This is a very good step I feel. I have seen how big folks manage this ever greening. This won't stop completely but reduces the future volumes. Good for our economy.

What are your thoughts on the points the article raises?

Product Manager

A fun article for finance enthusiasts that want an insight into how the RBI regulates the banking industry

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How to annoy fund managers with bank investors

RBI wants banks to ditch some funds

RBI releases a circular that restricts banks and NBFCs from investing in certain funds. Primary reason: to stop the "evergreening" of loans. But there's more than meets the eye..

RBI releases a circular that restricts banks and NBFCs from investing in certain funds. Primary reason: to stop the "evergreening" of loans. But there's more than meets the eye..- Grapevine

Link: https://boringmoney.in/p/rbi-wants-banks-to-ditch-some-funds


Summary:

1. RBI released a circular towards the end of last month which prohibited banks, NBFCs and other financial institutions from lending to companies that have received investments from funds where the banks are themselves investors.

2. The reason for this is that RBI feels "evergreening" of loans is a big problem. A borrower is unable to repay their loan, but instead of the bank recognising the loan as a bad loan, the bank (or NBFC, etc) indirectly gives them money via an alternative investment fund (AIF).

3. On the face of it, RBI disallowing banks from making these investments is a good measure. But once you scratch the surface there are a lot of problems.

4. For instance, the lending and the investing arm of a bank are supposed to be separated out. How would the investing arm know about the decisions of the lending arm?

5. Another problem is that AIFs which have bank investors will be wary about investing in companies that have borrowed from their bank investors. This is bad! It will stop them from making the best decisions for their investors.

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After the recent RBI mandate to banks and NBFCs against unsecured personal loans, the lenders have pulled back their hands from digital lending. My company has already started facing the impact. Tomorrow onwards we won't be able to disburse any new loans from our platform because the lender is unsure of the road ahead.

Personally, I can't afford to go through another layoff this year :')

Brace for impact people in lending biz!!!

RBI bans Bajaj Finance to stop lending under ecom and insta emi products with immediate effect- WHY?

Director Finance

- **RBI** has ordered four **NBFCs** to halt new loan sanctions and disbursements from October 21, 2024.
- **Morgan Stanley** report suggests more lending companies might face similar scrutiny.
- **Asirvad Microfinance**'s lending rates are not significantly different from other lenders, raising questions about broader issues.
- **RBI** aims to enforce strict regulatory compliance and protect borrowers from unfair practices.
- **Governor Shaktikanta Das** warns NBFCs against incentivizing loan targets, emphasizing self-correction.

Source: [Hindustan Times](https://www.hindustantimes.com/business/rbi-may-act-against-more-nbfcs-to-check-obscure-lending-practices-morgan-stanley-101729241471270.html), [The Economic Times](https://economictimes.indiatimes.com/news/economy/finance/rbi-may-act-gainst-more-nbfcs-to-check-obscure-lending-practices-morgan-stanley/articleshow/114343845.cms)

RBI Cracks Down on Four NBFCs Amid Scrutiny

Journalist

- The Reserve Bank of India (RBI) has ordered Navi Finserv and three other non-banking financial companies (NBFCs) to stop sanctioning and disbursing loans. 
- This action is due to excessive interest rates and non-compliance with RBI regulations. 
- The business freeze will remain until the firms take corrective actions to the satisfaction of the RBI. 
- The restrictions will not affect existing loan servicing or collections. 
- Navi Finserv is committed to addressing all the concerns raised with promptness and completeness.

Source: [Inc42](https://inc42.com/buzz/rbi-bars-sachin-bansals-navi-finserv-from-disbursing-loans/)

RBI Halts Loan Disbursement by Sachin Bansal's Navi Finserv

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We all are in this together, this too shall pass! 

For better understanding - Tap here

P2P lending allows individuals to lend to others through RBI-regulated non-banking financial companies (NBFC) platforms by matching lenders and borrowers on their platform. 

RBI curb on P2P platforms offering early withdrawal products: What it means and who gets impacted?

All the nbfc lending/p2p company folks - brace up

Analyst

Anyone from RBI or related fintech, what's cooking?

The initiative by the Association of P2P Lending Platforms comes on the back of sharp displeasure expressed by the countrys banking regulator over a spate of such products offering attractive interest rates and instant liquidation options to retail investors.

P2P lenders to stop ‘liquid funds’ as RBI peers into business

P2P lending regulation guidelines

Senior Consultant

https://m.economictimes.com/tech/technology/non-chinese-lending-apps-including-payus-lazypay-kissht-blocked-on-meitys-order/articleshow/97656552.cms

How safe is it to work in a fintech when RBI/govt goes on banning spree

Software Engineer

I have put lots of my liquid money into P2P lending and get 1k daily from cred mint, mobikwik xtra and 12%.

Reason- My bank pays interest which hardly can beat inflation.

Question - Where should I park my liquid money ? 

PS - Markets at high and real estate is bound to crash.

P2P lending diversification

Why did this happen? Slice already owns an NBFC license. What does this help them achieve? 
 "to better serve their shared mission and reach more consumers who currently lack access to basic banking services"

Slice merges with North East Small Finance Bank

It helps them achieve a lot. They can take deposits, extend loans, issue cards without needing a partner and maybe start mutual funds and insurance businesses. Huge W for Slice.

The distribution of deposits in scheduled commercial banks(SCBs) across the Indian economy reaffirms that India is fundamentally an ascending world country.

1. Households make up the majority of deposits, a whopping 61.95%, close to ₹11,792,507 crores in SCBs.

It appears that Indian Households are poised as significant potential consumers. It will be interesting to see how startups position themselves towards B2C services and product offerings that appeal to this sector.

2. There is also a significant gender split, with deposits from women roughly being a fifth of the total (20.49%), close to ₹3,900,593 crores. 

This represents a sizeable yet underutilised female demographic, a growth opportunity waiting to be tapped for startups. 
Women centric consumption will become a macro trend as a second order effect. Think maternity care, female hygiene, beauty, women-centric fashion and more.

3. Importantly, the majority of deposits are held in urban and metropolitan centres, cumulating to around 76% of all deposits (around ₹15,270,500 crores). 

It was always obvious that the highest revenue opportunity is in the Indian Metro scene. There exists mainstream relevance and aspiration for folks outside of these spaces. The road to higher likelihood of growth and profitability leads through the Indian Metro.

4. Large deposits for the Non-Financial Corporations at around ₹32,611,52 crores or 17.13% presents an uncanny duality.

On one hand, these corporations are likely competition for startups. But? On the other hand, they can also be viewed as potential clients. 
B2B startups that offer valuable services to these corporations, such as SaaS solutions, stand to gain from this.

5. The Financial Corporations section, represents 5.84% of total deposits (₹1,111,565 crores)

It creates an opportunity for FinTech startups seeking to disrupt or foster partnerships.

Link to RBI data: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=BsrPublications#!21

The Indian Growth Story [2023 Update]

https://m.economictimes.com/tech/startups/p2p-lenders-to-stop-liquid-funds-as-rbi-peers-into-business/articleshow/108686922.cms


https://twitter.com/ravihanda/status/1771021456287088858

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