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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
Editor's note: The Reserve Bank of India last week published a list of applicants for the coveted universal banking licence. The line-up is, shall we say, somewhat less than stellar, hinting at a poor response to RBI’s “on-tap licensing” process for full-fledged banks, announced with great fanfare back in August 2016. The star of the show is Chaitanya India Fin Credit, which effectively represents a bid by Flipkart co-founder and billionaire Sachin Bansal. Bansal’s Navi, a venture aimed at building a digital-first bank and financial services business, controls Chaitanya, a 12-year-old Bengaluru-based microfinance institution. The other applicants: - UAE Exchange and Financial Services: The Indian arm of the UAE-based forex company—part of the Finablr group run by the scandal-plagued businessman B.R. Shetty—is a licensed non-banking financial company (or NBFC). The Indian entity was renamed Unimoni in 2018, though the RBI release mentions only the old name. - Repco Bank: A state-owned cooperative bank based in Chennai, initially set up to help citizens repatriated from Myanmar and Sri Lanka. It has housing finance and microfinance subsidiaries. - …
The central bank’s shift to a 100% collateral requirement threatens to erode leverage, reduce volumes and force a consolidation across prop desks.
High returns, RBI-regulated comfort, and easy withdrawals drew investors in. Now, with repayments drying up, the fintech platform, its NBFC partner, and the regulator are pointing fingers—leaving customers to chase their own money.
The RBI’s unusually harsh order raises deeper questions about management credibility—and whether investors should take assurances at face value.
