New Delhi, <keyword id="20004114" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="keywords">Vijay Shekhar Sharma</keyword>, one of the most recognised faces of India's fintech industry, has seen a fair share of controversies. Sharma launched <keyword id="19898109" type="General" weightage="20" keywordseo="paytm" source="keywords">Paytm</keyword> - an acronym for 'pay through mobile' - offering mobile recharges. He launched wallet services in 2011 but the big push came with the 2016 demonetisation. He took out front-page ads in top newspapers with Prime Minister Narendra Modi's photo, calling demonetisation the "boldest decision in the financial history of independent India". With fewer currency notes in circulation, Paytm was on a roll. Sharma made a splash in 2018 by getting USD 300 million investment in Paytm from <keyword id="19921921" type="General" weightage="20" keywordseo="warren-buffett" source="keywords">Warren Buffett</keyword>'s Berkshire Hathaway. *Controversies* Paytm was mired in controversies with its Chinese connection following huge investments from Alibaba Group. The Chinese internet firm became the biggest shareholder in Paytm with a 34.7 per cent stake before the company's initial public offer. Alibaba group firm Antfin sold around 5 per cent shares to lower its stake below 25 per cent to comply with regulatory requirements at the time of IPO. To shed its Chinese-owned entity image, Paytm in August 2023 announced that founder and CEO Vijay Shekhar Sharma would acquire a 10.3 stake in Antfin through his overseas entity Resilient Asset Management BV which will make him the largest stakeholder in the company with 19.42 per cent stake. In return, Resilient issued a debt instrument --optionally convertible debentures, to Antfin thereby maintaining the economic interest of Alibaba group firm. With this transaction, Antfin's direct stake in Paytm was reduced to 13.5 per cent. Antfin further sold 3.6 per cent in Paytm to bring its shareholding to less than 10 per cent and at present holds 9.89 per cent of the fintech firm. The company's market cap has eroded drastically since the time of its listing. The company's IPO opened on November 8, 2021, in the price band of Rs 2,080-2,150 per share. The Paytm IPO made history with over Rs 18,300 crore share sale 'making it the largest public issue in India's corporate history. But the company's stock made a weak debut in the market on November 18 and hit a lower circuit after recording about 20 per cent decline during trading hours. It finally closed at Rs 1,560, down by about 27 per cent, compared to its issue price of Rs 2,150. Since then, Paytm shares have not been able to cross even half the mark of the issue price. After the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>'s January 31 move, One97 Communications shares tanked around 40 per cent to close at Rs 487.05 on BSE on Friday. Billionaire businessman <keyword id="19952201" type="General" weightage="20" keywordseo="warren-buffet" source="keywords">Warren Buffet</keyword>'s Berkshire Hathaway sold its stake in Paytm at a loss of 31 per cent per share in November 2023. Berkshire Hathaway had invested in Paytm for about Rs 1279 per share but sold it for Rs 877.29 apiece. At present, Cayman Island-registered SAIF III Mauritius Company Limited is the single largest direct shareholder in Paytm with a 10.83 stake followed by Sharma's Resilient Asset Management BV with a 10.29 per cent stake. SAIF Partners is led by Chinese-origin entrepreneurs with Andrew Y Yan as its managing partner. *Paytm run-ins with RBI* RBI on June 19, 2018, prohibited Paytm Payments Bank from opening any new account and wallet with effect from June 20, 2018, on account of supervisory concerns, which were lifted by RBI on December 27, 2018, with effect from December 31, 2018. The Office of Banking Ombudsman issued a show-cause notice dated March 6, 2019, for Paytm Payments Bank's failure to monitor a certain account maintained with it which had shown a sudden increase in the velocity of daily transactions involving immediate transfer to other banks. The actions were found to be in the violation of RBI's provisions on KYC. RBI rejected Paytm Payments Services Ltd's (PPSL) application to operate as a payment aggregator on November 25, 2022. The banking regulator asked the firm to re-submit applications within 120 days after it gets government approval on investment made by OCL into PPSL as per FDI guidelines. The regulator asked PPSL to continue operations with the condition that no new merchants should be onboard. After completion of 120 days, RBI again granted PPSL an extension but without removing the bar on new merchant onboarding. RBI issued a show cause notice to PPBL on July 29, 2021 for submitting false information to RBI confirming completion of the transfer of the Bharat Bill Payment Operating Unit ("BBPOU") by OCL to PPBL on August 28, 2017. The actual transfer of the BBPOU business by the Company to PPBL was completed only by March 31, 2021. RBI on October 1, 2021, imposed a penalty amounting to Rs 1 crore on PPBL for a contravention of the Payment and Settlement Systems Act, 2007. RBI imposed a penalty of Rs 5.93 crore on PPBL on October 10, 2023, after it found several non-compliances including banks failure to identify beneficial owners in respect of entities on-boarded by it for providing payout services. RBI found that PPBL did not monitor payout transactions and carry out risk profiling of entities availing payout services, breached the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services. The banking regulator found that PPBL reported a cyber security incident with delay and failed to implement device binding control measures related to 'SMS delivery receipt check'. PPBL video-based customer identification process infrastructure failed to prevent connections from IP addresses outside India.

