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Fintech Market Overview

This article does not constitute legal advice.

Banking in India

Fintech Software

Neo-banks are a new category of banks that operate entirely online (i.e., without any physical branches). However, the RBI does not currently recognise online-only banks in India and insists on physical infrastructure. In the absence of virtual banking licences, neo-bank entities now offer various banking services by partnering with traditional banks and are thereby indirectly within the RBI's regulatory oversight. Recently, the RBI amended the regulatory framework governing prepaid wallets and even allowed non-banks to issue full-KYC wallets, which enable cash withdrawal (within a prescribed limit). Consequently, non-bank issuers (such as neo-banks and other fintech companies) can avail a licence and issue a full-KYC wallet that can support services such as cash withdrawal, which can boost the growth of neo-banks.1

In the interest of financial inclusion, the RBI has permitted the operation of 'payments banks', which are small-scale banks that offer certain services such as accepting deposits and issuing ATM cards, but are prohibited from issuing credit cards or advancing loans. Previously, payments banks were restricted to holding a maximum balance of 100,000 rupees per individual customer at the end of the day, but this limit has now been revised by the RBI to 200,000 rupees per individual customer in light of furthering financial inclusion and the objective of giving more flexibility to payments banks.1

Lending in India

Fintech in India

Fintech in other countries

Notes
  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/india
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