{"id":39650,"date":"2024-05-01T01:48:48","date_gmt":"2024-05-01T01:48:48","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/05\/01\/rbi-scanner-on-gold-loan-startups-setback-for-lending-firms\/"},"modified":"2024-05-01T01:48:48","modified_gmt":"2024-05-01T01:48:48","slug":"rbi-scanner-on-gold-loan-startups-setback-for-lending-firms","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/05\/01\/rbi-scanner-on-gold-loan-startups-setback-for-lending-firms\/","title":{"rendered":"RBI scanner on gold loan startups; setback for lending firms"},"content":{"rendered":"<div style=\"text-align:center\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"900\" src=\"https:\/\/i2.wp.com\/img.etimg.com\/photo\/msid-109742594\/Gold%20loans%20thumb%20ETtech.jpg?resize=1200,900&amp;ssl=1\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"RBI scanner on gold loan startups; setback for lending firms\" title=\"RBI scanner on gold loan startups; setback for lending firms\" \/><\/div><p> <br \/>\n<\/p>\n<div>Happy Wednesday! After the central bank&#8217;s action on IIFL Finance, concerns have been raised over gold loan evaluation by fintechs and their partner banks. This and more in today\u2019s ETtech Morning Dispatch.<\/p>\n<p><span class=\"subHead\">Also in this letter:<\/span><br \/>\u25a0 Licious goes omnichannel<br \/>\u25a0 IT\u2019s growth outside key markets<br \/>\u25a0 AET Displays doubles down on India<\/p>\n<hr style=\"border-bottom: solid 1px #979797; margin: 20px 0 14px;\" data-attr-sectionload=\"jsSectionLad_1\"\/>\n<p>Impurities in gold loan mechanism disbalance scales<\/p>\n<div class=\"imageHolder\"><\/div>\n<p>After the<a href=\"https:\/\/economictimes.indiatimes.com\/industry\/banking\/finance\/iifl-finance-asked-to-stop-sanctioning-disbursing-gold-loans-after-rbi-finds-material-supervisory-concerns\/articleshow\/108208499.cms\"> Reserve Bank of India\u2019s action on IIFL Finance <\/a>regarding its gold loan portfolio in March, the central bank has<a href=\"https:\/\/economictimes.indiatimes.com\/tech\/technology\/rbi-cautions-banks-on-gold-loan-disbursals-through-fintech-startups\/articleshow\/109737639.cms\"> conveyed concerns over gold loan evaluation <\/a>conducted through fintech partners, sources in the know told us.<\/p>\n<p><span class=\"subHead\">Driving the news:<\/span> Large banks with exposure to fintechs in the gold loan business have been told by RBI that the regulator is not satisfied with the way in which gold is assayed and Ioans are being underwritten, especially by fintech platforms. While there\u2019s no written communication on the matter yet, those in the know said the regulator has made its displeasure felt.<\/p>\n<div class=\"imageHolder\"><img decoding=\"async\" class=\"artimg\" align=\"center\" style=\"width:100%;\" src=\"https:\/\/img.etimg.com\/photo\/msid-109742678\/gold gfx.jpg\" alt=\"gold gfx\" title=\"gold gfx\"\/><\/div>\n<p><span class=\"subHead\">Go deeper:<\/span> Federal Bank is one of the largest lenders in this space, followed by South Indian Bank, Axis Bank and ICICI Bank. Now, even HDFC Bank is chasing gold loans. In February, Kotak Mahindra Bank, too, spoke about its ambitions in this space. With fintechs like Rupeek, Indiagold and Oro Money, these banks can take the gold loan service to the customers\u2019 doorstep. However, the regulator\u2019s observations could slow down the process, industry insiders feel.<\/p>\n<p><span class=\"subHead\">Glitter of gold:<\/span> Why is everyone chasing the gold loan market?<\/p>\n<ul class=\"ulCommon\">\n<li>There is a massive demand for such loans: Disbursals exceeded Rs 1 lakh crore in March 2024.<\/li>\n<li>Gold prices have shot up to around Rs 75,000\/10 grams compared to around Rs 62,000 a year back.<\/li>\n<li>Doorstep services have made customers comfortable while monetising their family jewellery.