in the system which over time can erode revenues with the very low margins the Corporate BC's earn in this business. National Payments Corporation Of India (NPCI) Reserve Bank of India (RBI)

8

When one of India’s top banks needed to protect sensitive customer data while working with a third-party agency, they turned to Seclore for the perfect solution. With Seclore's SDKs and APIs, DFC First Bank integrated automated file security directly into their document management system—no major code rewrite, no disruption to their customer onboarding process. Now, PII is automatically secured from the moment it’s uploaded, ensuring only authorized users can access it—internally and externally. This has not only improved security but helped the bank achieve compliance with ease, all while saving costs on development. The result? A seamless, secure customer experience that builds trust while keeping data safe, even beyond the organization’s walls. Learn more: https://lnkd.in/gSsezRhr #CustomerSuccess #DataSecurity #FinancialServices #Compliance #PII #DocumentManagement #Banking #BankingSecurity

9

The RBI Annual Report 2022-23 highlights significant advancements in India's digital payment systems and IT resilience. Key points include a surge in UPI transactions, growth in NEFT and RTGS volumes, increased credit card usage, and the rise of prepaid payment instruments. The report also notes the expansion of PoS terminals and UPI QR codes, the introduction of the Lightweight Payment and Settlement System for operational continuity during emergencies, and ongoing CBDC pilot projects. These efforts underscore the RBI's commitment to modernizing financial systems and ensuring robust infrastructure against potential disruptions.

4

What is India's superpower in embedded lending? And why is the US still the best market for it? I spoke with Ankit Singh, the cofounder of Vaya Technologies, for the latest edition of the Embedded Finance Review podcast. Ankit was instrumental in setting up #OCEN in India as part of the volunteering organisation ProductNation/iSPIRT. OCEN is part of #IndiaStack. It is a framework that enables marketplaces, platforms, and digital brands to offer lending products. With one integration, these players can embed lending products from various banks and alternative lenders. After that, Ankit decided to use his knowledge to build an embedded lending infrastructure provider. But he decided to leave India and founded Vaya in the US. Why? And what kind of companies does he believe are best positioned to launch an embedded finance product? You can find the episode on your preferred podcast app. The links for Spotify and Apple Podcasts are in the comments. Whom should interview next?

36

6 Comments

UPI Apps Market share is a testimony of what happens when a technology disrupts As my team put together this- we were discussing on how this will continue to bring value to World and make 🇮🇳 Indians more proud

36

Govt business is the best business , govt is 40-50% partner in each enterprise even if you make loss as start up and Private business ! NCPI, CSC, are most profitable organisations , while they are tasked to do financial inclusion, imagine VC funded and listed companies payment companesies are not allowed to make money out of UPI and UPI brings profits to govt ! Debatable .. which is public and which is private for profit business ?

1

The banks, especially cooperative banks, are growing and are required to operate in a world of bits and bytes. The regulators have to ensure protection of depositors/stakeholders and ensure there banking ecosystem is robust. This places an increasing burden on the banks; to cater to the growing business, and be fully compliant while the margins shrink. To continue to grow and be profitable; and not lose through fines and penalties for non-compliance, it is imperative for #banks especially #cooperativebanks to leverage #technologies (#platform), which are simple, effective and affordable. https://lnkd.in/dkehHDYR #economictimes #rbi #cooperativebanks #banktech #regtech #apis #apimanagement

9

After raising risk weightage of unsecured loans, asking fintechs to temper down growth, RBI has now cautioned 4 banks on the poor quality of assets being sourced through co-lending channels. The slow down of personal loans will continue throughout this year. #digitallending #fintech #regulation https://lnkd.in/gci_7vxA

33

1 Comment

UPI: NCPI: failure: digital payment disruptions to banks' outdated technology says Reserve Bank of India (RBI) like nepalese nepali banks using outdated technology so digital payments fail 99% time: fintech india: https://lnkd.in/d8R6mSM8

3

Reserve Bank of India (RBI) report on currency and finance report lists the opportunities but flags the cybersecurity and fail of technology. Digitisation poses cybersecurity risks, challenges for regulators. #rbi #digitalpayments #digitaltransformation

17

Explore a comprehensive & insightful panel discussion on how payments are unlocking digital acquisition and business expansion, with Amit Tyagi the Head of Fintech in NPCI Bharat BillPay (NBBL). Be there at the Payments Reloaded 2024 to experience a networking event like no other. Noopur Chaturvedi #IndustryLeaders #Innovation #DigitalTransformation

220

3 Comments

Indian payments ecosystem is possibly a role model for global economies for reapplication! With daily volume of 450 million transactions, UPI is the best scalable platform, tested for the world in India. Few countries have already started using UPI! Do you know what is UPI in India ? How people are transacting now a days in India ? #payments #upi #instantmoneytransfer

