BANKING LAWS AND NI ACT

INSTITUTE FOR TECHNOLOGY AND MANAGEMENT, RAIPUR

SCHOOL OF LAW

ACADEMIC YEAR 2024-25

BANKING LAW AND NEGOTIABLE INSTRUMENT ACT

PROJECT ON TOPIC:

“RECENT TRENDS IN THE INDIAN BANKING SECTOR”

DATE OF SUBMISSION: 21 OCTOBER, 2024

SUBMITTED BY: SUBMITTED TO:

SAKSHI JHANWAR
ENROLMENT NO. K0633
ROLL NO. 1306500222044

______________________ ____________________

SIGNATURE SIGNATURE

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TABLE OF CONTENT

1. INTRODUCTION
1.1 Definition of Banking Sector
1.2 Importance of the Banking Sector in India
1.3 Objective of the Project

2. Overview of the Indian Banking Sector

2.1 Historical Background
2.2 Current Structure

3. Recent Trends in the Banking Sector

3.1 Digital Transformation in Banking

 Rise of FinTech Companies

 Unified Payments Interface (UPI)
 Internet and Mobile Banking
 Blockchain and Cryptocurrency in Banking
 Artificial Intelligence (AI) & Machine Learning (ML)

3.2 Government Reforms and Initiatives

 Pradhan Mantri Jan Dhan Yojana (PMJDY)

 Insolvency and Bankruptcy Code (IBC)
 Bank Mergers & Consolidation
 Privatization of Public Sector Banks
 Digital Rupee and Central Bank Digital Currency (CBDC)

3.3 Regulatory Changes and Compliance

 Basel III Norms

 RBI’s Role in Digital Banking Regulations
 Cybersecurity Framework

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3.4 Emerging Business Models

 Neobanks
 Buy Now, Pay Later (BNPL) Services
 Embedded Finance

4. Impact of COVID-19 on the Banking Sector

4.1 Shift Towards Contactless Payments
4.2 Loan Restructuring and Moratoriums
4.3 Rise in NPAs

5. Challenges and Risks

5.1 Rising NPAs
5.2 Cybersecurity Threats

6. Future Outlook of Banking in India

6.1 Role of AI and Automation
6.2 Open Banking
6.3 Adoption of 5G
6.4 Impact of Global Trends

7. Case Studies
7.1 Examples of Successful Digital Transformations
7.2 FinTech-Bank Collaborations

8. Conclusion

9. References/Bibliography

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ACKNOWLEDGE

I would like to express my sincere gratitude to everyone who contributed to the successful
completion of this project on "Recent Trends in the Indian Banking Sector."

First and foremost, I extend my deepest appreciation to Mr Amber Singh, for their invaluable
guidance, encouragement, and support throughout this project. Their insights and expertise
have been instrumental in shaping the direction of this research.

I would also like to thank my institution, ITM University, for providing the necessary
resources and a conducive environment for conducting this study. The availability of relevant
literature, access to research tools, and library and administrative staff support have greatly
facilitated my work.

A special thanks to my family and friends for their continuous encouragement and patience
during the course of this project. Their unwavering support has been a constant source of
motivation.

Finally, I am grateful to the authors of the books, articles, reports, and online resources
referenced in this project. Their contributions to the banking field have greatly enriched my
understanding of the subject.

Thank you all.

Sakshi Jhanwar

21 October, 2024

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CASE STUDIES AND LEGISLATION

Case studies: -

1. HDFC Bank’s Digital Transformation

2. State Bank of India (SBI) and the Launch of YONO App
3. PhonePe and YES Bank Collaboration
4. Bank Mergers: Punjab National Bank (PNB), Oriental Bank of Commerce (OBC),
and United Bank of India Merger
5. ICICI Bank's Blockchain-Based Trade Finance Solution
6. Kotak Mahindra Bank’s Adoption of Neobanking
7. Axis Bank’s Green Bonds for Sustainable Projects

Legislation: -

1. The Banking Regulation Act, 1949

2. Reserve Bank of India Act, 1934
3. The Companies Act, 2013
4. The Insolvency and Bankruptcy Code (IBC), 2016
5. The Payment and Settlement Systems Act, 2007
6. The Information Technology Act, 2000 (and Amendments)
7. The Prevention of Money Laundering Act (PMLA), 2002
8. The Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest (SARFAESI) Act, 2002
9. The Pradhan Mantri Jan Dhan Yojana (PMJDY) Scheme, 2014
10. The Small Finance Banks (SFBs) and Payments Banks Guidelines, 2014
11. Basel III Norms

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1. INTRODUCTION

1.1 Definition of Banking Sector:

India's banking system is well-established and has been meeting the country's credit and
banking demands for many years. It developed over several decades. In addition to meeting
the unique and varied financial needs of various clients and borrowers, the banking
ecosystem is boosting the nation's economic growth and development.

Banks' primary responsibility is to act as a middleman between depositors and lenders,

transferring resources for both parties' advantage and distributing them in an efficient
manner. By improving resource consumption efficiency, banks can promote economic
growth.

In India, there are currently 137 scheduled commercial banks. offering banking services.
Additionally, local area banks and cooperative banks offer financial services in a variety of
markets around the nation. About 9,516 Non-Banking Financial Companies and 5 All India
Financial Institutions are also meeting the needs of the borrowers in order to lend to
particular sectors/segments.

Over time, the country's habited mapped villages, which comprise 99.97% of the total, have
been covered by the ease of access to financial services reinforced by the requirement that
every village have a minimum of one banking outlet, branch, or business correspondent
within a 5-kilometer radius.

Scheduled commercial banks are those that are included on the Second Schedule of the
Reserve Bank of India Act, 1934. The RBI issues banking licenses to all other scheduled
commercial banks in accordance with the Banking Regulation Act of 1949, with the
exception of public sector banks and regional rural banks. Additionally, in accordance with
the Banking Regulation Act of 1949, the RBI licenses cooperative banks to offer banking
services.

Foreign Direct Investment (FDI) in private sector banks is allowed in the banking industry up
to 49% automatically and up to 74% with government approval. Up to 20% of foreign direct
investment (FDI) is allowed in public sector banks with government clearance.

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The RBI, commercial banks, cooperative banks, and development banks—development

finance institutions—make up India's banking sector. These organizations serve as the center
of India's financial industry by acting as a gathering place for investors and savers. Banks are
crucial to the development of developing nations because they facilitate the mobilization of
resources and their more effective allocation.

Scheduled banks are those that fall under the second schedule of the Reserve Bank of India
Act of 1934.

Every scheduled bank is provided with the following amenities:

 Such a bank is then qualified to receive bank-rate debts and loans from the RBI.
 This type of bank instantly becomes a clearing house member.

Non-scheduled Banks are any banks that are not listed in the Reserve Bank of India Act,
1934's second provision. With the exception of emergencies, they are not permitted to borrow
money from the RBI for regular banking needs.

Commerce banks

Banks that accept deposits from the general public and lend money for profit are known as
commercial banks. Public, private, foreign, sector, and RRB (Regional Rural Banks) banks
are the several categories of commercial banks. The majority of Public Sector Banks are
owned by the government. There are currently 12 public sector banks in India as a result of
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recent mergers between smaller and larger banks. One such is the State Bank of India. Private
sector banks are owned by private investors. India's private sector banks include ICICI,
HDFC, Kotak Mahindra, and others. A private company with its main office located outside
the nation is known as a foreign bank. The rules set forth by the parent organization and the
nation's central bank must be adhered to by the Indian Banking System. Citibank is a
multinational bank based in India.

Cooperative institutions

A financial institution owned and operated by its members is called a cooperative bank. Their
financial and banking services are available to you. Cooperative banks are essential to self-
employment, small businesses, and agriculture.Mehsana Urban Co-operative Bank Ltd., for
instance. A credit cooperative is established by one person. Borrowers and non-borrowers
with a shared interest in business issues make up the organization. All inhabitants are eligible
to join, bringing together individuals with different backgrounds. The societies within an area
establish a Central Cooperative Bank. Cooperative banks in rural and urban areas are
separated. They could be long or short. State cooperative banks and agri-credit cooperatives
are two such. Primary Cooperative Agriculture and Rural Development Banks, or PCARDBs,
are long-term banks. The cooperative central banks found in cities and suburbs are known as
Urban Co-operative Banks, or UCBCs.

Development Banks

Development Bank funding initiatives requiring a lot of investment but offering significant
social advantages at minimal return. These consist of the National Bank for Rural
Development (1982), the Export-Import Bank of India (1982), and the Small Industries
Development Bank of India (1989). The financial system of a nation can have a big impact
on how far its economy goes. Funding small enterprises also contributes to the prosperity of
suburban and rural regions. Commercial banks, primary agricultural credit societies (PACS),
urban cooperative banks, and regional rural banks make up the structured financial system. In
India, government measures and the Reserve Bank have made official financial institutions
more accessible.

1.2 significance of the Banking Sector in India

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Banks play a vital part in the profitable development of a nation by acting as interposers
between saviours and borrowers, enabling fiscal deals, furnishing credit, and supporting
investments. In India, banks have been central to promoting profitable growth, fiscal addition,
and socio-profitable development, especially in a different and fleetly growing frugality.
Then is an in-depth look at these places

1. part in Economic Growth

Banks are crucial motorists of profitable growth, easing the effective allocation of fiscal
coffers and icing liquidity within the frugality. Some of the ways banks contribute to
profitable growth include

i) Banks encourage savings by offering secure and accessible avenues like savings accounts,
fixed deposits, and other interest-bearing accounts. By pooling these savings, banks can turn
them into productive investments, prodding growth in colourful sectors like manufacturing,
structure, and services.

ii) Credit creation is one of the primary functions of banks. They give loans and advances to
individualities, businesses, and governments, fueling consumption and investment. These
loans support business expansion, entrepreneurship, structure systems, and invention, which
are pivotal for overall profitable development. exemplifications include advancing to
businesses for expansion, furnishing casing loans, and backing structure systems like roads,
islands, and airfields.

iii) Banks give sector-specific loans and fiscal products to support diligence like husbandry,
small and medium enterprises (SMEs), and structure development, all of which are pivotal
for India's profitable stability and growth. Specialized credit schemes, similar as precedence
sector lending, ensure that sectors critical to the frugality admit the needed fiscal support.

iv) Banks are necessary in the perpetration of the Reserve Bank of India’s ( RBI) financial
programs, which aim to control affectation, stabilize the currency, and regulate liquidity. By
conforming lending rates and credit force, banks contribute to controlling profitable
oscillations, therefore promoting sustainable growth.