<\/li>\n<\/ul>\n<hr style=\"border-bottom: solid 1px #979797; margin: 20px 0 14px;\" data-attr-sectionload=\"jsSectionLad_2\"\/>\n<p>P2P lending startups face setback as RBI prohibits default loss guarantee<\/p>\n<div class=\"imageHolder\"><img decoding=\"async\" class=\"artimg\" align=\"center\" style=\"width:100%;\" src=\"https:\/\/img.etimg.com\/photo\/msid-109742628\/P2P lending startups like Lendbox, Liquiloans to offer quick loans ETTECH.jpg\" alt=\"P2P lending startups like Lendbox, Liquiloans to offer quick loans ETTECH\" title=\"P2P lending startups like Lendbox, Liquiloans to offer quick loans ETTECH\"\/><\/div>\n<p>After having to <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/startups\/p2p-lenders-to-stop-liquid-funds-as-rbi-peers-into-business\/articleshow\/108686922.cms\">stop offering instant withdrawal on P2P investments<\/a>, now peer-to-peer lending startups cannot even resort to the comfort of a default loss guarantee (DLG) for loans not being repaid on time. This could have a <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/technology\/central-bank-bars-p2p-startups-from-giving-default-loss-guarantee-in-tie-ups-with-nbfcs\/articleshow\/109737828.cms\">major impact on P2P companies which depend on partners to source borrowers.<\/a><\/p>\n<p><span class=\"subHead\">Driving the news:<\/span> On April 26, the <a href=\"https:\/\/economictimes.indiatimes.com\/industry\/banking\/finance\/rbi-proposes-new-norms-for-lsps-to-promote-transparency\/articleshow\/109628750.cms\">RBI said DLG cover cannot be offered to P2P platforms. <\/a>While many startups claim they have already moved out of such arrangements, the reality is that the industry was using such guarantees to protect investors lending money through P2P firms.<\/p>\n<div class=\"imageHolder\"><img decoding=\"async\" class=\"artimg\" align=\"center\" style=\"width:100%;\" src=\"https:\/\/img.etimg.com\/photo\/msid-109742685\/p2p hgx.jpg\" alt=\"p2p hgx\" title=\"p2p hgx\"\/><\/div>\n<p><span class=\"subHead\">Quote, unquote:<\/span> \u201cNBFC-P2P is a mere platform facilitating the connection between borrowers and lenders which does not lend from its own books\u2026Therefore, ideally, they could never enter into DLG arrangements,\u201d said Rishabh Mastaram, founder, RGM Legal.<\/p>\n<p><span class=\"subHead\">Scrutiny on the sector:<\/span> RBI has been increasing its scrutiny on the digital lending space and NBFC-P2Ps were audited closely over the last one year. In March the industry stopped liquid funds \u2013 one of its most popular products &#8211; and now with DLG gone, many of them might have to resort to open market sourcing of customers, which will push up their business costs.<\/p>\n<p><span class=\"subHead\">Also read | <\/span><a href=\"https:\/\/economictimes.indiatimes.com\/tech\/startups\/p2p-lenders-to-stop-liquid-funds-as-rbi-peers-into-business\/articleshow\/108686922.cms%E2%80%8B%E2%80%8B\" data-type=\"tilCustomLink\" target=\"_blank\" rel=\"noopener\">P2P lenders to stop \u2018liquid funds\u2019 as RBI peers into business<\/a><\/p>\n<hr style=\"border-bottom: solid 1px #979797; margin: 20px 0 14px;\" data-attr-sectionload=\"jsSectionLad_3\"\/>\n<p>Licious goes omnichannel with retail stores post restructuring <\/p>\n<div class=\"imageHolder\"><img decoding=\"async\" class=\"artimg\" align=\"center\" style=\"width:100%;\" src=\"https:\/\/img.etimg.com\/photo\/msid-109742652\/Online meat selling platform Licious physical stores in Bengaluru.jpg\" alt=\"Online meat selling platform Licious physical stores in Bengaluru\" title=\"Online meat selling platform Licious physical stores in Bengaluru\"\/><\/div>\n<p>Direct-to-consumer (D2C)-focused <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/startups\/licious-turning-omnichannel-with-five-stores-in-bengaluru-by-june\/articleshow\/109734041.cms\" target=\"_blank\" rel=\"noopener\">meat seller Licious is set to enter offline retail. <\/a><\/p>\n<p><span class=\"subHead\">Tell me more:<\/span> The online-first meat and seafood seller is going omnichannel with five physical stores in Bengaluru by June, cofounders Vivek Gupta and Abhay Hanjura told us. It plans to open 35-40 stores by the end of the fiscal year 2025 across two-three cities.