/
•
•
Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
The central bank is worried about banks not doing enough to boost their market share vis-a-vis fintechs, but there is little incentive for private sector lenders to up their UPI game.
Editor's note: Reserve Bank of India deputy governor T. Rabi Sankar recently said at a conference hosted by the Indian Banks’ Association that banks have conceded the Unified Payments Interface market to a handful of fintech firms. “How is it that a system of transactions between two bank accounts has evolved in a way that most businesses are owned by non-banks? Clearly, banks have missed a step here.” The Times of India quoted Sankar as saying. “Probably the feeling that small-value transactions are an insignificant business to put your resources into.” Interestingly, his comments came soon after the National Payments Corporation of India, or NPCI, extended the deadline for third-party apps to limit the market share of their UPI transactions to 30% of the total volume to December 2024. Sankar’s remarks elicited immediate responses from the industry, most notably from two banking and fintech veterans. Amrish Rau, chief executive of Pine Labs, tweeted: “It’s fashionable to beat up Banks. Fintechs (combined) would have invested north of 5Bn to drive UPI acceptance and issuance. Most banks are public[ly] listed and don’t have the …
Aggressive expansion, continued dependence on its parent for business, and an adverse shift in the product mix weigh on profitability as well as investor sentiment.
The central bank’s shift to a 100% collateral requirement threatens to erode leverage, reduce volumes and force a consolidation across prop desks.
While the payments company saw its first full year of profitability in FY26, the real progress will depend on whether it can continue to prove that it’s more than a POS company.