2. part in fiscal

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In addition fiscal addition refers to furnishing access to fiscal services (banking, credit,
insurance) to all parts of society, especially the underserved and economically vulnerable
populations. Banks play a crucial part in advancing fiscal addition in India, with a focus on
bringing the unbanked population into the formal fiscal system. This is essential for reducing
poverty and promoting inclusive growth.

i) Banks give introductory banking services, similar as savings accounts, payment systems,
and remittances, to underserved populations. enterprise like the Pradhan Mantri Jan Dhan
Yojana (PMJDY) have been pivotal in extending banking services to millions of low-income
homes, especially in pastoral and semi-urban areas.

ii) Banks, along with Small Finance Banks and Regional Rural Banks (RRBs), offer
microfinance services that give small loans to entrepreneurs, growers, and small businesses.
This helps in empowering economically weaker sections by giving them the fiscal tools to
start or expand their gambles. Microloans and tone-help groups (SHGs) are also extensively
supported by collaborative banks, perfecting the income situations of marginalized
communities.

iii) The rise of digital banking and enterprise like Unified Payments Interface(UPI), mobile
banking, and payments banks has revolutionized fiscal addition by making banking services
more accessible, indeed in remote areas. Digital fiscal services reduce sale costs and
ameliorate the effectiveness of fiscal deals, thereby promoting fiscal addition at scale. iv)
Banks are also necessary in outlaying government subventions and benefits through schemes
like Direct Benefit Transfer( DBT), icing that government weal programs reach their willed
heirs directly, without leakages.

3. part in Socio- Economic

Development Banks contribute significantly to socio- profitable development by supporting

not only profitable conditioning but also the social fabric of society. Their capability to give
fiscal support for education, healthcare, and structure development contributes to bettered
living norms and overall weal. i) By furnishing credit to small and medium
enterprises( SMEs), startups, and tone- employed individualities, banks stimulate job creation
and encourage entrepreneurship. In India, banks have partnered with the government to offer
schemes like MUDRA loans, which help micro and small businesses pierce much- demanded

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capital. Special schemes and low- interest loans are offered to promote skill development and
tone- employment, leading to sustainable livelihoods in both pastoral and civic areas.

ii) Banks finance large structure systems similar as roads, islands, seminaries, hospitals, and
casing. structure development is pivotal for perfecting the quality of life, easing trade, and
connecting regions, which eventually boosts socio- profitable progress. Long- term backing
through design loans and bonds helps in erecting public means and contemporizing public
services, therefore driving profitable and social growth.

iii) Banks contribute to social weal by furnishing loans for affordable casing and education,
allowing low- and middle- income families to enjoy homes and pursue advanced education.
casing loans boost the real estate sector, while education loans increase access to quality
education, creating a more professed pool.

iv) Banks, especially Regional Rural Banks (RRBs) and Cooperative Banks, concentrate on
lending to the agrarian sector, which supports growers and helps pastoral communities grow.
This includes loans for seeds, outfit, irrigation, and crop insurance. Supporting husbandry is
vital in a country like India, where a large portion of the population relies on husbandry for
their livelihood. Banks also give backing for pastoral development programs that aim to
ameliorate structure, healthcare, and education in pastoral areas.

v) Banks are decreasingly fastening on fiscal knowledge programs to educate people about
managing their finances, penetrating banking services, and avoiding fraudulent practices.
This ensures that individualities, especially those from marginalised groups, can make
informed fiscal opinions, contributing to socio- profitable progress

1.3 Ideal of the Project

The crucial objects are as follows

1) Identify Arising Trends

2) estimate the Impact of Government enterprise and Regulatory Changes

3) Study the part of Digitalization and Technology in Banking

4) dissect the Challenges and pitfalls Facing the Sector

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5) Examine the part of Banks in fiscal Addition and Socio- Economic Development

6) Forecast Future Trends

2. OVERVIEW OF THE INDIAN BANKING SECTOR

2.1 Historical Background

The history of banking in India predates the country's 1947 independence and is a pivotal
subject for questions on colorful government examinations. We'll go into great detail on the
development of the Indian banking assiduity in this essay.

There are three stages to the elaboration of the banking assiduity

Phase I The First Phase, which began in 1770 and ended in 1969.

Phase II From 1969 until 1991, there was a nationalisation phase.

Phase III The phase of banking sector reforms, frequently known as liberalisation, started in
1991 and is still going strong moment.

Pre Independence Period( 1786- 1947)

The" Bank of Hindustan," which was innovated in 1770 and was grounded in Calcutta, the
country's capital at the time, was India's first bank. nonetheless, this bank was unfit to
succeed and shut down in 1832. Only a small number of the further than 600 banks that were
registered in the nation previous to independence were suitable to endure. Following the path
of Bank of Hindustan, colorful other banks were established in India. They were

• The General Bank of India( 1786- 1791)

• Oudh Commercial Bank( 1881- 1958)

• Bank of Bengal( 1809)

• Bank of Bombay( 1840)

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• Bank of Madras( 1843)

The East India Company innovated three banks known as the Presidential Banks the Bank of
Bengal, the Bank of Bombay, and the Bank of Madras. These banks were formed during
British administration in India.

In 1921, these three banks composite to form the" Imperial Bank of India," a single
institution. latterly, in 1955, the Imperial Bank of India was nationalised and renamed The
State Bank of India, which is the biggest public sector bank at the moment. When agitating
the causes of the demise of multitudinous large banks in the times leading up to
independence, the following conclusions might be made

• Indian guests have come more vulnerable to fraud.

• Absence of technology and ministry

• Man-made miscalculations and time- consuming

• Reduced number of installations

• shy directorial capacities

Post Independence Period( 1947- 1991)

All of India's major banks were intimately run when the nation gained its independence,
which raised enterprises because pastoral residers still reckoned on moneylenders for fiscal
support. The government of the time made the decision to nationalise the banks in an trouble
to address this issue.

The Banking Regulation Act of 1949 led to the nationalisation of these institutions. In
discrepancy, the Indian Reserve Bank was nationalised in 1949. Aspirants can review the list
of Acts and Reforms in the Banking Sector in the linked composition.

Later, the State Bank of India was established in 1955, and between 1969 and 1991, the
remaining 14 banks were nationalised. These were the banks with over 50 crores in public
deposits.

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Given below is the list of these 14 Banks nationalised in 1969

1. Allahabad Bank

2. Bank of India

3. Bank of Baroda

4. Bank of Maharashtra

5. Central Bank of India

6. Canara Bank

7. Dena Bank

8. Indian Overseas Bank

9. Indian Bank

10. Punjab National Bank

11. Syndicate Bank

12. Union Bank of India

13. United Bank

14. UCO Bank

In the time 1980, another 6 banks were nationalised, taking the number to 20 banks. These
banks included

1. Andhra Bank

2. Corporation Bank

3. New Bank of India

4. Oriental Bank of Comm.

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5. Punjab & Sind Bank

6. Vijaya Bank

Piecemeal from the below-mentioned 20 banks, there were seven accessories of SBI which
were nationalised in 1959.

1.State Bank of Patiala

2. State Bank of Hyderabad

3. State Bank of Bikaner & Jaipur

4. State Bank of Mysore

5. State Bank of Travancore

6. State Bank of Saurashtra

7. State Bank of Indore

Except for the State Bank of Saurashtra, which intermingled in 2008, and the State Bank of
Indore, which intermingled in 2010, all of these banks latterly composite with the State Bank
of India in 2017.

Liberalisation Period (1991-Till Date)

Following the establishment of banks in the nation, rules and regular oversight are needed to
sustain the gains generated by the banking assiduity. The final or continuing stage of the
growth of the banking assiduity is extremely important.
In an trouble to give the Nationalised Public Sector Banks stability and profitability, the
Government established a commission headed by Shri. M. Narasimham to oversee the
banking assiduity's multitudinous reforms.
The establishment of private sector banks in India was the largest change. Ten private sector
banks were granted authorization by RBI to open for business in the nation. Among these
banks were
1. Global Trust Bank
2. ICICI Bank

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3. HDFC Bank
4. Axis Bank
5. Bank of Punjab
6. IndusInd Bank
7. Centurion Bank
8. IDBI Bank
9. Times Bank
10. Development Credit Bank

The fresh conduct made correspond of

• opening of multiple foreign banks' branches in India
• Bank nationalisation could n't do again.
• The commission declared that the government and RBI'll handle banks in the public and
private sectors inversely.
• Any foreign bank could form hookups with banks in India.
• With advancements in technology and banking, payments banks were established, and small
finance banks were permitted to open branches throughout India.
• With the arrival of Internet banking and fund transfer apps, a significant portion of Indian
banking has shifted online.

Following the establishment of banks in the nation, rules and regular oversight are required to
sustain the profits generated by the banking industry. The final or continuing stage of the
growth of the banking industry is extremely important.
In an effort to give the Nationalised Public Sector Banks stability and profitability, the
Government established a committee headed by Shri. M. Narasimham to oversee the banking
industry's numerous reforms.

