Following the Paytm Payments Bank incident, the Reserve Bank of India (RBI) is enforcing stricter KYC (Know Your Customer) compliance for accounts purchased by asset reconstruction companies (ARCs) from banks and non-banking finance companies.
This additional requirement burdens ARCs, leading to industry requests for clarity and exemption for accounts lacking KYC compliance. Despite reminders, gaps in KYC were a significant factor in the Paytm issue. The industry argues that compliance levels for ARCs should be proportional, given they don’t lend or accept deposits like other regulated entities
The Managing Director and CEO of Paytm Payments Bank, Surinder Chawla, has resigned citing personal reasons, to be relieved on June 26. Meanwhile, nearly all agreements between One 97 Communications and Paytm Payments Bank have been terminated, and the bank’s board has been reconstituted with five independent directors.
Paytm continues to collaborate with banking partners for merchant acquiring and UPI services. Previously, Vijay Shekhar Sharma resigned from the board, and regulatory actions led to restrictions on PPBL, prompting Paytm to transition to a multi-bank model for UPI services.
ICICI Lombard General Insurance Company Ltd. has partnered with Policybazaar, aiming to provide insurance solutions to Indian consumers. This collaboration grants access to nearly 10 million customers and covers various insurance products such as motor, health, travel, home, and business insurance.
Indian equity capital markets (ECM) have seen a remarkable start in January-March 2024, with fund-raising hitting $14.6 billion, up 161.9% from the previous year, according to LSEG Deals Intelligence. Elaine Tan, Senior Manager at LSEG, notes this as the highest-ever first-quarter total. With strong economic growth and a healthy IPO pipeline, India’s primary equity markets are expected to stay busy throughout the year.
IPOs from Indian issuers skyrocketed, raising $2.3 billion, while follow-on offerings, which accounted for 84% of ECM proceeds, raised $12.3 billion. Citi leads in ECM underwriting, while Axis Bank dominates bond underwriting. Investment banking fees have seen fluctuations, with ECM underwriting fees reaching the highest first-quarter total ever. Jefferies leads in overall investment banking fees in India.