Vijay Shekhar Sharma: The controversies of the architect of fintech

The Reserve Bank has imposed a penalty of ₹1 crore on <keyword id="3236791" type="General" weightage="20" keywordseo="paytm-payments-bank" source="Orion">Paytm Payments Bank</keyword> Limited (PPBL) and ₹27.78 lakh on <keyword id="151105" type="General" weightage="20" keywordseo="western-union" source="Orion">Western Union</keyword> Financial Services for non-compliance with certain directions. In a release on Wednesday, the <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> said on examination of PPBL's application for issue of final Certificate of Authorisation (CoA), it was observed that it had submitted information which did not reflect the factual position. "As this was an offence of the nature referred to in Section 26 (2) of the Payment and Settlement Systems Act, 2007, a notice was issued to PPBL. "After reviewing the written responses and oral submissions made during the personal hearing, the RBI determined that the aforementioned charge was substantiated and warranted the imposition of a monetary penalty," it said. Thereafter, the central bank by an order on October 1 imposed a monetary penalty of Rs 1 crore on PPBL. As regards Western Union Financial Services, the RBI said the company had reported instances of breach of the ceiling of 30 remittances per beneficiary during 2019 and 2020 and filed an application for compounding of the violation. "RBI has determined that the non-compliance warranted the imposition of a monetary penalty after analyzing the compounding application, and oral submissions made during the personal hearing," it said. The RBI, however, added the penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers. SEE ALSO <a href="https://www.businessinsider.in/retail/news/titan-and-dmarts-performance-hints-towards-a-strong-growth-for-reliance-retail/articleshow/87159776.cms" data-type="tilCustomLink">Titan and DMart’s performance hints towards a strong growth for Reliance Retail</a> <a href="https://www.businessinsider.in/stock-market/news/elon-musks-spacex-is-stirring-up-trillion-dollar-hype-heres-what-morgan-stanley-says-clients-are-talking-about-/articleshow/87172008.cms" data-type="tilCustomLink">Elon Musk's SpaceX is stirring up trillion-dollar hype. Here's what Morgan Stanley says clients are talking about.</a> <a href="https://www.businessinsider.in/international/news/syria-massacre-government-attack-kills-4-children-on-their-way-to-school-un-says/articleshow/87172007.cms" data-type="tilCustomLink">Syria 'massacre': Government attack kills 4 children on their way to school, UN says</a>