2.2 Current Structure of the Indian Banking Sector

The Indian banking sector is different, comprising colorful types of banks that feed to
different parts of the frugality. The Reserve Bank of India( RBI) regulates the banking
assiduity, which includes Public Sector Banks( PSBs), Private Sector Banks, Regional Rural
Banks( RRBs), Small Finance Banks( SFBs), and Payments Banks.

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Each order of bank plays a unique part in promoting fiscal addition, supporting profitable
development, and icing the smooth functioning of the fiscal system. Below is an overview of
the current structure and the main orders of banks in India
1. Public Sector Banks( PSBs)
Public Sector Banks( PSBs) are banks where the Government of India holds a maturity stake(
further than 50). These banks are a crucial part of India's banking structure, furnishing a wide
range of banking services and playing a significant part in fiscal addition.
• The largest banking institutions in India in terms of branch network and client base.
• Focus on serving pastoral andsemi-urban areas as well as promoting government weal
schemes. • exemplifications include State Bank of India( SBI), Punjab National Bank( PNB),
Bank of Baroda, Union Bank of India, and others.
• PSBs suffer periodic connection, similar as the 2019- 2020 junction of 10 PSBs into 4 larger
realities.
• PSBs are involved in precedence sector lending and apply government programs for fiscal
addition, similar as Pradhan Mantri Jan Dhan Yojana( PMJDY).
• They're also responsible for furnishing credit to critical sectors like husbandry, MSMEs, and
structure.

2. Private Sector Banks .

Private Sector Banks are banks in which private realities or individualities hold a maturity
stake. These banks are known for their client- centric services, use of technology, and
competitive fiscal products.
• Private banks are generally more technology- driven, offering innovative products like
mobile banking, internet banking, and substantiated wealth operation services.
• exemplifications include HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and
Yes Bank.
• These banks concentrate on civic andsemi-urban areas but have also started expanding into
pastoral requests.
• Private Sector Banks play a critical part in contemporizing the banking sector, introducing
digital banking results and enhancing client gests .
• They feed to a different client base, including commercial guests, retail guests, and high-
net- worth individualities( HNIs).
• They're also involved in commercial lending, retail loans( similar as home loans and
particular loans), and investment banking.
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3. Regional Rural Banks (RRBs)

Government-owned banks known as Regional Rural Banks (RRBs) were founded to offer
financial services to rural residents, with an emphasis on small companies, farmers, and
craftsmen. Usually, bigger public sector banks support them.
 RRBs are mainly found in rural areas, where they provide low-cost financing to small
businesses, the agriculture industry, and other rural pursuits.
 They are jointly owned by the Government of India (50%), the respective state
governments (15%), and a sponsoring Public Sector Bank (35%).1
 Aryavart Bank, Prathama UP Gramin Bank, and Karnataka Vikas Grameena Bank are
a few examples.
 By offering necessary banking services including savings accounts, loans for small
enterprises and farmers, and remittance services in rural areas, RRBs want to foster
financial inclusion.
 By providing microcredit and supporting agricultural operations, which are essential
to the livelihoods of millions of rural households in India, RRBs help improve rural
development.
 They concentrate on lending to the priority sector and carry out a range of government
welfare projects aimed at the rural economy.

4. Small Finance Banks (SFBs)

A new class of banks called Small Finance Banks (SFBs) was created by the RBI to promote
financial inclusion. SFBs offer standard banking services including deposit acceptance and
lending to marginalised groups like microenterprises, small business units, and marginal
farmers.
 SFBs are tasked with promoting financial inclusion for the less fortunate segments of
society.
 They possess the power to offer credit and savings services, such as taking deposits
and granting small loans.
 Ujjivan Small Finance Bank, AU Small Finance Bank, and Equitas Small Finance
Bank are a few examples of SFBs.

1
https://prsindia.org/billtrack/the-regional-rural-banks-amendment-bill-2014
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 Although they are permitted to carry out certain tasks that are comparable to those of
commercial banks, their primary objective is microfinance and catering to low-
income populations.
5. Payments Banks
With a restricted banking licence that only permits them to take deposits and not offer loans
or credit services, Payments Banks are a special kind of banks in India. These banks cater to
the underbanked and unbanked people and concentrate on digital transactions.

 Payments Banks can accept deposits up to ₹2 lakh per customer but are not allowed
to offer loans or issue credit cards.2
 They concentrate heavily on digital banking and mobile banking to give services like
plutocrat transfers, remittances, and bill payments.
 exemplifications include Airtel Payments Bank, Paytm Payments Bank, and India
Post Payments Bank.
 Payments Banks aim to reach guests in remote and pastoral areas where traditional
banks may have limited presence.
 Payments Banks play a pivotal part in expanding fiscal addition, particularly for
people who warrant access to formal banking channels. They offer low- cost,
accessible banking results to marginalized populations.
 They help grease digital payments and contribute to the cashless frugality by making
banking services available through mobile phones and digital platforms.
 Payments Banks also enable easier and quicker fund transfers, bill payments, and
government subvention disbursements, similar as through the Direct Benefit Transfer(
DBT) program.

2
https://www.drishtiias.com/to-the-points/paper3/payment-banks
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3. RECENT TRENDS IN THE BAMLING SECTOR

3.1 Digital Transformation in Banking

In recent times, the Indian banking industry has experienced a notable digital revolution
propelled by technological advancements, regulatory measures, and evolving consumer
inclinations. The development of FinTech businesses, the broad use of digital payment
systems like UPI, the expansion of online and mobile banking, and the incorporation of
technology like blockchain, artificial intelligence (AI), and machine learning (ML) are some
of the major forces behind this shift. The following are major developments in Indian
banking's digital transformation:

1. Rise of FinTech Companies: Collaboration and Competition with Banks

 FinTech companies in India are rapidly transforming the banking ecosystem by
offering innovative solutions in payments, lending, insurance, and wealth
management. The Indian FinTech market is estimated to reach a value of $150 billion
by 2025, with more than 2,100 FinTech firms operating across the country.3
 Although some conventional banks view FinTechs as rivals, cooperation is becoming
more and more common. In order to provide digital services, improve consumer
experiences, and take advantage of cutting-edge solutions like digital lending, robo-
advisory services, and blockchain-based payment systems, many banks collaborate
with FinTech companies. To increase its digital products, ICICI Bank, HDFC Bank,
and Axis Bank, for example, have all partnered strategically with FinTech startups.
 FinTech companies compete with traditional banks at the same time by providing
cheaper, quicker, and more effective services. Neo-banks, like Niyo and Jupiter,
directly compete with traditional banks by offering totally digital banking services
without the need for physical branches.
 Consumers are receiving more individualised banking services, greater financial
inclusion, and more innovation as a result of banks and FinTechs working together
and competing.

3
https://www.linearloop.io/blog/future-of-fintech-in-india
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2. Unified Payments Interface (UPI): Revolutionizing Payments in India

 The National Payments Corporation of India (NPCI) introduced the Unified Payments
Interface (UPI) in 2016, which is a real-time payment system that permits
instantaneous fund transfers between bank accounts using mobile devices. In India,
UPI has emerged as one of the most widely used digital payment solutions.
 As of 2023, UPI processes over 9 billion transactions per month, with a transaction
value of more than ₹14 trillion (USD 170 billion) per month. UPI's market share in
digital payments is more than 50%, making it a game-changer in the Indian payments
ecosystem.4
 UPI has made digital payments more accessible by offering a streamlined, affordable,
and user-friendly platform. Peer-to-peer (P2P) and peer-to-merchant (P2M)
transactions are made possible by the integration of numerous bank accounts into a
single mobile app, doing away with the requirement for credit or debit cards.
 Even in rural places, the growth of UPI has been fuelled by its highly accessible
features, such as interoperability, 24/7 availability, and QR code payments.
 Due of UPI's success, there has been talk about exporting this technology to other
nations on a global scale. For cross-border transactions, UPI is in discussions with
other international payment systems and is scheduled to work with Singapore's
PayNow.

3. Internet and Mobile Banking: Digital-First Banking Services

 Mobile banking has seen explosive growth in India due to the increasing penetration
of smartphones and internet connectivity. In FY2023, mobile banking recorded a 52%
year-on-year growth, with transaction values surpassing ₹200 trillion. 5 Banks are
increasingly focusing on mobile-first strategies, with apps like YONO (SBI) and
ICICI iMobile offering comprehensive banking services via smartphones.
 Conventional online banking has also developed, enabling customers to do financial
operations online, including loan applications, bill payments, and fund transfers. To
give their customers a safe and easy way to bank, the majority of Indian banks now

4
https://www.livemint.com/money/personal-finance/upi-the-world-s-favourite-payment-method-hits-964-
billion-in-record-time-digital-payments-credit-cards-11724997818372.html
5
https://currentaffairs.adda247.com/upi-transactions-surge-52-to-78-97-billion-in-h1-2024-report/
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provide personalised digital banking systems that can be accessed on desktops and
mobile devices.
 The banking industry as a whole is seeing an increasing trend towards digital-first
services. Online account management, paperless loan applications, and digital KYC
(Know Your Customer) procedures are increasingly commonplace services. Using
their Aadhaar and PAN credentials, individuals can open zero-balance, totally digital
accounts with Kotak 811 in a matter of minutes.
 The increased preference for digital-first experiences is shown in the adoption of
video banking for client interactions and the emergence of digital-only banks like
Paytm Payments Bank.

