RBI deputy governor M Rajeshwar Rao has warned about the problematic practice of “dark patterns” in the mis-selling of digital loans. Dark patterns involve deceptive designs that trick users into taking out high-cost, short-term loans. Rao also noted the increasing threat of technology-induced frauds like fraudulent apps and privacy breaches. The RBI will re-examine banks’ risk management frameworks for liquidity and market risk. While praising fintech innovation, Rao stressed the need to bolster consumer protection regulations as unsecured personal loans drive higher default rates. Surplus liquidity has caused deposit rates to rise slower than lending rates following the RBI’s repo rate hikes. Rao highlighted the importance of protecting customer trust in the evolving digital banking environment.
Credit card spending in India rose to an all-time high of Rs 1.8 trillion in October, up 38.3% from the previous year. Spend per card also increased 16% year-on-year to a record Rs 18,898. Approximately 65% of credit card transactions now occur online, where ticket sizes tend to be higher than average. Online transactions grew 39% in volume and 55.1% in value last month. HDFC Bank and SBI Card saw credit card spending increase 20.3% and 52% respectively. Axis Bank witnessed the strongest annual growth of 92%. Wider adoption of credit cards on UPI is expected to further boost overall credit card usage going forward.
Major political parties in India are increasingly courting social media influencers to help reach rural voters ahead of important state and national elections. Influencers are creating sponsored content on platforms like Instagram, YouTube and Facebook without explicitly stating it is advertising. This allows politicians to dodge scrutiny and shape public narratives. Influencers are paid based on how many views their posts get, with some earning up to $100 per post. Their localized content is very effective at spreading political messages in India’s remote areas. However, this covert political influence raises legal issues and concerns about election integrity. The 2024 national election will likely see further battles online as social media becomes a major front for influencing the democratic process.
The United States has agreed to invest $553 million in an Adani Group port project in Colombo, Sri Lanka, through the U.S. International Development Finance Corp. This move is part of countering China’s Belt and Road Initiative in the Indo-Pacific region. Adani, a prominent figure in India, is seen as a valuable partner due to his ties with the Indian government.
Despite facing allegations of fraud earlier in the year, the Adani Group has been resilient, securing significant refinancing and making substantial investments. The company’s focus on clean energy, with large investments in green hydrogen and partnerships with international firms, has been a notable success. Despite initial setbacks from the fraud allegations, the group’s stock prices have rebounded, showing signs of recovery.
Nasdaq’s latest listings intend to facilitate zero-day trading by adding contracts expiring on Wednesdays alongside existing Friday expirations, aiming to lower costs for investors. Plans include further additions of contracts expiring on different weekdays based on their popularity.
The surge in zero-day options, constituting over 50% of overall S&P 500 options volume in August, has sparked debate regarding its impact on market volatility. Nasdaq and market experts argue that it caters to diverse investor needs and contains manageable risks due to a robust and liquid market environment.