16

2 Comments

Unified Payments Interface (UPI) is a real-time payment system developed by the National Payments Corporation of India to facilitate instant money transfers. It is the most advanced payment systems in the world, allowing users to transfer funds across bank accounts through their mobile phones, 24/7, without bank details or IFSC codes. Let’s break it down: ### 1. **What is UPI?** Imagine UPI as a digital postman that delivers money across banks instantaneously. Normally, if you wanted to send money to someone, you’d need their bank account number, IFSC code, and other details—much like mailing a physical letter where you need the full address. But with UPI, you don’t need all of that. Instead, it works like sending a text message, where all you need is the person's virtual address (called a Virtual Payment Address or VPA), such as `username@bank`. ### 2. **How UPI Works (Technical Overview)** At its core, UPI is built on the IMPS system, which allows for real-time interbank transfers. Here’s the flow of a UPI transaction: - **User Initiates Transfer**: Using a UPI app (like Google Pay, PhonePe, or Paytm), the user enters the amount and the recipient’s VPA (like `john@bank`). - **Validation & Authentication**: The app asks the user to enter their UPI PIN (Personal Identification Number), which acts like a digital signature to authorize the transaction. - **Real-time Transfer**: Once authenticated, UPI connects to the NPCI switch, which checks the sender’s bank balance, verifies the recipient’s bank details, and completes the transaction instantly. - **Acknowledgment**: Both the sender and recipient get an immediate notification that the money has been transferred. What’s remarkable about UPI is its speed and efficiency. The entire process happens in a matter of seconds. There’s no waiting for bank working hours or weekends. UPI is always available. 3. **Virtual Payment Address (VPA)** A VPA is essentially an alias for your bank account, like a nickname. Instead of giving out your detailed account number and IFSC code, you just share something like `yourname@bank`. It’s secure and convenient. When someone uses your VPA to send money, UPI knows where to direct the funds. ### 4. **UPI ID vs. UPI PIN** - **UPI ID (VPA)**: This is the identifier that tells the system who the recipient is. - **UPI PIN**: This is a 4-6 digit code set by the user and is used to authorize transactions. Think of it like the password you use for your bank account, but it’s specific to UPI transactions. ### 5. **Benefits of UPI** - **Instant Transfers**: Transactions happen in real-time, in seconds. - **Low Cost**: Typically free or at minimal charges. - **Accessible 24/7**: No need to worry about banking hours or holidays. - **Secure**: It uses two-factor authentication (your mobile device and UPI PIN). - **Interoperability**: Works across multiple banks and platforms. You can send money from one bank to another or even to someone using a different UPI app.

35

3 Comments

In house solution or outsource? what would be your choice for developing a digital solution? Surprisingly enough, post covid, there is a trend of many #nbfc companies trying to build in house capability in the Digital ecosystem and Loan Origination solutions. Some have hired a full fledge IT team right from CTO to developers to architects and have either inhouse or out sourced the testing capabilities. During my discussion with some of these teams, the following are the reasons: 💡 Compete with FinTechs: Since the evolution of FinTech, the space has been innovating at lightening speed. This banking space has been disrupted again & again. Right from Digital evolution to API banking to LSP to colending etc. Thus FinTechs have been touch bearers of innovation & they had tech integrated as part of their business rather than outsourcing it. 💡 Agile Developments or ODC: Most of the IT vendors would be charging on the basis of manday for the change requests raise. Now this needs Approvals, negotiations, Scope finalization, development to production movement cycle etc. Its a very time taking process. Thus this becomes a waterfall method but in reality most of the NBFCs would need to be agile to keep innovating. This comes again at a cost of offsite Development center where vendors provide their employees to a client for getting their development done. 💡 Innovations & Product features: Generally, The vendor tries to cover 80-90% of the market requirement. Thereby innovations are very subjective and the risk is too high in the market like banking. However, once the vendor develops something cool, its generally since that then it is provided as out of feature after some point thereby allowing other competitors to benefit. 💡 Cost effectiveness: During covid when there was a big race for everyone to get Digital and be able to run the business, many customer who had not taken highest level of AMC contracts suffered alot. The CRs were taken much later and the time taken for delivery was exceptionally high. The customers who had deep pockets had to pay extra premium to get their Change request delivered or resources allocated. This, then triggered the question of high dependency on the vendors for things which need iteration and development again & again. Thus, the answer to all these questions was, like FinTech, lets onboard a team of developers & IT teams so as to be able to have control on Digital & LOS modules at least. The LMS is mostly a stable out of product which hardly requires Changes and hence an shelf product approach will help. Thus, keeping this shift in mind, we at Advaya Platform have developed a LCNC platform which reduces vendor dependency and also allows the nbfc or bank to be Agile for their product development & customizations with quicker GTM. #informationtechnology #mobileappilcations #mobileapps #enterprisesoftware #software #development #fintech #india #startup #startupindia #finance #bankingindustry #banks #lcnc #AI #ML