4. Blockchain and Cryptocurrency in Banking6

 Banks are investigating blockchain as a potential solution for safe, open, and
unchangeable transactions. Trade finance, smart contracts, and international payments
are among its applications. For international remittances, ICICI Bank and Axis Bank
have already begun testing with blockchain technology.
 Distributed ledger technology, or blockchain, is thought to offer a way to boost
transparency, speed up settlement, and increase transaction security. Blockchain
applications for banking have garnered interest from the Reserve Bank of India (RBI),
and considerable experimentation is being done in domains such as fraud prevention
and know-your-customer (KYC) compliance.
 Despite regulatory restrictions keeping cryptocurrencies out of India's banking system
just yet, interest in it is growing. The digital rupee, also known as the Central Bank
Digital Currency (CBDC), is currently being introduced by the RBI. This digital
money, which will be based on blockchain technology, will symbolise the
government's cautious approach to incorporating crypto assets while preserving
regulatory oversight.
 Private banks are investigating methods to use blockchain technology without
embracing cryptocurrencies, even if private cryptocurrencies like Bitcoin and
Ethereum are still being closely watched by regulators.

6
http://newagebankingsummit.com/europe/4-key-advantages-of-using-blockchain-in-banking/#:~:text=As
%20blockchain%20helps%20banks%20to,in%20documentation%20caused%20by%20duplication.
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 BANKING LAWS AND NI ACT

5. Artificial Intelligence (AI) & Machine Learning (ML): Enhancing Banking

Operations
 AI and ML algorithms are being used by Indian banks more frequently to track
transactions in real time and identify fraudulent activity. Systems driven by AI
examine transaction patterns and look for deviations that might point to fraud. AI is
used by SBI and HDFC Bank, for instance, in risk assessment and fraud detection.
AI-powered chatbots are quickly taking centre stage in the banking industry's
customer support operations. Financial institutions such as HDFC Bank's EVA, ICICI
Bank's iPal, and SBI's SIA offer 24/7 support to their clientele, addressing enquiries,
assisting with different services, and even enabling transactions.
 AI and ML are used to provide personalised banking services by analysing customer
data to offer tailored products, such as customised loan offers, investment advice, and
credit card recommendations.
 Chatbots provide immediate responses, lower operating costs, and enhance the overall
customer experience.
 Some banks and FinTech companies offer robo-advisory services, which utilise AI
and ML algorithms to provide automated financial advice and portfolio management.
Machine learning models analyse consumer behaviour and preferences to forecast
bank client preferences and develop personalised financial solutions. For investment
management, ICICI Bank and Kotak Mahindra Bank, for example, provide robo-
advisors, which let users obtain individualised advice at a reduced cost.

3.2 Government Reforms and Initiatives

The Indian government has undertaken a series of reforms and initiatives to modernize the
banking sector, improve financial stability, address the challenges posed by non-performing
assets (NPAs), and enhance financial inclusion. Some of the key reforms include the Pradhan
Mantri Jan Dhan Yojana (PMJDY) 7, the introduction of the Insolvency and Bankruptcy Code
(IBC)8, the consolidation of public sector banks, steps toward privatization, and the
exploration of a Central Bank Digital Currency (CBDC). Following are the initiatives and
their impact on the banking sector:

7
https://pmjdy.gov.in/scheme
8
https://ibbi.gov.in/legal-framework/act
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1. Pradhan Mantri Jan Dhan Yojana (PMJDY): Financial Inclusion through Basic
Banking
 The Pradhan Mantri Jan Dhan Yojana (PMJDY), a flagship initiative for financial
inclusion, was introduced in August 2014 with the goal of guaranteeing
underprivileged populations in rural and semi-urban areas access to basic banking
services. The program's main objectives are to open bank accounts with no balance,
give debit cards, and give participants access to credit, insurance, and pension
services.
 As of 2023, more than 500 million bank accounts have been opened under PMJDY,
with over ₹1.8 trillion deposited in these accounts.
 Around 55% of these accounts are held by women, and 67% of the accounts are in
rural or semi-urban areas, showcasing the scheme's role in promoting gender equality
and rural financial inclusion.
 Direct Benefit Transfers (DBT): The foundation of the government's DBT program is
now PMJDY accounts, which facilitate the easy distribution of welfare benefits and
subsidies to recipients. As a result, there is less corruption and leakage in government
assistance programs.
 Access to Credit and Insurance- PMJDY account holders also have access to micro-
credit and accidental insurance of up to ₹2 lakhs, contributing to financial security
and risk management for low-income households.9
 The scheme has played a significant role in boosting financial literacy, helping
millions of previously unbanked individuals access formal banking services.

2. Insolvency and Bankruptcy Code (IBC): Tackling Non-Performing Assets (NPAs)

 To improve and expedite the handling of insolvencies and non-performing assets
(NPAs) in the Indian banking industry, the Insolvency and Bankruptcy Code (IBC)
was implemented in 2016. It guarantees that the interests of creditors and debtors are
balanced and provide a time-bound procedure for resolving insolvency.
 The IBC has had a significant impact on improving the recovery of bad loans and
reducing the gross NPA ratio. As of March 2023, India’s gross NPA ratio stood at
3.2%, a marked improvement from the peak of 11.5% in 2018.10

9
https://pib.gov.in/PressReleasePage.aspx?PRID=2049231#:~:text=PMJDY%20provides%20one%20basic
%20bank,provided%20to%20promote%20digital%20transactions.
10
https://www.drishtiias.com/daily-updates/daily-news-analysis/banks-gross-npas-drop-to-3-2
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 Resolution Process: In order to settle insolvency proceedings, the IBC stipulates a

180-day resolution process that is renewable by an additional 90 days. This has
assisted banks in cleaning up their balance books and decreased delays in the recovery
of problematic loans.
 Significant Recoveries: Since the start of IBC, banks have been able to recover around
₹3 trillion. Prominent instances like as the Essar Steel and Bhushan Steel settlements
have illustrated how successful IBC is in enabling substantial recoveries for creditors.
 Despite the fact that IBC has increased recovery rates, difficulties still exist. The
settlement procedure can occasionally be delayed by pending cases and legal
obstacles. More capacity-building is also required within the legal system in order to
effectively manage the volume of insolvency cases.

3. Bank Mergers & Consolidation: Enhancing Efficiency and Stability

 In recent years, the Indian government has aggressively sought bank mergers and
consolidation, especially among Public Sector Banks (PSBs). The number of PSBs
decreased from 27 to 12 between 2017 and 2020 as a result of a move towards
consolidation intended to increase operational effectiveness and financial stability.
 The following significant mergers took place in 2020:
I. Punjab National Bank (PNB) was formed by the combination of Oriental Bank
of Commerce and United Bank of India.
II. Union Bank of India was formed by the merger of Andhra Bank and
Corporation Bank.
III. Canara Bank and Syndicate Bank together.
IV. Indian Bank combined with Allahabad Bank.

 The Effects of Bank Mergers:

I. Enhanced Capital Adequacy: As a result of mergers, the resulting businesses'
capital bases have grown stronger, assisting banks in meeting Basel III
requirements and raising their capital adequacy ratios.
II. Cost Efficiency: The process of consolidation has resulted in a rationalisation of
personnel and branches, which has improved economies of scale and decreased
operating costs.

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 BANKING LAWS AND NI ACT

III. Increased Competitiveness: Mergers have produced bigger, more competitive

organisations that are better suited to handle the demands of the global market and
offer a greater choice of services to clients.
IV. Difficulties: Even though mergers have increased operational efficiency, there are
also drawbacks to these business combinations, such as problems with integration,
cultural differences between the combined companies, and interruptions in client
services during the transition.

4. Privatization of Public Sector Banks: Government’s Push Towards Privatization

 The Indian government has signalled its intent to privatize some Public Sector Banks
(PSBs) as part of its broader disinvestment strategy. The Union Budget 2021-22
announced plans to privatize two public sector banks, although specific banks were
not named at the time.11
 Increasing Efficiency: According to the government, these banks will become more
profitable as a result of privatisation, as well as have better management and customer
service.
 Lessening the Fiscal Burden: To assist PSBs in addressing bad loans and capital
shortages, the Indian government spends a large sum recapitalising them. Privatisation
would lessen the requirement for these influxes of public funds.
 Fostering Competition: Increased competition in the banking industry is thought to
result from privatisation, and this could cut prices for financial products and improve
services for customers.
 Difficulties and Fears:
I. Opposition from Unions: Fearing job losses and diminished benefits, employee
unions have opposed privatisation. In order to proceed with its objectives, the
administration must take these concerns into consideration.
II. NPA Management: The valuation and sale of these institutions may be impacted
by the legacy problems that prospective buyers of privatised banks would have to
address, such as significant NPAs.

5. Digital Rupee and Central Bank Digital Currency (CBDC)

11
https://www.nextias.com/ca/editorial-analysis/31-08-2024/privatisation-of-banks-in-
india#:~:text=Privatisation%20Plans%20(2021):%20In,are%20yet%20to%20be%20finalised.
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 BANKING LAWS AND NI ACT

 The Reserve Bank of India (RBI) will launch the Central Bank Digital money
(CBDC), commonly referred to as the digital rupee. It is a blockchain-based digital
money. It is digitally issued legal money that functions similarly to actual cash
without the need for middlemen.
 The RBI has initiated a pilot project for the digital rupee in 2023, with plans to launch
it in phases. The digital currency will serve as an official medium of exchange,
coexisting with physical currency.12
 Advantages of CBDC:
I. Lower Transaction Costs: By doing away with middlemen in payment networks,
the digital rupee's implementation is anticipated to lower transaction costs.
II. Improved Financial Inclusion: In rural locations without actual bank branches,
CBDC may make banking services more accessible.
III. Payment System Efficiency: The digital rupee will enable real-time transaction
settlement, enhancing the system's efficiency, particularly for cross-border
transactions.
IV. Less Dependency on Cash: The digital rupee might cut expenses related to
printing, storing, and shipping physical money by offering a digital substitute for
cash.
 Difficulties:
I. Technological and Security Risks: To guard against fraud and guarantee the security
of digital assets, the implementation of CBDC will necessitate strong cybersecurity
measures.
II. Adoption and Usage: It may be difficult to raise public awareness of the advantages of
CBDC and to promote broad adoption, particularly in rural areas with low levels of
digital literacy.