RBI imposes ₹1 crore penalty on Paytm Payments Bank

<ul><li>RBI's recent curb on <keyword id="3236791" type="General" weightage="20" keywordseo="paytm-payments-bank" source="Orion">Paytm Payments Bank</keyword> has triggered a fresh spree of <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> share sell-off.</li><li>Paytm’s shares had plunged nearly 12% two days ago, and on Wednesday, it closed trade at ₹634.</li><li>Global investment bank Macquarie had slashed Paytm’s target price to ₹700 last month.</li></ul>Even though Paytm was not doing any wonders on the stock exchange, the last one week has turned out to be even worse for the digital payments giant. The Reserve Bank of India’s (RBI) recent curb on Paytm Payments Bank has triggered a fresh spree of share sell off, reducing the company’s share value<a href="https://www.businessinsider.in/stock-market/news/paytms-shares-hit-an-all-time-low-plunging-below-the-700-mark-after-rbi-pulls-up-its-payments-bank/articleshow/90193957.cms"> below ₹700</a>. Now analysts believe if this sell-off continues, Paytm’s share price could dip down even further to ₹500-₹550 mark. “Paytm share price may touch the level of 500 levels [sic] very soon. The negative sentiments in the stock has triggered a massive sell-off and the probability of rebound very frail. Investors are advised to exit the stock and wait for stability at lower levels for fresh entry,” Ravi Singh, vice president and head of research at Share India, told Business Insider. Meanwhile, Manoj Dalmia, founder and director of Proficient Equities, believes that Paytm could dip down to ₹547 levels. But the investors should not lose hope just yet. Dalmia also notes that Paytm’s share price looks weak at the current level and a recovery can happen “if consolidation takes place at the current level”. With this, Paytm can retrace back to ₹764, he noted. “Paytm reported that it has disbursed more than 4 million loans in January and February and the total value stands at ₹2095 crore. It has doubled the total payment value of transactions processed through its merchants to ₹1.65 lakh crore. The price looks weak at the current level…,” he specified. Nearly 75% of its valuation has been eroded ever since Paytm made its entry into the public market last November. It is important to note that Paytm had raised capital at the valuation of $19.9 billion in its initial public offering (IPO), but its current market capitalisation is ₹41,142 crore ($5.4 billion). The company’s shares closed at ₹634 on Wednesday. Paytm’s shares had <a href="https://www.businessinsider.in/stock-market/news/paytms-shares-hit-an-all-time-low-plunging-below-the-700-mark-after-rbi-pulls-up-its-payments-bank/articleshow/90193957.cms">plunged nearly 12% </a>two days ago. Paytm Payments Bank is a joint venture between Paytm and its founder <keyword id="198636" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="Orion">Vijay Shekhar Sharma</keyword>. It is important to note that Paytm Payments Bank is not included under the public offering of One 97 Communications, instead it is an associate entity. Paytm Payments Bank is the backbone behind several Paytm offerings including insurance, digital payments and lending. The central bank had banned Paytm from<a href="https://www.businessinsider.in/business/news/paytm-payments-bank-denies-report-claiming-it-leaked-data-to-chinese-firms/articleshow/90203210.cms"> onboarding new customers</a> after noticing certain “material supervisory concerns”. RBI has directed Paytm Payments Bank to appoint an information technology (IT) audit firm to conduct a comprehensive system audit of its IT system. Global investment bank Macquarie had slashed <a href="https://www.businessinsider.in/stock-market/news/macquarie-slashes-paytms-target-price-to-700-goldman-sachs-upgrades-it/articleshow/89401105.cms">Paytm’s target price to ₹700</a>, from previous ₹1,200 in November 2021 and ₹900 in January 2022, in February this year. SEE ALSO <a href="https://www.businessinsider.in/business/news/nykaas-falguni-nayars-net-worth-is-four-times-higher-than-paytms-vijay-shekhar-sharma/articleshow/90264203.cms" data-type="tilCustomLink">Falguni Nayar's net worth is now four times higher than that of Vijay Shekhar Sharma</a> <a class="tout-title-link" href="https://www.businessinsider.in/finance/news/tensions-around-high-crude-oil-prices-have-eased-as-price-goes-below-100-per-barrel/articleshow/90255285.cms">Tensions around high crude oil prices have eased as price goes below $100 per barrel</a> <a href="https://www.businessinsider.in/investment/news/india-is-monitoring-crypto-transactions-of-700-investors-evaders-could-reportedly-face-a-hefty-penalty-tax/articleshow/90263407.cms">India is monitoring crypto transactions of 700 investors – evaders could reportedly face a hefty penalty tax</a>

Paytm share price can fall further to ₹500-levels, say analysts

Ashneer Grover, who was sacked along with his wife Madhuri Jain Grover by fintech platform BharatPe over alleged financial irregularities, has slammed the Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) over its latest directive to non-bank prepaid payment instruments to stop loading credit lines onto their products. In a tweet, Grover said that "not allowing loading of pre-paid instruments through credit is aimed at protecting bank's lazy credit card business from Fintech's potent BNPL (buy now pay later) business". "It's a flex move by banks -- rent seeking. But market is market and regulation will eventually come around to what market needs," he added. The RBI, in its latest one-page circular, has disallowed non-bank PPIs from loading credit, and several such startups and firms have already stopped customers' transactions on their prepaid cards to avoid penalty. The banking PPIs include HDFC Flexipay, ICICI PayLater, HDFC Payzapp, SBI YONO and others, along with several UPI-driven platforms like Paytm, PhonePe, Google Pay and Amazon Pay, etc. "The PPI-MD (PPI-master direction) does not permit loading of PPIs from credit lines. Such practice, if followed, should be stopped immediately. Any non-compliance in this regard may attract penal action under provisions contained in the Payment and Settlement Systems Act, 2007," according to the RBI directive. Grover is reportedly in talks with US-based private equity companies to raise up to $300 million for a new startup. "Today I turn 40. Some will say I've lived a full life and experienced more things than most. Created value for generations. For me it's still unfinished business. Time to disrupt another sector. It's time for the Third Unicorn," he had posted last week. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/business/startups/news/rejected-i-banks-manufacturers-for-not-having-enough-women-on-board-says-mamaearth-founder/articleshow/92429742.cms" style="">Rejected i-banks, manufacturers for not having enough women on board says Mamaearth founder</a> <a class="tout-title-link" href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-players-bullish-on-hiring-say-crash-is-just-a-phase/articleshow/92425464.cms" style="">India’s crypto players bullish on hiring; say crash is just a phase</a> <a href="https://www.businessinsider.in/tech/apps/news/google-has-termed-slice-as-a-harmful-app-recommending-users-to-uninstall-it/articleshow/92429265.cms" style="">Slice payments app spies on photos, audio records and call history, says Google</a>