21

Anyone wants to talk about cutting edge tech? Especially "Facial Authentication". In a world where the cat & mouse game between Regulators & Fraudsters has reached new peaks, our regulator (Reserve Bank of India (RBI) has opened its thoughts & approach towards identify verification. This move marks the progressive nature of our regulator towards payments & transactions, thus giving viable options to the users. The Additional Factor Authentication (AFA) is the way forward with Facial Authentication being the most cutting edge. Connect with Trusting Social to know more!! #trustingsocial #facialauthentication #AI #disruption #AFA Ashwin K Siddhartha (Sid) Kohli Raja Narravulla Alok Chaubey Sayamil Rasheed

21

🇮🇳 India's Payment Ecosystem ... The foundation of an efficient digital payment system was laid down in the 1990s when the modernisation of the payment and settlement systems was accorded high priority in the agenda of financial sector reforms to improve the efficiency of financial intermediation and financial system stability. The reform in payment and settlement systems were facilitated by advancements in computerisation and technology. 📌 The payment systems evolution in India can be roughly categorised in two distinct waves: a) Digitalisation of existing systems to improve efficiency, and  b) Changes in payment space brought about by the digital revolution  🚀 The classification between retail and non-retail segments is at Payment System/Instrument level and does not per se capture individual transaction values. For instance, NEFT is called as retail payment system, even though it allows for high value transactions. Contrastingly, for RTGS there is a lower limit of value defined, and is classified as wholesale/large value payment system. CTS: Cheque Truncation System  APBS: Aadhaar Payment Bridge System AePS: Aadhaar enabled Payment System;  IMPS: Immediate Payment Services;  NACH(Cr): National Automated Clearing House (Credit);  NEFT: National Electronic Funds Transfer; UPI: Unified Payments Interface;  BHIM: Bharat Interface for Money;  NACH(Dr): National Automated Clearing House (Debit);  NETC: National Electronic Toll Collection; RTGS: Real Time Gross Settlement. 🚀 UPI Momentum UPI is now the most popular and preferred payment mode in India revolutionising the P2P as well as P2M transactions (Das, 2023a). Apart from being a user-friendly interface and facilitating QR code-based payments, the UPI has evolved to include advanced functionalities such as offline payments through NFC technology (UPI Lite X), payments through feature phones (UPI 123Pay) and AI based conversational payments (hello! UPI)  The volume of UPI transactions has increased multi-fold from 539 crore in 2018-19 to 13,113 crore in 2023-24 and their value from ₹8.8 lakh crore to ₹200 lakh crore during the same period. Currently, UPI is processing close to 45 crore transactions in a day (June 2024). 💡 Source - RBI's Report on Currency and Finance - The Reserve Bank of India released the Report on Currency and Finance for the year 2023-24. The theme of the Report is “India’s Digital Revolution”. The Report reflects the views of the contributors and not of the Reserve Bank.

406

15 Comments

Regulation drives innovation and change is imminent in fintech. But adaptation requires strategy. Here's my take on The RBI's new draft on Payment Aggregators: It is more than just paperwork; it's a catalyst. By mandating KYC norms and requiring authorization for both physical and online non-banking PAs, the RBI is setting a higher standard. What does this mean? 📌 𝗙𝗼𝗿 𝗣𝗔𝘀: Increased operational costs and a steeper path to merchant onboarding might seem daunting. Yes, it may limit the immediate pool of merchants. The new standards necessitate a solid compliance structure. It's a tough pill to swallow, but it ensures a safer transaction environment. 📌 𝗙𝗼𝗿 𝗠𝗲𝗿𝗰𝗵𝗮𝗻𝘁𝘀: Sweet pot of getting regulatory framework protection plus structured grievance redressal mechanism 📌 𝗙𝗼𝗿 𝗖𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀: This is where the true benefit lies. Enhanced data security, better fraud prevention, and a streamlined grievance mechanism directly contribute to customer confidence and trust in digital transactions. The road ahead will have its challenges. However, the long-term benefits of these regulations will fortify the foundations of our digital economy, making it more robust against the risks that come with rapid growth and innovation. As leaders in fintech, how should we prepare for these changes? 𝗘𝘅𝗽𝗹𝗼𝗿𝗲 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗥𝗕𝗜 𝗱𝗿𝗮𝗳𝘁 𝗵𝗲𝗿𝗲. https://lnkd.in/g3dHXCxr https://lnkd.in/gFwF-mGH 𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘆𝗼𝘂𝗿 𝘁𝗵𝗼𝘂𝗴𝗵𝘁𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗶𝗺𝗽𝗮𝗰𝘁 𝗼𝗳 𝘁𝗵𝗲𝘀𝗲 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗻 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗳𝗶𝗻𝘁𝗲𝗰𝗵? #dhanasekaran #fintech #belstar #mfitech #paymentaggregators

19