3.3. Regulatory Changes and Compliance

Regulations pertaining to the banking industry in India are always changing with the
intention of improving stability, encouraging innovation, and guaranteeing adherence to
international standards. The financial system's rising complexity has led to changes in the

12
https://www.livemint.com/news/india/explained-what-is-digital-rupee-rbi-launches-first-pilot-project-today-
11667265156844.html
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 BANKING LAWS AND NI ACT

regulatory landscape, particularly with the emergence of digital banking and the increased
integration of technology into banking processes.

1. Basel III Norms13

 Basel III is a global regulatory framework developed by the Basel Committee on
Banking Supervision (BCBS), aimed at improving banks' capital adequacy, stress
testing, and overall risk management. The regulations were introduced after the 2008
global financial crisis to prevent the collapse of major financial institutions.
 In India, the Reserve Bank of India (RBI) has mandated that all banks adhere to Basel
III norms, with a phased implementation timeline. The full implementation of Basel
III is expected by 2024.
 Capital Adequacy Ratio (CAR): Banks are required to maintain a minimum capital
adequacy ratio of 10.5%, which includes a Capital Conservation Buffer (CCB) of
2.5% to absorb shocks during periods of financial stress.14
 Basel III introduced a minimum leverage ratio of 3%, which limits the extent to which
banks can borrow in relation to their capital base.15
 In order to maintain liquidity during periods of financial instability, banks must
maintain a sufficient level of high-quality liquid assets (HQLA) to cover net cash
outflows throughout a 30-day stress period.
 Indian banks' capital structures have greatly strengthened since Basel III went into
effect, particularly Public Sector Banks (PSBs), which have raised money through
market offerings and government infusions. This has improved their capacity to
withstand setbacks and maintain their financial stability in times of recession.
 These days, banks are more capable of handling risks, particularly those pertaining to
credit, markets, and operations. Additionally, they must have stronger internal risk
assessment systems.
 In order to comply with Basel III, banks had to raise more capital, which has proven
difficult for smaller and weaker banks in particular. Since banks must keep higher
levels of capital and liquidity reserves, which reduces their lending capability, the

13
https://www.delphix.com/glossary/basel-iii#:~:text=The%20Basel%20III%20accord%20increased,order%20to
%20be%20Basel%20compliant.
14
https://www.investopedia.com/terms/c/capitaladequacyratio.asp#:~:text=and%20prevent
%20insolvency.-,The%20Bottom%20Line,Section%202.1%2C%22%20Page%208.
15
https://corporatefinanceinstitute.com/resources/career-map/sell-side/risk-management/basel-iii/
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rigorous regulations for liquidity and leverage have also had an impact on
profitability.

2. RBI’s Role in Digital Banking Regulations

 In response to the emergence of digital-only banks, or "neo-banks," the Reserve Bank
of India (RBI) has taken the initiative to establish a regulatory framework that will
guarantee the seamless operation of these businesses while safeguarding the interests
of customers.
 Neo-banks, such as Niyo and Jupiter, which operate entirely online without any
physical branches, have brought a new dimension to banking. To regulate their
operations, the RBI has issued guidelines on licensing, KYC processes, and digital
transaction security.16
 The Reserve Bank of India (RBI) has also been considering the possibility of granting
licenses for wholly digital banks; but, as of right now, these banks can only
collaborate with conventional banks in accordance with current banking regulations.
 The Unified Payments Interface (UPI), mobile wallets, and payment aggregators are
just a few examples of the digital payment systems for which the RBI has been
instrumental in creating a complete regulatory framework.
 Greater accountability and transparency in digital payments are ensured by the
adoption of licensing regulations for payment aggregators and payment gateways.
Strict guidelines pertaining to consumer protection, data preservation, and KYC must
be followed by entities.
 The RBI has introduced digital KYC norms to streamline onboarding processes for
customers while ensuring that anti-money laundering (AML) and countering
financing of terrorism (CFT) regulations are strictly followed.17
 To improve cybersecurity and protect sensitive financial data, the RBI has mandated
in recent years that payment data be held locally in India.
 While maintaining systemic stability, the RBI's rules on digital banking and payment
services have encouraged innovation. The RBI has contributed to an increase in
consumer confidence in digital financial services by finding a balance between

16
https://www.pwc.in/assets/pdfs/consulting/financial-services/fintech/publications/the-evolution-of-
neobanks-in-india.pdf
17
https://www.rbi.org.in/commonman/English/scripts/notification.aspx?id=2607#:~:text=%E2%80%9CDigital
%20KYC%E2%80%9D%20means%20the%20capturing%20live%20photo,officer%20of%20the%20RE%20as
%20per%20the
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 BANKING LAWS AND NI ACT

encouraging digital growth and implementing strict regulations on data privacy,

transaction security, and customer rights.
 Increased oversight of data privacy, grievance procedures, and transaction security
has given consumers more confidence to use digital banking and payment services.

3. Cybersecurity Framework: Addressing Digital Risks and Enhancing Security

 With the increasing growth of digital financial transactions, there is also an increased
danger of fraud, cyberattacks, and data breaches. India reportedly saw a rise in
ransomware, phishing, and data theft instances in addition to an increase in
cyberattacks targeting banks. The RBI and other regulatory bodies have imposed strict
cybersecurity requirements for banks in an effort to mitigate these risks.
 In 2016, the RBI issued a comprehensive Cybersecurity Framework for Banks, which
was later updated to include guidelines for all Scheduled Commercial Banks and
Urban Cooperative Banks (UCBs).18
 Important elements consist of:
I. Cyber Risk Management Policies: Banks must have a strong cybersecurity policy
that outlines information security guidelines, risk management frameworks, and
incident response procedures.
II. Real-Time Monitoring: Security Operation Centres (SOCs) must be established by
banks in order to monitor vital systems and IT assets in real time. Constant
observation facilitates the identification and handling of anomalies or security
breaches in digital transactions.
III. Vulnerability Assessment and Penetration Testing (VAPT): To find and fix flaws
in bank systems and infrastructure, periodic penetration tests and vulnerability
assessments are required.
IV. Reporting Cyber occurrences: Banks are expected to notify the RBI of major
cyber occurrences within a specified amount of time. Timely reporting facilitates
the evaluation of possible hazards to the financial system and the reduction of
extensive cyberattacks.
V. Data Encryption and Privacy: Improved recommendations for data encryption,
safe access control methods, and consumer data protection guarantee the privacy
of client information.

18
https://www.rbi.org.in/commonperson/English/Scripts/Notification.aspx?Id=1721
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 BANKING LAWS AND NI ACT

 The Indian Computer Emergency Response Team (CERT-In) collaborates with banks
and the RBI to provide advisories on emerging cybersecurity threats and assist in
incident response. CERT-In’s role in coordinating with financial institutions during
major cyber incidents is vital for mitigating risks across the sector.19
 Regulators are pushing for multi-factor authentication (MFA) and strong customer
authentication (SCA) procedures, particularly for high-value digital transactions, due
to the growing trend of phishing attacks, online fraud, and identity theft.
 Tokenisation, which replaces sensitive card information with a unique token for every
transaction, is required by the RBI for card-based transactions. This lowers the
possibility of fraud.
 Stronger Security Posture: To strengthen their defences, Indian banks have
substantially improved their cybersecurity systems by implementing cutting-edge
technology like machine learning algorithms, AI-based fraud detection, and biometric
authentication.
 Although the cybersecurity framework has strengthened security, it has also increased
bank compliance costs, particularly for cooperative and smaller banks that might not
have the funds to put in place cutting-edge security measures.
 Banks must continuously upgrade their systems as thieves develop new tactics,
making cybersecurity a top concern.
 A major obstacle facing the sector is the lack of qualified cybersecurity specialists.
 Ongoing cooperation between regulators, banks, and cybersecurity agencies is crucial
to guaranteeing the security of the digital banking ecosystem.
 Investment in training and capacity-building is necessary for guaranteeing the long-
term resilience of the banking sector.

3.4. Emerging Business Models in the Indian Banking Sector

Neobanks, Buy Now, Pay Later (BNPL) services, and embedded financial solutions are
supplementing, and in some cases upending, traditional banking practices. These new
business models, which provide accessibility, convenience, and personalisation, are changing
the way financial services are provided and used.