Ashneer Grover slams RBI over recent mandate

<ul><li>Fintechs issuing <keyword id="4294146" type="General" weightage="20" keywordseo="digital-loans" source="Orion">digital loans</keyword> witnessed an over three-fold disbursal growth in Q2. </li><li>The number and value of disbursals showed an increase in both year-on-year as well as sequential basis. </li><li>The average loan ticket size, however, witnessed a relatively moderate growth of 27% year-on-year to ₹8,602. </li></ul><keyword id="59794" type="General" weightage="20" keywordseo="digital-lending" source="Orion">Digital lending</keyword> platforms have seen their disbursals rise by over threefold year-on-year in Q2 FY23 to ₹14,016 crore. In the same period last year, they stood at ₹4,435 crore. According to a report by Fintech Association for Consumer Empowerment (FACE) which collated data from 21 FACE members, disbursals grew both in volume and value terms on a year-on-year, as well as sequential basis. The number of loans disbursed in Q2 increased 149% YoY to 16.3 million. The average loan ticket size stood at ₹8,602 — increasing 27% YoY. The report notes that the average ticket size varies across lenders due to the different target audience and segments. “We also see upward and downward movements regarding ticket size across lenders as they transition to other products and customer segments,” the report said. The difference in the consumer profiles and segments is also evident from the huge ‘spread’ in the processing fee and rate of interest charged by these fintech companies. According to the report, the processing fee spread is between 1.1% to 5.3%, while the interest rate spread is between 14.5% to 38.3%. “A number of factors, including the cost of funds, operations and risk profile of customers, influence the pricing for the customers and the range is perhaps reflective of the same,” the report said, explaining the reasons for the spread. <cmsannotation type="cmsannotation" annotationid="RBI’s digital lending and microfinance norms aimed at consumer protection" comment="subhead" text="RBI’s digital lending and microfinance norms aimed at consumer protection"><keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>’s <keyword id="50691" type="General" weightage="100" keywordseo="digital" source="Orion">digital</keyword> lending and microfinance norms aimed at consumer protection</cmsannotation> The report also says new regulations in the sector will act as growth boosters. “Implementation of RBI’s Digital Lending norms brings tailwinds for the industry as it sets clear rules and standards, boosting the confidence of the customers, fintech lenders and other market participants,” said Sugandh Saxena, CEO at FACE. The norms were announced in August and notified in September this year. RBI’s digital lending norms provide for transparent pricing, cutting out the lending service providers out of the loan sanction process, an easier and transparent mode for borrowers to prepay their digital loans without any penalty, among other things. In addition to this, the RBI had also<a href="https://www.businessinsider.in/finance/news/customer-protection-guiding-light-of-revamped-microfinance-regulations-says-rbi-deputy-governor/articleshow/95352941.cms/"> announced</a> a slew of measures for the microfinance sector, including policies for conduct of employees, preventing coercive measures against borrowers, and transparent pricing of loans. This year, Chinese lending apps also <a href="https://www.businessinsider.in/india/news/rbi-tightens-norms-for-chinese-lending-apps/articleshow/93629917.cms">came under scrutiny</a> of the Enforcement Directorate, which booked cases against more than 400 apps and 50 non-banking finance companies (NBFC). SEE ALSO: <a href="https://www.businessinsider.in/science/health/news/can-diabetic-drugs-help-you-lose-weight-heres-what-experts-say/articleshow/95817157.cms">Can diabetic drugs help you lose weight? Here’s what experts say</a> <a href="https://www.businessinsider.in/finance/news/customer-protection-guiding-light-of-revamped-microfinance-regulations-says-rbi-deputy-governor/articleshow/95352941.cms">Customer protection 'guiding light' of revamped microfinance regulations, says RBI deputy governor</a> <a href="https://www.businessinsider.in/stock-market/news/a-year-after-market-debut-paytm-is-the-worst-performer-among-recent-large-ipos-cartrade-policybazaar-and-lic-join-the-party/articleshow/95762071.cms">A year after market debut, Paytm is the worst performer among recent large IPOs – Cartrade, Policybazaar and LIC join the party</a>

Digital lending platforms see 3x year-on-year rise in disbursals to ₹14,016 crore in Q2 FY23

