Fintechs are reviving unsecured lending through the default loss guarantee (DLG) model, where they cover initial loan defaults to reassure lenders. Regulatory crackdowns had slowed this segment, but fintech lenders now dominate, accounting for 76% of personal loan sanctions by volume in H1 FY25, though banks still hold 61% of total loan value. The average fintech loan size is ₹9,200, catering to first-time borrowers, while banks average ₹4.4 lakh per loan.
SEBI is finalizing a Standard Operating Procedure (SoP) for settlement cases to ensure uniformity and transparency. The new framework aims to reduce discretion, enhance predictability, and expedite case resolution. Currently, 45% of enforcement orders are settled, up from 10% five years ago. SEBI plans to increase case disposal to 60 per month to match rising inflows. The move is expected to streamline settlements and ease regulatory burden.
SEBI plans to increase penalties on algorithmic and high-frequency traders for excessive order-to-trade ratios (OTR) to curb market manipulation. Penalties across slabs may rise significantly, with the highest category (OTR 2000+) facing a tripled penalty from 25 paise to 75 paise per order. The OTR computation method will also be refined to exclude certain low-priced contracts and use theoretical prices for non-traded contracts. The move aims to reduce speculation and manipulation in the F&O market.
The government has set up an inter-ministerial committee with regulators, fintech founders, and ministry representatives to address regulatory challenges in fintech. The panel will analyze industry growth, challenges, and policies, submitting a report within three months. This comes amid slowed startup funding and increased regulatory scrutiny in digital payments, lending, and stockbroking.
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