1. Neobanks: The Rise of Digital-Only Banks and Their Business Models

19
https://www.linkedin.com/pulse/indian-computer-emergency-response-team-cert-in--3wv2e
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 BANKING LAWS AND NI ACT

 Neobanks are branchless, entirely digital banks that only offer online and mobile app
banking services. Neobanks, in contrast to traditional banks, are technology-first
institutions that don't have any physical branches and provide services including
lending options, budgeting tools, digital savings accounts, and payment systems.
 Although full-stack neobanks (banks with their own banking licenses) are not
formally recognised in India, several neobanks collaborate with conventional banks to
enhance the client experience by offering digital interfaces.
 Some of the leading neobanks in India include Niyo, Jupiter, RazorpayX, and Fi.
These banks cater to both retail consumers and businesses by offering seamless digital
experiences, personalized financial products, and tools to manage finances more
efficiently.20
 The lack of physical branches allows neobanks to have much reduced operating
expenses. Customers benefit from these cost savings in the form of free transactions,
low-cost services, and increased interest rates on savings accounts.
 Neobanks customise banking experiences through the use of big data analytics,
machine learning, and artificial intelligence. By offering insights into credit
management, automated savings, and spending trends, they improve client satisfaction
and ease of use in banking.
 Numerous neobanks concentrate on under-represented clientele, including small
enterprises, gig economy workers, millennials, and entrepreneurs. These groups have
specific financial demands, which are met by their customised offers, which include
flexible loan options and tools for managing expenses.
 The main sources of income for neobanks include interchange fees (on credit card
transactions), lending products (such as personal loans), premium service
subscriptions, and joint ventures with fintech and traditional banks.
 Since they lack their own banking licenses, neobanks in India currently have to
collaborate with traditional banks in order to provide services. Their operating
flexibility is so restricted.
 It can be difficult to win over customers who are used to visiting actual banking
locations, particularly those who are elderly or live in remote areas.
 Neobanks are expected to expand quickly as India's digital adoption rate rises,
especially among younger, more tech-savvy clients. They will be formidable rivals to

20
https://www.pwc.in/assets/pdfs/consulting/financial-services/fintech/publications/the-evolution-of-
neobanks-in-india.pdf
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 BANKING LAWS AND NI ACT

traditional banks in the future thanks to their inventiveness and capacity to provide
affordable, individualised services.

2. Buy Now, Pay Later (BNPL) Services: Emerging Trends in Consumer

Lending and Credit
 Buy Now, Pay Later (BNPL) is a consumer finance model that enables users to make
instant product purchases and pay for those purchases over time in installments,
frequently with no interest for a predetermined amount of time. Because BNPL
services offer an alternative to conventional credit cards and loans, they are especially
well-liked for high-end and e-commerce purchases.
 BNPL services have seen exponential growth in India due to the rapid expansion of e-
commerce platforms, millennial and Gen Z demand for flexible payment options, and
the ease of access to credit without the need for extensive credit checks or
formalities.21
 Amazon Pay Later, Slice, ZestMoney, LazyPay, and Simpl are some of the top
companies in India's BNPL sector.
 Installment plans are made available to customers at the point of sale (both online and
offline) by BNPL providers in collaboration with retailers. In order to facilitate these
transactions and boost average order values and customer conversion rates, merchants
frequently pay BNPL providers a commission fee.
 • Although BNPL services often come with short-term, interest-free payback periods,
longer repayment terms or late payments may incur interest or other penalties. This
creates a substantial revenue stream.
 BNPL providers utilize AI and machine learning algorithms to perform real-time
credit risk assessments based on users’ spending habits, repayment behavior, and
digital footprint. This allows them to extend credit even to users with little or no
formal credit history.22
 Because BNPL services offer rapid credit access without requiring a credit card, they
are a desirable choice for people with little credit history or younger consumers.

21
https://fintechnews.sg/100842/lending/bnpl-india-2024/#:~:text=India's%20remarkable%20BNPL%20growth
%20has,the%20Indian%20market%20for%202024.
22
https://seon.io/resources/buy-now-pay-later-fraud-risks-and-prevention/
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 BANKING LAWS AND NI ACT

 Compared to conventional loans or credit cards, BNPL is more accessible and cheap
for a large number of consumers because to the flexible repayment terms and the
absence of upfront interest.
 A rising number of people are worried that BNPL services could promote careless
borrowing and cause customers to accrue debt, particularly if they find it difficult to
manage several monthly payments.
 Despite the fast growth of BNPL, officials are worried about the lax control. To
prevent customers from taking on more debt and to guarantee that interest rates and
other costs are transparent, further controls are required.
 The expansion of e-commerce and customer need for flexible payment options are
projected to fuel the BNPL industry in India. The competition will likely increase as
more conventional banks and financial institutions enter the BNPL market, which
could result in more creative and user-friendly products.

3. Embedded Finance: Financial Services Integrated into Non-Financial Platforms

 Embedded finance refers to the integration of financial services such as payments,
lending, and insurance into non-financial platforms or apps. It allows users to access
banking and financial services seamlessly while using everyday apps, such as e-
commerce platforms (Amazon, Flipkart), ride-hailing services (Ola, Uber), and
fintech apps (Google Pay, Paytm).23
 Using embedded finance frees customers from having to deal directly with traditional
financial institutions. Rather, through APIs that facilitate seamless connection
between financial services providers and non-financial businesses, financial services
are provided at the moment of demand.
 Through their relationships with financial institutions, Amazon Pay and Google Pay
provide a variety of embedded finance options, including bill payment, digital wallets,
UPI payments, and even credit.Flipkart has introduced Flipkart Pay Later, an
embedded BNPL service, allowing customers to shop now and pay later through the
platform.24

23
https://www.itmagination.com/blog/embedded-finance-the-future-of-online-financial-
services#:~:text=Embedded%20finance%20represents%20a%20paradigm,and%20the%20broader%20digital
%20economy.
24
https://fintechnews.sg/100842/lending/bnpl-india-2024/#:~:text=Flipkart%2C%20a%20leading%20Indian
%20e,%2C%20electricity%2C%20and%20postpaid%20bills.
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 BANKING LAWS AND NI ACT

 With its app integrating savings accounts, investments, insurance, and payments,
Paytm has developed into a comprehensive financial services ecosystem.
 Banks, insurance providers, and fintech companies are frequently partners with non-
financial platforms that incorporate financial services. Commissions or profit-sharing
are how these platforms make money on every financial transaction, whether it's a
loan, insurance, or payment.
 Embedding financial services helps non-financial platforms build customer loyalty
and engagement by offering a convenient, all-in-one solution. This reduces friction
and keeps customers within the platform’s ecosystem for multiple services.
 Embedded finance providers leverage customer data to offer personalized financial
products and services, enhancing user experience while driving cross-selling
opportunities (e.g., offering loans or insurance based on shopping behavior).
 Consumers can access financial services directly within the apps they already use,
without needing to switch to a separate banking or payment platform. This simplifies
the customer journey and enhances user experience.
 Non-financial platforms can use their vast user data to offer tailored financial
solutions, such as customized loans, insurance policies, or investment options, based
on a user’s behavior or needs.
 The embedded finance market is predicted to expand rapidly as more non-financial
platforms incorporate financial services. Its capacity to provide smooth, integrated
experiences will spur adoption among both companies and customers.
 APIs will be essential to embedded finance's future development since they make it
possible for banks, fintechs, and non-financial platforms to work together seamlessly.

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4. IMPACT OF COVID-19 ON THE BANKING SECTOR

The COVID- 19 epidemic had a profound impact on the banking sector in India. One of the
most notable shifts during the epidemic was the rapid-fire relinquishment of contactless
payments. As health enterprises over physical contact heightened, consumers decreasingly
turned to digital payment options similar as UPI, QR canons, and valve- to- pay cards. The
need for social distancing made contactless deals not just a convenience but a necessity.
Platforms like Unified Payments Interface( UPI) witnessed a swell in operation, with people
counting more on mobile banking apps and digital holdalls to manage their finances and
make everyday deals. This shift underlined the growing significance of digital structure in
banking, pushing indeed traditional banks to enhance their digital services. On the lending
front, the Reserve Bank of India( RBI) introduced several relief measures to help
individualities and businesses manage the fiscal strain caused by the epidemic. One of the
most significant interventions was the loan doldrums, which allowed borrowers to postpone
loan disbursements without penalties for a set period. This move was pivotal in furnishing
temporary relief to those floundering with cash inflow, especially in sectors that were
oppressively impacted by lockdowns and dislocations, similar as hospitality, retail, and small
businesses. also, loan restructuring schemes were introduced to help businesses and
individualities manage long- term debt more sustainably. These measures, although necessary
to help a large- scale fiscal collapse, also placed pressure on banks as they had to acclimate
their operations to accommodate the delayed disbursements and loan variations. still, these
measures could n't entirely shield the banking sector from the profitable challenges posed by
the epidemic. One of the most significant enterprises was the rise innon-performing
means( NPAs). As the frugality braked down and businesses faced dragged closures or
reduced operations, numerous borrowers were unfit to meet their prepayment scores indeed
after the doldrums ended. This led to a shaft in bad loans, straining the balance wastes of
banks, especially public sector banks that were formerly scuffling with high situations of
NPAs before the epidemic. The increase in NPAs posed pitfalls to the overall stability of the
banking sector, as banks faced difficulties in recovering loans while also demanding to
maintain liquidity to support farther lending in the floundering frugality. While COVID- 19
accelerated the shift toward digital banking and contactless payments, it also exposed
vulnerabilities in the banking system, particularly in the form of rising NPAs and the need for
large- scale loan restructuring. The sector had to acclimatize snappily, with nonsupervisory

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support, to manage these challenges, pressing the need for lesser adaptability and invention in
banking practices going forward.
5. CHALLENGES AND RISKS

Numerous risks and challenges that the Indian banking industry faces will continue to
influence how it operates and expands in the future. Due to these difficulties, which range
from risks posed by technology to stress in the financial system, banks must constantly adjust
to their changing surroundings.
1. Growing Non-Performing Assets, or NPAs:
The problem of growing NPAs is one of the main issues facing Indian banks. These loans are
categorised as "bad loans" when the borrowers don't make the required payments on time.
Asset quality is still an issue despite the efforts of banks and regulators, particularly in light
of the rising default rates caused by the COVID-19 pandemic's economic effects. This affects
the general health of the financial system by placing pressure on banks' profitability and
limiting their capacity to provide new credit.