<ul><li>Walmart had acquired <keyword id="6354742" type="General" weightage="20" keywordseo="flipkart" source="Orion">Flipkart</keyword> for a whopping $16 billion, giving exits to both founders Sachin and Binny Bansal.</li><li><keyword id="225032" type="General" weightage="20" keywordseo="sachin-bansal" source="Orion">Sachin Bansal</keyword> went on to found his financial products and services company Navi Technologies, which is now looking to go public.</li><li>Yet Sachin Bansal is still dealing with eight lawsuits related to his tenure at the ecommerce titan Flipkart.</li></ul>It has almost been four years since Sachin Bansal formally gave up all leadership responsibilities of Flipkart, yet he is still dealing with eight lawsuits related to his tenure at the ecommerce titan. The <a href="https://www.businessinsider.in/stock-market/news/flipkart-cofounder-sachin-bansals-latest-venture-navi-files-draft-papers-for-3350-crore-ipo/articleshow/90172988.cms">draft red herring prospectus (DRHP) of Navi Technologies</a>, Bansal’s latest entrepreneurial venture, revealed that there are currently thirteen lawsuits and litigations filed by or against the 40-year-old. While some of these matters are related to Bansal’s personal life, others are all around his stint at Flipkart. The <a href="https://www.businessinsider.in/business/ecommerce/news/flipkart-and-tiger-global-have-a-billion-dollar-notice-to-respond-to-in-the-next-90-days/articleshow/85059732.cms">latest one of this is by Enforcement Directorate</a> (ED), where the state-run financial investigation agency issued a show cause notice against <keyword id="2119269" type="General" weightage="20" keywordseo="flipkart-founders" source="Orion">Flipkart founders</keyword> Sachin and Binny Bansal in July 2021. The agency asked both the founders why they shouldn't face a $1.35 billion penalty over alleged violation of Foreign Exchange Management Act (FEMA) between 2009 and 2015. The notice was also sent to investors Accel, Tiger Global, Accel nominee director Subrata Mitra, and Tiger Global nominee director Lee Fixel, who had invested in Flipkart before it was acquired by Walmart in 2018. In response, Sachin Bansal filed a <a href="https://www.businessinsider.in/business/news/flipkarts-sachin-bansal-moves-madras-high-court-challenging-ed-notice/articleshow/85903371.cms">writ petition before Madras High Court </a>in August to challenge the show cause notice. The matter is currently pending before court. However, ED has not taken any steps in the matter so far. “...If any adverse order is passed against the Promoter [in this matter], such outcome may have an adverse impact on the reputation of our Company and may also affect the business prospects of our Company [Navi],” the DRHP noted. There are six matters where petitions have been filed against Flipkart between 2015 to 2021, where Bansal has been made a party “due to his past associations with Flipkart”, the DRHP read. “Our Promoter has not received any notice or summons nor has any access currently to any information pertaining to these matters,” it further added. Flipkart has also filed a case in Madhya Pradesh High Court against an individual. Bansal is mentioned as a petitioner. All these matters are currently pending in court. US retail giant Walmart had acquired Flipkart for a whopping $16 billion, in exchange for 77% stake in the ecommerce giant, in May 2018. Sachin Bansal had exited the company soon after the acquisition, whereas Binny Bansal still holds around 2.4% in the company. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/paytms-shares-hit-an-all-time-low-plunging-below-the-700-mark-after-rbi-pulls-up-its-payments-bank/articleshow/90193957.cms" data-type="tilCustomLink">Paytm’s shares hit an all-time low plunging below the ₹700-mark after RBI pulls up its payments bank</a> <a href="https://www.businessinsider.in/business/startups/news/interview-you-will-be-able-to-own-bajaj-made-yulu-bikes-by-next-year/articleshow/90172838.cms" data-type="tilCustomLink">INTERVIEW: You will be able to own Bajaj-made Yulu bikes by next year</a> <a href="https://www.businessinsider.in/business/corporates/news/ebixcash-has-four-businesses-but-only-one-of-them-is-pulling-in-big-money-for-the-company/articleshow/90190010.cms" data-type="tilCustomLink">EbixCash has four businesses but only one of them is pulling in big money for the company</a>

Four years later, Sachin Bansal is still battling eight lawsuits from his Flipkart days

