RBI Asks Banks To Go After Mule Accounts, Money Laundering

Reserve Bank of India Governor Shaktikanta Das held meetings with the heads of public sector banks and select private sector banks in Mumbai and urged them to step up their efforts against mule accounts, moneycontrol.com reported. 

Das asked them to intensify customer awareness and educational initiatives, among other measures, to curb digital fraud. A mule account is created by one person but operated by another person. These accounts are often used for money laundering and tax evasion. Mule accounts are in violation of several rules and can be prosecuted under the Prevention of Money Laundering Act. Also, such arrangements are illegal under tax laws. Even SEBI and Reserve Bank of India rules say such accounts should not be used. Read more 

Rs 44,000 Crore Push For Electronics And Semiconductor Products In The Offing 

A Ministry of Electronics and Information Technology (Meity) task force report is due to submit its recommendations, which include an allocation of Rs 44,000 crore from 2024 to 2030 to support homegrown electronic and semiconductor companies, the Business Standard reported. 

The task force's recommendations include significant incentives: Rs 15,000 crore dedicated to electronic products (systems), Rs 11,000 crore for semiconductor products, and Rs 18,000 crore for various other incentives such as talent development, common infrastructure, logistics, and technology & IP (intellectual property) acquisition, a member of the panel revealed. When and if the recommendations get government approval, the allocation would be comparable in scale to the PLI scheme for mobile devices and electronics. More here 

Budget May Extend NPA Classification Period For MSMEs

The Centre is contemplating an extension of the non-performing assets (NPA) classification period for loans to micro, small, and medium enterprises (MSMEs) from the current 90 days to 180 days in the forthcoming Budget, the Business Standard reported quoting a senior government official.

MSMEs are crucial to job creation in India, contributing around 29 per cent to the country’s gross value added and approximately 45 per cent to its exports. However, they often face challenges in receiving timely payments, leading to loan repayment defaults. The government has mandated a 45-day payment cycle for goods and services purchased from SMEs starting April 2024, which might see further adjustments due to complaints from various quarters. More here

Your Bank Transaction SMS Is Caught Between TRAI And RBI Diktats

Banks are in a fix over the latest regulation from the Telecom Regulatory Authority of India (TRAI) that mandates digital consent for sending commercial communication, the Economic Times reported. 

They have reached out to the government, seeking clarity on whether consent is needed even for sharing transaction details, a practice currently followed as per Reserve Bank of India guidelines, officials told ET. The move comes after last month's finance ministry directive asking banks to take necessary steps to onboard the Digital Consent Acquisition) system and follow TRAI guidelines, which aim to curb the menace of spam through unsolicited commercial communications.  More here 

Fintech Startups Brace For SEBI Circular’s Impact On Stockbroker Fee

The Securities and Exchange Board of India’s (SEBI) July 1 circular to move away from slab-based pricing for stockbrokers is set to affect the revenue pools of stockbrokers and could eventually impact valuations of fintech startups operating in this space, the Economic Times reported. 

SEBI asked brokers to charge their customers only the amount they have to pass on to the exchanges and not seek any rebate based on trade volumes. Firms like Shoonya and Mstock which promote zero-fee brokerage models could see major disruptions as a result of this. Venture fund-backed startups like Groww, Upstox, Zerodha and listed discount broker Angel One might have to start charging customers to adjust with the norms set to kick in from October 1, 2024. More here

ONDC Onboards Banks, Fintechs For Loans, Credit Services

Government-backed nonprofit Open Network for Digital Commerce (ONDC) is set to integrate banks such as HDFC Bank, IDFC First Bank and Karnataka Bank, alongside fintech firms like Fibe, in the coming months, the Economic Times reported. 

Participating banks will offer unsecured personal loans and goods and services tax-based invoice loans, targeting small merchants and retailers in financially underserved regions across the country, officials said. It comes at a time when ONDC has started conducting early pilots for credit disbursals by integrating Tata Group super app Tata Neu and credit marketplace Paisabazaar to source customers and lenders, such as DMI Finance and Aditya Birla Finance, to provide loans. More here