2. Cybersecurity Threats:-
As digital banking and online deals grow, the banking sector is decreasingly vulnerable to
cybersecurity pitfalls. Banks have come high targets for hackers, with rising cases of online
frauds, phishing attacks, and data breaches. guarding sensitive client information and icing
secure digital deals is getting a top precedence. Banks must invest heavily in robust
cybersecurity fabrics to help fiscal losses and maintain client trust in digital services.
 Competition from Non-Banking Financial Companies( NBFCs)- The growth of
NBFCs has boosted competition in the fiscal sector, particularly in lending. NBFCs
frequently give briskly and more flexible loans compared to traditional banks,
especially in parts like small businesses, consumer loans, and pastoral areas. This
competition forces banks to introduce their products and processes to retain their
request share. NBFCs have also gained an edge in offering digital lending results,
posing a farther challenge for banks to stay competitive.
 fiscal Addition Gap- Despite major sweats to bring banking services to underserved
populations, similar as through schemes like the Pradhan Mantri Jan Dhan
Yojana( PMJDY), a significant portion of the Indian population still lacks access to
formal fiscal services. Challenges similar as low knowledge situations, poor structure
in pastoral areas, and a lack of fiscal knowledge contribute to this fiscal addition gap.
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Banks need to address these issues by developing more accessible, simple, and
inclusive fiscal products that can reach the unbanked and underbanked sections of
society.

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6. FUTURE OUTLOOK

1. Artificial Intelligence (AI)

Automation and artificial intelligence (AI) are rapidly changing the banking business,
changing how banks function and what roles individuals play in it. These tools are becoming
essential as technology develops for enhancing banking decision-making, client satisfaction,
and efficiency.
Data entry, transaction processing, and compliance reporting are just a few of the repetitive,
typical processes that are being automated by robotic process automation (RPA). This
expedites processes and lowers manual mistake rates, enabling banks to process a higher
volume of transactions more accurately. For instance, the automation of procedures such as
account management, KYC (Know Your Customer) checks, and loan application approvals
allows human workers to concentrate on more difficult jobs.

AI-powered chatbots and virtual assistants can now answer a variety of consumer questions,
from checking account balances to providing immediate problem-solving. As a result, clients
may get help around-the-clock, and customer care representatives have less work to do.
Additionally, by using customer data to customise product offers, AI-driven personalised
services improve the consumer experience by making recommendations for loans, credit
cards, or investment alternatives based on unique behaviour and interests.
Real-time analysis of transaction patterns by machine learning algorithms is used to identify
potentially fraudulent or suspicious activity, such as identity theft or unauthorised
transactions. Banks can minimise financial losses and respond more rapidly by automating
the detection of abnormalities.

In a similar vein, AI enhances credit risk assessment through data analysis, allowing for more
precise loan approval decisions and a decrease in the possibility of bad loans.
The banking industry's workforce is being impacted by the increasing use of automation and
artificial intelligence. The kinds of occupations that are accessible change when ordinary
work become mechanised. Back-office operations and other roles involving repetitive manual
processes may experience a reduction in employment. That being said, this does not imply a
decline in employment as a whole. Rather, there is a growing need for new skill sets like
cybersecurity, AI programming, and data analysis. Workers will have to upskill and

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concentrate on positions requiring customer relationship management, critical thinking, and

the capacity to understand insights produced by AI.

Automation will keep expenses down, boost output, and let banks provide more competitive
goods. To preserve client trust and happiness, it will still be necessary to strike a balance
between technology and human touch, particularly in fields like relationship management and
sophisticated financial planning.

2. Open Banking
Through Application Programming Interfaces (APIs), open banking is a revolutionary idea
that makes it possible for banks and outside service providers to securely share financial data.
By establishing an ecosystem, this banking model enables banks to share consumer data with
fintech firms, payment processors, and other financial institutions in order to produce cutting-
edge goods and services. Increased customer empowerment, interoperability, and
competitiveness in the financial sector are being spurred by open banking.
The usage of APIs, which enables banks to share client data with approved third-party
providers, including account details, transaction histories, and spending patterns, is the
fundamental component of open banking. These third-party providers (TPPs) may access
particular data with the consent of the consumer in order to provide customised services
including credit score monitoring, budgeting tools, and customised financial advice.

Under frameworks like the Account Aggregator (AA) system, which enables the secure
interchange of financial data between banks, insurers, and investment businesses and gives
customers a consolidated view of their financial profile, this idea is becoming more and more
popular in India. APIs make sure that this data is communicated safely and easily while
always protecting the privacy and security of the data.
The following are some advantages of open banking: better lending and credit assessment;
enhanced financial innovation; customer-centric services; and increased competition.

Adoption's Difficulties
• Due to privacy concerns, a lot of customers are still unsure of how open banking operates or
are reluctant to divulge their financial information.
•A clear regulatory framework is necessary as open banking expands to guarantee uniform
security and data privacy standards throughout the ecosystem.

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• Traditional banks frequently use antiquated legacy systems that are difficult to integrate
with API-driven environments, which makes it difficult to use third-party services.

Open banking promotes innovation and openness, but it also necessitates stringent security
protocols. Robust encryption requirements must be followed by APIs used for data sharing in
order to safeguard client information.
Open banking practises in India are subject to stringent regulations pertaining to data privacy
and security, which are enforced by regulatory agencies such as the Reserve Bank of India
(RBI) and legislation like the Personal Data Protection Bill.
Customers have complete control over which third-party providers can access their financial
information, helping to allay worries about data exploitation. They also have the assurance
that their financial data is secure and private because they can withdraw their consent at any
time.

Initiatives like the Unified Payments Interface (UPI), which enables instantaneous transfers
between banks and third-party payment providers, are propelling the open banking movement
in India. Going forward, clients will gain from a more streamlined and unified financial
system as more banks and fintech companies adopt open banking.

3. Adoption of 5G
5G technology is poised to bring about significant changes in various sectors, including
banking, in India. The ultra-fast speeds, low latency, and improved connectivity offered by
5G have the potential to transform the delivery of financial services, particularly in rural
areas with limited banking access and digital infrastructure. This next-generation wireless
technology can expand the reach and quality of banking services, promoting financial
inclusion and fostering digital innovation.
The impact of 5G on banking services in rural areas will be substantial, addressing the issues
of unreliable or slow connectivity due to outdated network infrastructure. Presently, rural
populations encounter difficulties accessing digital banking services due to inadequate
network coverage. Through 5G, banks can offer faster and more reliable internet access,
empowering rural customers to use mobile banking apps, digital wallets, and online payment
platforms without interruptions. This will enable access to fundamental banking services,
such as account opening, fund transfers, and balance inquiries, even in remote regions.

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Furthermore, 5G can diminish the reliance on physical bank branches by enabling real-time
video banking and remote consultations, allowing customers to engage with banking agents
for assistance through high-quality video calls. This could lead to wider adoption of digital
banking, reducing the necessity for long-distance travel to bank branches.
Despite initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY), challenges persist in
reaching the last-mile customer for financial inclusion. With 5G, banks can bolster their
financial inclusion efforts by providing improved digital infrastructure to underserved
populations. Mobile banking vans equipped with 5G connectivity can travel to rural areas,
offering immediate access to banking services, financial literacy programs, and digital
payments.
Additionally, 5G's high-speed connectivity will support cloud-based banking solutions,
facilitating the deployment of lightweight, cost-effective banking platforms. This will enable
smaller financial institutions and microfinance entities to deliver digital services at a minimal
cost, thereby widening access to financial products like microloans, insurance, and savings
plans in rural and semi-urban areas.
India's Unified Payments Interface (UPI) system has already transformed the digital payment
landscape, but its adoption in rural areas has been hindered by connectivity issues. With the
introduction of 5G, UPI and other digital payment platforms are anticipated to become more
widespread. The enhanced bandwidth and reduced latency of 5G networks will enable
quicker, more secure transactions, even in areas with poor network coverage.
The increased use of digital payments in rural areas will also contribute to financial
transparency, as cashless transactions leave a digital trail, enabling better tracking of
economic activities. This can also assist rural businesses in gaining access to formal credit
through improved creditworthiness assessments based on transaction histories.
The introduction of 5G will support the adoption of advanced technologies like Artificial
Intelligence (AI), Internet of Things (IoT), and Augmented Reality (AR) in the banking
sector, which can greatly benefit rural banking. 25
With 5G enabling faster and more secure connections, the possibility of digital-only banks (or
neobanks) expanding into rural areas becomes more realistic. These banks can operate
entirely online without the need for physical branches, offering rural customers seamless,
24/7 access to banking services. As 5G eliminates connectivity barriers, even digital-only
models could thrive in areas that were previously inaccessible due to infrastructure
constraints.
25
https://www.linkedin.com/pulse/impact-5g-banking-finance-sector-india-manohar-m
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5G's faster and more secure connections make it more feasible for digital-only banks
(neobanks) to expand into rural areas. These banks can function entirely online without
physical branches, providing rural customers with seamless, 24/7 access to banking services.
With 5G eliminating connectivity barriers, even digital-only models could succeed in areas
previously inaccessible due to infrastructure limitations.
While the potential of 5G in banking is significant, there are specific challenges that need to
be tackled:
• Rural populations might face challenges with the affordability of 5G-enabled devices and
data plans, limiting widespread access.
• Despite the technology's potential, there is still a need to enhance digital literacy in rural
areas so that people can fully utilize these advanced banking services.
• The complete benefits of 5G will only be realized if the necessary telecommunications
infrastructure is deployed across rural and remote areas, which can require time and
substantial investment.