<ul><li>The evergreening of loans is a term in which banks try to revive a loan that is on the verge of default by granting further loans to the same borrower.</li><li>A group of whistleblowers has written to the RBI, addressing their concerns over poor corporate governance at <keyword id="46717" type="General" weightage="20" keywordseo="indusind-bank" source="Orion">IndusInd Bank</keyword>’s micro finance subsidiary allegedly practising evergreening of loans.</li><li>However, the lender has denied all the allegations and said it had disbursed 84,000 loans without customer consent in May 2021 due to technical glitch.</li><li>Following this, shares of the bank slipped over 11% on November 8.</li></ul>Investors of IndusInd Bank seemed to be extremely disappointed at the lender on Monday morning as its shares were down more than 11% on concerns over the company’s handling of bad loans. Between October 17 to October 24, a few <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/whistleblowers-raise-loan-evergreening-issue-at-indusind-arm/articleshow/87531018.cms">whistleblowers had written </a>to banking regulator, the Reserve Bank of India (RBI), addressing their concerns over poor corporate governance at IndusInd Bank’s micro finance subsidiary, which allegedly practised “evergreening” of loans. Whistleblowers, including a group of senior employees at IndusInd Bank, alleged subsidiary Bharat Financial Inclusion of giving out evergreen loans worth thousands of crores since the outbreak of pandemic. Bharat Financial Inclusion is a non-banking financial company (NBFC) focused on providing loans to women to support their businesses. IndusInd took over the micro-finance lender in a stock deal in March 2019. What is evergreening? The evergreening of loans is a term in which banks try to revive a loan that is on the verge of default by granting further loans to the same borrower. Basically, banks provide more loans to the borrowers to stop them from turning into huge non-performing assets (NPAs). When customers do not repay principal amount and interest for a certain period of time, then such loans are considered as non performing assets or NPA. This practice might put lenders at risk of huge amounts of defaults. Besides, the RBI does not approve of evergreen loans and has set <a href="https://www.reuters.com/article/india-banks-regulation-idINKBN1FW21B">strict norms and potential penalties </a>for banks committing this practice. What did IndusInd do that has upset investors? While the bank denied allegations made by whistleblowers in a letter to the RBI and Chief Executive Officer (CEO) Sumant Kathpalia of evergreening of loans, it admitted it disbursed nearly 84,000 loans without customer consent due to ‘technical glitch’. “Due to a technical glitch in May 2021, nearly 84,000 loans were disbursed without the customer consent getting recorded at the time of loan disbursement. This issue was highlighted by the field staff within two days and the technical glitch was rectified expeditiously. Out of the above, only 26,073 clients were active with the loan outstanding at ₹34 crore, which is 0.12% of the September-end portfolio,” said IndusInd Bank in an exchange filing on November 6. <div type="image" title="Indusind ban =k" height="900" width="1200" msid="87581091" hostid="261"></div> What are analysts saying? Banking and finance analyst Hemindra Hazari told Business Insider that the bank has kind of actually admitted to the allegations made by the whistleblowers in a press release. “I have never seen any bank admitting to evergreening of loans. No bank will publicly ever admit to such loans because it will destroy their credibility. Although evergreening of loans is widely prevalent in the industry, no bank can publicly admit to doing it,” said Hazari. While answering on why investors are selling the bank’s stock even as the lender clarified that it denies the allegations Hazari said, “It is the number of loans i.e 84,000 loans that is worrying, not the amount of ₹34 crore. The fact that the system allowed 84,000 loans to be given without any approval is a very serious charge. Actually they have admitted to the main point of whistleblowers. Today, market reaction is very clear that they don’t believe what the management has said and there is a much bigger problem,” he said. Brokerage Emkay Global highlighted concerns over the bank not disclosing such glitches in loan books beforehand. “As far as provisioning is concerned, IndusInd Bank has come a long way and carries adequate contingent provisions over and above specific PCR (provisioning coverage ratio). But it could have done better in terms of communicating about management changes in Bharat Financial Inclusion and a technical glitch in the micro finance loans (MFI) book, which led to allegations of evergreening in the MFI book (which otherwise has always been an area of suspicion)," reportedly said brokerage Emkay Global in a report. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/subscribe-to-paytm-ipo-experts-are-not-fully-convinced/articleshow/87578255.cms">Looking to subscribe to Paytm’s IPO? Analysts raise caution</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/lt-invites-applications-from-women-professionals-who-wish-to-restart-their-careers-after-a-break/articleshow/87579465.cms">L&amp;T invites applications from women professionals who wish to restart their careers after a break</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/fino-payments-bank-ipo-allotment-is-tomorrow-november-9/articleshow/87577397.cms">Fino Payments Bank IPO allotment tomorrow, investors had oversubscribed by over 2 times</a>

What is Evergreening and why is it hurting IndusInd Bank’s investors today?

