Tech Cos with Superior voting rights enabled to do IPOs

In a welcome move, SEBI vide PR No. 16/2019 released its decision with regard to ‘Framework for Issuance of Differential Voting Rights (DVR) Shares’. Per the dialogue, a Company having superior voting rights (“SR Shares”) would be permitted to do an Initial Public Offering (“IPO”) only of ordinary shares to be listed on the Main…

RBI’s Enabling Framework for Regulatory Sandbox: A Draft

Regulatory Sandbox refers to live testing of new financial products or services in an environment wherein certain regulatory requirements are relaxed for the limited purposes of testing for a stipulated time. Vide a press release, the Reserve Bank of India, on April 18, 2019 released the draft of ‘Enabling Framework for Regulatory Sandbox’.  At its…

Public Credit Registry

India’s Central Bank, the Reserve Bank of India (“RBI”) is presently working on a major revamp to the country’s credit information infrastructure by the introduction of a Public Credit Registry (“PCR”). On introduction, PCR aims to ease credit woes of small entrepreneurs and reduce information asymmetry. To this tune, RBI constituted High Level Task Force…

Peer-to-Peer Lending

Alternate Lending business models have, by now, settled into the Indian financial demographics. These include P2P lenders, Marketplace Platforms and Digital lending. These aim at resolving specific credit needs of retail consumers and Micro and small businesses (“MSE”) that do not have a complete or any credit history thus remaining disabled from old school bank…

Policy Making for Digital Marketplaces

The Indian Business-to-Consumer (B2C) e-commerce market was valued at USD 38.5 billion in 2017 and is estimated to rise to USD 200 billion in 2026. Business-to-Business (B2B) e-commerce was estimated to be around USD 300 billion. Digital marketplaces have become hits nationally as well as globally.[1] Digital marketplaces are digital platforms on which goods or…

A Sandbox for Indian Fintechs

[first posted on indiacorplaw.in] In his keynote address at the NITI Aayog FinTech Conclave 2019 held on 25 March 2019, the Governor of the Reserve Bank of India (RBI), Shaktikanta Das, addressed and acknowledged the growth and potential for fintech firms in India. While doing so, he acknowledged that India stands second in fintech adoption at a…

Evolution of India’s Digi Payment Ecosystem: Stage II

To read Part I, Click here Various systems are currently in place to meet remittance requirements. The National Electronic Funds Transfer (“NEFT”) began its journey only in 2005 as a local Electronic Funds transfer system, it later expanded to cover larger areas. At present, NEFT acts as a nation-wide payment system and facilitates one-to-one funds…

Evolution of India’s Digi Payment Ecosystem: Introduction and Paper-based Payments

Presently India boasts of a robust and advanced payment system ecosystem with the National Electronic Funds Transfer (“NEFT”), Immediate Payment Service (“IMPS”), Aadhaar-Enabled Payment System (“AEFT”), and Unified Payments Interface (“UPI”) among others. The need for bulk and repetitive payment systems is met by systems such as Electronic Clearing Service (“ECS”), the National Automated Clearing…

RBI suggests ease of norms for Retail Payment Systems, discusses competition concerns

The Reserve Bank of India (“RBI”) on January 21, 2019 floated a policy paper on ‘Authorisation of New Retail Payment Systems’. This policy expresses risk considerations arising from extant concentration risk in retail payment risks, from a financial stability perspective. The Policy discusses possibilities of review of norms pertaining to the entry of retail payment…

INTEROPERABILITY GUIDELINES FOR PPI

Interoperability is the technical compatibility that enables a payment system to be used in conjunction with other payment systems. The Reserve Bank of India (“RBI”) on October 16, 2018, issued much awaited Operational Guidelines for Interoperability in reference to Prepaid Payment Instruments (“PPI”)[1] to supplement with the provisions of Master Direction on PPIs. As a…

Data Protection (Part 3/3): Impact on the Financial Segment

Financial institutions deal with sensitive information. If they suffer a data breach, there is a significant amount of data at the impending threat of criminal activities such as thefts and identity frauds. It is thus important to understand the impact of this draft bill on financial institutions and navigate the steps to be taken to…

Data Protection (Part 2/3) : A Critical Analysis

The Draft Bill is glaringly inspired by the European Union’s GDPR.  It recognizes four rights of citizens. Firstly, Right to Consent and Access encompassing the right to know ‘the how and where’ of an individual’s data utilization and to prohibit usage of such data without consent, Secondly, Right to Correction incorporating the right to get corrected, any mistakes in…

Data Protection (Part 1/3) : Introduction & Background

This series intends to address the loopholes in the Draft Data Protection Bill formulated by the Committee under the Chairmanship of Hon’Ble B.N. Shrikrishna and to analyze the impacts the new Law would have on Financial Institutions. In furtherance of its objectives, the second part of this series traces the aims and objectives of this…

Algorithmic Trading in India

CONCEPT: Algorithmic trading is a step-by-step instruction for trading actions taken by automated systems. It refers to any order that is generated using automated execution logic. As the word ‘algorithmic’ suggests, this trading involves complex formulas, mathematical models  and delegation of decision making to the algorithms, in turn, enabling traders to generate a large number…