New NPCI guidelines bring bad news for UPI-only e-wallets PhonePe, Google Pay
PhonePe's and Google Pay's success ride on the back of UPI will soon hit a road block as the National Payments Corporation of India (NPCI) is all set to introduce new guidelines for digital payment companies to minimise concentration and systemic risks in UPI.
 
One of the important provisions initiated by NPCI is to put a cap on the UPI market share of digital payment companies. This move directly impacts UPI-only players such as Walmart's Phonepe, Google Pay and to be launched Whatsapp Pay. Interestingly, Paytm is the only major player which is still backing its wallet success and cards besides UPI.
 
Starting April 2020, PhonePe and Google Pay will have to limit their marketshare to 33 per cent which eventually blocks their growth plans. Till now, they have been burning a lot of cash to gain the highest market share and this move comes as a major setback.
 
Interestingly, Morgan Stanley had recently referred Phonepe emerging as a major factor for a handsome upstick in Walmart share-prices. However, this new capping may affect the company's valuation jump and fundraising plans as it seeks $1 billion from Tiger Global, Tencent, DST Global, Softbank and others.
 
A senior banker said on anonymity, "This exhibits NPCI's raising concerns over the increasing security threats by non-banking payment companies. Phonepe will have to re-visit its business strategy for a possible fundraise at this stage."
 
Other industry veterans and experts have applauded NPCI's move and are of the opinion that this will secure the digital payments infrastructure in India.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Arumugaraja A

    2 months ago

    How can you control market share in percentage? Doesn\'t it keep changing?
    You can limit transaction count or amount through that app.

    Ramesh Poapt

    2 months ago

    right step!!

    Chandragupta Acharya

    2 months ago

    What is their current market share?

    SBI Cuts Interest Rates on Loans by 10 bps and Term Deposits by 25 bps
    Country's largest lender State Bank of India (SBI) on Monday announced a reduction in its marginal cost-based lending rate (MCLR) by 10 basis points (bps) across all tenors. At the same time, SBI also lowered interest rates on fixed term deposits across all maturities by up to 25 basis points.
     
    The one year MCLR based lending rate will come down to 8.15% after the rate cut.
     
    The move is the fifth consecutive reduction in MCLR by the lender so far this financial year.
     
    In view of the falling interest rate scenario and surplus liquidity, SBI says it also realigned its interest rate on term deposits (TD) from 10 September 2019. SBI has slashed retail TD rates by 20-25 bps and bulk TD rates by 10-20 bps across tenors.
     
    The cut in interest rates comes on the back of the Reserve Bank of India (RBI)'s 1.1 percentage point reduction in the repo rate - the key interest rate at which it lends short-term funds to commercial banks - so far this year.
     
    The new rates are effective from 10 September 2019.
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    Oriental Bank reveals loan exposure to Nirav Modi, Choksi
    For the first time, the public sector Oriental Bank of Commerce (OBC) has come clean on its loan exposure to the absconding diamantaires Nirav Modi and his uncle Mehul C. Choksi, here on Friday.
     
    The development comes ahead of the OBC's upcoming merger with the Punjab National Bank (PNB) which - in February 2018 - had admitted to a massive fraud perpetrated by Nirav Modi and Choksi running into over Rs 13,500 crore, sending the entire banking industry in a spin.
     
    The OBC has now issued notices declaring the duo and their companies as 'Willful Defaulters' for varying loan amounts, totaling to around Rs 289 crore, at their Large Corporate Branch, Cuffe Parade, Mumbai.
     
    Nirav Modi's companies Firestar International Pvt. Ltd. and Fire Star Diamond International Pvt. Ltd. failed to repay the OBC's loans of Rs 60.41 crore and Rs 32.25 crore, respectively.
     
    Similarly, Choksi's companies Gitanjali Gems Ltd. and Nakashatra World Ltd. have defaulted on OBC's loans worth a total of Rs 136.45 crore and Rs 59.53 crore, respectively.
     
    Days after the scam erupted in February 2018 and it dawned that Nirav Modi and Choksi, along with other accused family members, had sneaked out of the country, the OBC promptly declared their accounts as 'NPAs' on March 21, 2018.
     
    Furthermore, the OBC has warned the masses to desist from entering any kind of deals with the (aforementioned) and appealed to the people to provide information of assets of Nirav Modi-Choksi or their transactions to enable the bank recover the 'public money' due from them.
     
    Banking circles question why it took the OBC a long period nearly 18 months to cough out is exposure in the matter, and just before its proposed merger with the PNB, along with United Bank of India, announced last month by Finance Minister Nirmala Sitharaman.
     
    "Besides OBC, other banks also have exposure to Modi and Choksi, and their group companies. What prevents them all from coming together and take necessary legal action to recover their dues," banking expert and Maharashtra Trade Unions Joint Action Committee (TUJAC) Convenor Vishwas Utagi told IANS.
     
    Utagi said the other bigger questions are: what action has been taken against the departments and officers dealing in foreign exchange in Reserve Bank of India and other affected banks, how much of the outstandings from (Nirav Modi-Choksi and others) accused have been recovered so far and whether the details emerging now are aunder pressure' before the upcoming mergers.
     
    Incidentally, in March this year, the OBC had got a life-saving dosage of Rs 1,186 crore capital infusion and more is expected after the mergers are completed.
     
    Earlier this year, the State Bank of India (SBI) had first bared its chest on a Rs 405 crore outstanding loan from Choksi and his family members.
     
    The SBI's disclosure came barely two days after it became public that Choksi had surrendered his Indian citizenship in favour of the nationality of Antigua & Barbuda Islands, in West Indies.
     
    In March this year, a relaxed and well-dressed Nirav Modi was seen sauntering down a street in London, sparking off a furore in India after which he was arrested by the UK authorities.
     
    Currently, India is making all-out efforts for getting both the uncle-nephew extradited to India and face the laws here.
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    COMMENTS

    TIHARwale

    2 months ago

    Arundati did not get post retirement assignment not for nothing

    TIHARwale

    2 months ago

    OBC board members were under impression Nirav has the blessings of uncle Apna Mehul Bhai enjoys support of elder brother so Nirav may also get a bail out

    mahendra kumar

    2 months ago

    Well drafted press release.

    mahendra kumar

    2 months ago

    OBC used to be very prompt in reporting fraud in certain cases even when any anonymous complaint comes but what happens when such big things happens? The release shows their eagerness to take steps in a NPA account. It does not show keen ness to declare the fraud in time as other banks did. They did not inform when whole country knew about Nirav and Choksi. Good work.

    Bidyasing Engti

    2 months ago

    Please give me loan
    In your company thanks,

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