<ul><li>The <keyword id="2761019" type="COMPANY" weightage="20" keywordseo="Zebpay">ZebPay</keyword> Lending Platform will allow users to earn interest on their crypto holdings.</li><li>ZebPay will offer both open and fixed-term lending using the platform.</li><li>Only <keyword id="6354947" type="UNKNOWN" weightage="20" keywordseo="bitcoin">Bitcoin</keyword>, Ethereum, Tether and Dai tokens will be accepted at first.</li></ul>One of the oldest crypto companies in India, ZebPay, today launched a new lending platform for crypto asset exchange. The company says that the platform is a “first of its kind” <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" data-type="tilCustomLink">crypto</a> lending model in India and will allow users to lend their <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> to ZebPay, earning interest on the same. Of course, the returns will depend on the token in question, its value during a particular period, and how long it’s loaned for. “The ZebPay Lending Platform generates returns on users’ crypto investments if they lend select cryptos thus, providing an opportunity to earn a passive income by adding on to the returns gained from rise in crypto prices,” the company said. At launch, the lending feature will only support Bitcoin, Ethereum, Tether, and Dai tokens. “Depending on the term of deposit, users will be able to generate returns of upto 3% on their <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" data-type="tilCustomLink">Bitcoin</a> (BTC), upto 7% on Ethereum (ETH) and Dai (DaI) and upto 12% on Tether (USDT),” the company said in its announcement. Further, ZebPay will offer both open and fixed-term lending using the platform. Fixed-term lending includes 7-day, 30-day, 60-day and 90-day periods, and rate of return will vary based on the period. Tokens cannot be withdrawn till the term ends, and a penalty will be applied for withdrawing tokens in advance. The company will deposit returns to the investor’s trading wallet though, meaning there’s still a challenge in converting them to fiat currency. “We have always believed that crypto will enable a multi-fold increase to investors’ wealth. With the launch of the ZebPay Lending Platform, we want to give users the opportunity to grow their investments further, by making their existing crypto holdings do all the work,” said Avinash Shekhar, Co-CEO, ZebPay. The platform, which is called the Zebpay Lending Platform, is already live on ZebPay’s app. The company said users may have to update the app in order to get access to it. Crypto companies in India have faced troubles running exchanges for the past few weeks. The issues started after an informal guidance from the Reserve Bank of India (RBI), earlier this month, which led banks to withdraw services from crypto exchanges. Lending platforms like Zebpay’s could allow companies to keep users interested in <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" data-type="tilCustomLink">crypto</a>, and long-term investors will continue using their services. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/indians-are-holding-on-to-their-cryptos-amidst-all-the-uncertainty/articleshow/82971829.cms">Indians are holding on to their cryptos, amidst all the uncertainty — here is why</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/softbank-backed-paytm-pivots-to-a-3-billion-ipo-plan-a-year-into-the-pandemic-it-could-be-the-largest-market-debut-in-india/articleshow/83000446.cms">Softbank-backed Paytm pivots to a $3 billion IPO plan a year into the pandemic ⁠— it could be the largest market debut in India</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/here-is-a-list-of-government-job-openings-in-science-and-engineering-departments/articleshow/82995062.cms">Checkout these government job openings in science and engineering</a>