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7. CASE STUDIES
7.1. Examples of Successful Digital Transformations

Several banks have successfully leveraged digital technologies to transform their operations,
enhance customer experience, and improve operational efficiency. case studies of three
leading banks that are at the forefront of India’s digital revolution:
1. HDFC Bank
HDFC Bank has been a pioneer in embracing digital transformation. The bank’s strategy
revolves around creating a seamless, omnichannel banking experience for its customers by
integrating digital platforms with its core banking services.
HDFC’s NetBanking and MobileBanking apps have consistently been enhanced to provide a
wide range of services, including account management, fund transfers, bill payments,
investment management, and even personal loans through a fully digital process. Its mobile
app is known for its user-friendly interface and secure login via biometric authentication.
HDFC Bank introduced Eva, an AI-powered chatbot, that offers customers 24/7 customer
support, helping them resolve queries and perform transactions. The bank also uses Robotic
Process Automation (RPA) to handle repetitive tasks, such as account reconciliation and
customer onboarding, improving operational efficiency.26
HDFC Bank’s PayZapp app has integrated UPI payments, credit card payments, and mobile
recharge into one platform, making it a popular option for digital payments among its
customers.27
Through these initiatives, HDFC has positioned itself as a leader in digital banking, driving
both customer satisfaction and business growth.
2. ICICI Bank
ICICI Bank has also been at the forefront of digital transformation, investing heavily in AI,
blockchain, and automation technologies.
ICICI Bank introduced the iPal chatbot, which uses AI to assist customers with a range of
queries, from account balances to loan information. This has significantly reduced the burden
on human agents, especially during peak times. 28The bank has also embedded AI into its
fraud detection systems, using machine learning to detect suspicious transactions in real-time.
26
https://www.hdfcbank.com/personal/resources/learning-centre/digital-banking/chatbots-in-banking
27
https://www.hdfcbank.com/personal/resources/learning-centre/pay/all-you-need-to-know-about-upi-
autopay-payzapp
28
https://bankingfrontiers.com/icici-bank-launches-chatbot-ipal-voice-assistants/
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ICICI has collaborated with other banks to implement blockchain technology in trade
finance. This system reduces the time and cost associated with cross-border transactions,
making it more efficient and secure for businesses.
ICICI has streamlined the loan process through its Instant Personal Loan feature on its mobile
app. Customers can apply, receive approval, and get disbursement within minutes, all through
digital channels.With these innovations, ICICI has significantly improved its operational
capabilities and is a leader in offering automated, AI-driven services.
3. State Bank of India (SBI)
As India’s largest public sector bank, SBI has been instrumental in driving digital adoption
among its vast customer base.
SBI’s flagship app, YONO, has become one of the most comprehensive digital banking
platforms in India. YONO integrates banking services with e-commerce, allowing users to
manage their bank accounts, shop online, and even invest in mutual funds through a single
app. It also offers pre-approved personal loans to select customers with minimal
documentation through the app.29
Through its digital transformation initiatives, SBI has focused on financial inclusion by
bringing digital banking to India’s rural areas. It has rolled out several initiatives like SBI
Buddy, a digital wallet for low-income customers, and has invested in creating digital
banking kiosks in remote locations.

7.2. FinTech-Bank Collaborations: Real-World Examples

Traditional banks in India have increasingly collaborated with FinTech companies to
accelerate innovation, particularly in payments and lending. These collaborations have
allowed banks to offer advanced services by leveraging the agility and technology expertise
of FinTechs. Below are some notable examples:
1. Yes Bank and PhonePe30
Yes Bank partnered with PhonePe, one of India’s leading UPI-based payment platforms, to
facilitate instant and secure payments. Through this collaboration:
 Yes Bank acts as the banking partner to process UPI transactions initiated through
PhonePe.

29
https://www.researchgate.net/publication/
348205824_YONO_THE_ONE_Digital_Banking_App_of_State_Bank_of_India
30
https://www.yesbank.in/digital-banking/payment-solutions/upi
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 PhonePe leverages Yes Bank’s robust infrastructure to ensure secure fund transfers
between users and merchants.
This partnership has played a key role in the rise of UPI in India. PhonePe’s easy-to-use
interface and Yes Bank’s processing capabilities have made digital payments accessible to
millions of users and small businesses, further boosting the adoption of cashless transactions
across the country.

2. Axis Bank and Freecharge31

Axis Bank acquired a majority stake in Freecharge, a popular digital payments platform, to
strengthen its presence in the digital payments ecosystem.
 The collaboration allowed Axis Bank to offer digital wallet services, instant
recharges, bill payments, and more, directly from the Freecharge app.
 Axis Bank integrated Freecharge with its core banking services, offering customers
seamless payment experiences for online and offline transactions.
This partnership enabled Axis Bank to tap into Freecharge’s large user base, particularly
younger, tech-savvy consumers, and accelerate its growth in the digital payment space.
3. ICICI Bank and Paytm32
ICICI Bank and Paytm, India’s largest digital wallet company, have collaborated to offer
instant digital loans.
 ICICI Bank leverages Paytm’s digital reach to extend its personal loan services to a
broader customer base, particularly in tier-2 and tier-3 cities.
 Customers can apply for loans directly through the Paytm app, with ICICI Bank
processing the applications and disbursing loans instantly.
This collaboration helped ICICI Bank expand its loan offerings to a previously underserved
segment while enhancing Paytm’s value proposition beyond payments.

31
https://www.axisbank.com/docs/default-source/press-releases/axis-bank-acquires-freecharge.pdf?sfvrsn=4
32
https://www.icicibank.com/about-us/article/news-paytm-and-icici-bank-tieup-to-offer-short-term-instant-
digital-credit-20171611114321842
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8. CONCLUSION

Throughout my project, I've delved into several significant trends that have influenced the
Indian banking sector in recent years. Digital innovations like mobile banking, UPI, and AI-
driven services are reshaping customer experiences and transforming the banking landscape.
FinTech collaborations have led to rapid growth, enabling banks to provide more
personalized, efficient, and accessible services, particularly through digital payments and
lending platforms. Initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the
introduction of Central Bank Digital Currency (CBDC) are expanding financial inclusion and
modernizing the country's financial infrastructure.

There have been notable regulatory changes, including the implementation of Basel III norms
and the strengthening of cybersecurity frameworks, which are crucial for maintaining
stability and safeguarding customers as banking becomes increasingly digital. The ongoing
consolidation of public sector banks and reforms like the Insolvency and Bankruptcy Code
(IBC) are vital in addressing challenges related to Non-Performing Assets (NPAs) and
improving the overall efficiency of the banking sector.

The COVID-19 pandemic has accelerated the adoption of contactless payments, loan
restructuring, and raised awareness of the challenges related to rising NPAs.

As India's economy continues to expand, the role of banks will evolve in line with
technological advancements and customer expectations. Banks will increasingly function as
tech-driven institutions, integrating AI, blockchain, and 5G technologies to offer faster, more
secure, and highly personalized services. These developments will be crucial in propelling
India's digital economy, where open banking and interoperability will enable seamless
integration between financial and non-financial platforms, thereby enhancing customer
experiences.

With competition from FinTechs and non-banking financial companies (NBFCs) on the rise,
traditional banks will need to innovate continuously to remain competitive and cater to
diverse segments of the population.

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Ultimately, the future of banking in India hinges on striking a balance between technological
innovation and financial inclusion, ensuring that all citizens, whether in urban or rural areas,
benefit from the advancements in the sector. By doing so, banks will not only continue to
support the country's economic growth but also play a central role in creating a more
inclusive and sustainable financial ecosystem.

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9. REFERENCES/BIBLIOGRAPHY

 RBI (2023). Annual Report 2022-23. Reserve Bank of India.

 RBI (2023). Financial Stability Report. https://www.rbi.org.in
 RBI (2022). Monetary Policy Report 2022. https://www.rbi.org.in
 Government of India. (2015). Pradhan Mantri Jan Dhan Yojana: A National Mission
on Financial Inclusion. https://pmjdy.gov.in
 Ministry of Finance. (2021). India’s Economic Survey 2020-21.
https://www.indiabudget.gov.in/economicsurvey/
 NITI Aayog. (2021). Digital Payment Ecosystem in India. https://www.niti.gov.in/
 Sengupta, R., & Vardhan, H. (2020). Banking Reforms and Regulation in India.
Oxford University Press.
 Reddy, Y.V. (2019). Indian Banking: Managing Transformation. HarperCollins India.
 Raj, P. (2022). “FinTech Revolution in India: Collaboration with Banks and Impacts.”
Journal of Financial Technology, 15(2), 112-129.
 McKinsey & Company. (2020). The Future of Digital Banking in India: Opportunities
and Challenges. https://www.mckinsey.com
 PwC India. (2021). Emerging Trends in Indian Banking. https://www.pwc.in
 KPMG. (2022). India's Digital Banking Revolution.
https://home.kpmg/xx/en/home/insights.html
 Economic Times. (2023). "How UPI is Transforming Payments in India." Available
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 Business Standard. (2022). "Bank Mergers: Analyzing the Impact on Efficiency and
Stability." https://www.business-standard.com
 Financial Express. (2023). "Rise of Neobanks in India: The Digital-Only Banking
Revolution." https://www.financialexpress.com
 Yes Bank. (2020). Digital Payments Ecosystem: The Role of FinTech in
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 ICICI Bank. (2021). AI and Automation in Indian Banking: The ICICI Experience.
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 Indian Journal of Finance and Economics. (2023). “Impact of Basel III Norms on
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 International Journal of Digital Finance. (2021). “Role of FinTech in the Financial

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 https://www.rbi.org.in/commonman/English/scripts/notification.aspx?
id=2607#:~:text=%E2%80%9CDigital%20KYC%E2%80%9D%20means%20the
%20capturing%20live%20photo,officer%20of%20the%20RE%20as%20per%20the
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3wv2e
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evolution-of-neobanks-in-india.pdf
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know-about-upi-autopay-payzapp
 https://bankingfrontiers.com/icici-bank-launches-chatbot-ipal-voice-assistants/
 https://www.researchgate.net/publication/
348205824_YONO_THE_ONE_Digital_Banking_App_of_State_Bank_of_India
 https://www.yesbank.in/digit

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BANKING LAWS AND NI ACT

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