ZebPay launches first crypto-based lending platform in India

<ul><li>The Reserve Bank of India’s guidelines for auto-debit transactions will come into force from Friday.</li><li>E-mandates allow you to conveniently make payments automatically.</li><li>Here’s how to set up e-mandates for Jio, Disney+ Hotstar, Zerodha and more.</li></ul>The Reserve Bank of India has revised the guidelines for auto-debit transactions and this will come in force from today, October 1. These will affect users who have set up online subscriptions or recurring payments for their insurance premium, rent, utility bills or their systematic investment plans (SIPs) as these payments will have to be re-authenticated. If you are among those who have set up auto-debit for payments, you need to know about Reserve Bank of India’s e-mandate feature that allows you to place a standing instruction with your bank to automatically debit a predetermined amount from your bank account. Having an e-mandate set in place allows you to conveniently make payments automatically and avoid late payment charges and penalties. E-mandates are also an effective way for companies and businesses to ensure continuity in payments from their customers, so this allows both the buyers as well as sellers to benefit from the facility. <cmsannotation type="cmsannotation" annotationid="How to set up e-mandate for auto-debit of payments" comment="subhead" text="How to set up e-mandate for auto-debit of payments">How to set up e-mandate for auto-debit of payments</cmsannotation> E-mandate can be set up so that payments get auto-debited using either your debit card or your net banking. While banks are working on a common platform that will allow you to register for auto-debit of payments, you can currently set e-mandates for different platforms. Users can also use UPI to set up UPI autopay for their subscriptions. Some of the platforms such as Jio and Hotstar already allow you to set up UPI autopay for recharging your mobile or subscribing to their plans. <cmsannotation type="cmsannotation" annotationid="How to set e-mandate for Jio recharges" comment="subhead" text="How to set e-mandate for Jio recharges">How to set e-mandate for Jio recharges</cmsannotation> <div type="image" title="jio 1" msid="86650558" hostid="261" caption="&amp;lt;p&amp;gt;Enabling JioAutoPay.&amp;lt;/p&amp;gt;"></div> <ul><li>Open the MyJio app and open the menu from the left corner.</li><li>Now, scroll down and click on “JioPay”.</li><li>Now, select either “Bank Account” or “UPI”.</li><li>Now, select the plan with which you want to recharge your phone and click on “Proceed”.</li></ul> <div type="image" title="jio 2" msid="86650605" hostid="261" caption="&amp;lt;p&amp;gt;Accepting UPI autopay request.&amp;lt;/p&amp;gt;"></div> <ul><li>Now, enter your account details or UPI ID and click on proceed.</li><li>Authenticate the transaction in your bank account or UPI app.</li></ul><cmsannotation type="cmsannotation" annotationid="How to set e-mandate for Disney+ Hotstar subscription" comment="subhead" text="How to set e-mandate for Disney+ Hotstar subscription">How to set e-mandate for Disney+ Hotstar subscription</cmsannotation> <div type="image" title="Hotstar upi" msid="86650655" hostid="261" caption="&amp;lt;p&amp;gt;Enabling autopay for Disney+ Hotstar.&amp;lt;/p&amp;gt;"></div> To set up e-mandate for Disney+ Hotstar, follow the below steps: <ul><li>Sign in to your account and click on “Subscribe” at the top right corner.</li><li>Select a plan and click on “Continue”.</li><li>Now, select a payment option from credit card, debit card, net banking, Paytm and UPI.</li><li>In this example, we will set the e-mandate using UPI.</li><li>Enter your UPI ID and click on “Continue”.</li><li>You will get an auto-pay request in your UPI app such as PhonePe, Google Pay or other such apps.</li><li>Click on “Pay” and enter your UPI pin.</li></ul>ICICI Bank also allows you to set up e-mandates for loan repayment, here’s how to do it: <ul><li>Open the e-mandate page from <a href="https://leads.icicibank.com/NewSalesWeb/loadNpciEnachForm.htm?productCode=HL">here</a>.</li><li>Now, enter the details such as your loan number and personal details.</li><li>Then, you will be required to select if you want to create the mandate using your debit card or net banking.</li><li>Now, enter your debit account number, account type and IFSC code.</li><li>Then, enter the collection amount, frequency and date.</li><li>Click on “Authorize Mandate”.</li></ul><cmsannotation type="cmsannotation" annotationid="Here is how e-mandate can be set on Zerodha" comment="subhead" text="Here is how e-mandate can be set on Zerodha">Here is how e-mandate can be set on Zerodha</cmsannotation> <ul><li>Log into your Zerodha account and click on Console.</li><li>Now, click on “Funds” and go to Bank Mandates.</li><li>Now, click on “Create Mandate”.</li><li>Choose a bank account and click on “Continue”.</li><li>Now, verify your details using debit card or net banking.</li><li>Click on “Submit”.</li></ul>SEE ALSO: <a href="https://www.businessinsider.in/business/ecommerce/news/from-netflix-and-hotstar-to-airtel-to-jio-bills-brace-for-surprises-as-rbis-guidelines-on-auto-debit-transactions-kick-in-from-october-1/articleshow/86642500.cms">From Netflix and Hotstar to Airtel to Jio bills, brace for surprises as RBI’s guidelines on auto-debit transactions kick in from October 1</a> <a href="https://www.businessinsider.in/business/news/grace-periods-and-wallet-payments-apple-and-zoom-are-reaching-out-to-their-customers-ahead-of-the-new-rules-for-auto-debit-for-online-payments/articleshow/86649206.cms">Grace periods and wallet payments ⁠— Apple and Zoom are reaching out to their customers ahead of the new rules for auto debit for online payments</a>

You Searched For "Paytm penalty RBI" and got 9 results

Vijay Shekhar Sharma: The controversies of the architect of fintech

PTI

RBI imposes ₹1 crore penalty on Paytm Payments Bank

PTI

Paytm share price can fall further to ₹500-levels, say analysts

Kritti Bhalla

Ashneer Grover slams RBI over recent mandate

Kritti Bhalla

Digital lending platforms see 3x year-on-year rise in disbursals to ₹14,016 crore in Q2 FY23

Rounak Jain

Four years later, Sachin Bansal is still battling eight lawsuits from his Flipkart days

Kritti Bhalla

What is Evergreening and why is it hurting IndusInd Bank’s investors today?

Bhakti Makwana

ZebPay launches first crypto-based lending platform in India

BI India Bureau

What is e-mandate or UPI autopay and how to enable it for Jio, Hotstar and others

Rounak Jain