<\/p>\n<p>Over the next five years, it will look to open 500 such stores across the country as part of its \u2018next big focus\u2019 area.<\/p>\n<p><span class=\"subHead\">Profitability push: <\/span>The Temasek-backed firm is also looking to turn profitable on an earnings before interest, tax, depreciation and amortisation (Ebitda) level by the end of FY25, said Gupta.<\/p>\n<p>It currently has an operating profit margin of around 6%, which includes costs around processing, wastage, manufacturing, delivery, and excludes marketing and corporate costs.<\/p>\n<p>Currently, Licious is at a monthly revenue run rate of around Rs 73 crore, and is looking to hit Rs 100 crore by the end of FY25, out of which Rs 8-10 crore will come from offline sales, Hanjura said.<\/p>\n<p><span class=\"subHead\">Retail opportunity: <\/span>This coincides with several new-age online-first brands that are going offline to acquire new users. For Licious, the hope would be that new offline users will also transact online.<\/p>\n<p><span class=\"subHead\">Also read | <\/span><a href=\"https:\/\/economictimes.indiatimes.com\/tech\/startups\/licious-lays-off-80-employees-as-part-of-operational-reset\/articleshow\/107552987.cms%E2%80%8B%E2%80%8B\" data-type=\"tilCustomLink\" target=\"_blank\" rel=\"noopener\">Licious lays off 80 employees as part of &#8216;operational reset&#8217;<\/a><\/p>\n<hr style=\"border-bottom: solid 1px #979797; margin: 20px 0 14px;\" data-attr-sectionload=\"jsSectionLad_4\"\/>\n<p>Other Top Stories By Our Reporters<\/p>\n<div class=\"imageHolder\"><img decoding=\"async\" class=\"artimg\" align=\"center\" style=\"width:100%;\" src=\"https:\/\/img.etimg.com\/photo\/msid-109742658\/Earnings Revenues and profits target crosses financial Startup THUMB IMAGE ETTECH.jpg\" alt=\"Earnings Revenues and profits target crosses financial Startup THUMB IMAGE ETTECH\" title=\"Earnings Revenues and profits target crosses financial Startup THUMB IMAGE ETTECH\"\/><\/div>\n<p><span class=\"subHead\">IT majors bank on growth outside key markets | <\/span>India\u2019s top <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/technology\/it-companies-log-strong-revenue-growth-outside-key-north-america-market\/articleshow\/109735050.cms\" target=\"_blank\" rel=\"noopener\">IT services exporters are seeing revenue growth in parts of Europe <\/a>and regional markets \u2014 the Middle East &amp; Africa (MEA) and India and Asia Pacific (APAC) \u2014 outpacing that in the traditional stronghold of North America, which is experiencing flattening demand.<\/p>\n<p><span class=\"subHead\">AET Displays to pump Rs 200 crore in India |<\/span> AET Displays, part of China\u2019s Guangda Group, <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/technology\/chinas-screen-maker-aet-lines-up-rs-200-crore-for-india\/articleshow\/109734807.cms\" target=\"_blank\" rel=\"noopener\">plans to invest Rs 200 crore in India over the next 12-18 months <\/a>to expand manufacturing, strengthen its local supply chain and after-sales service network, a top executive said.<\/p>\n<p><span class=\"subHead\">No financial impropriety found till now in whistle-blower allegations: Birlasoft CEO |<\/span> The CK Birla group\u2019s information technology firm, Birlasoft, received two whistle-blower complaints in the last seven months alleging improper conduct of some employees, the company said in its financial statements. <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/information-tech\/no-financial-impropriety-found-in-whistleblower-allegations-birlasoft-ceo\/articleshow\/109736068.cms\" target=\"_blank\" rel=\"noopener\">Investigation into the complaints is ongoing <\/a>and till now no instance of financial impropriety has been found, chief executive and managing director Angan Guha said.<\/p>\n<p><span class=\"subHead\">Groww, Worldline ePayments secure payment aggregator licences |<\/span> Wealthtech unicorn Groww and digital payment processing company Worldline ePayments <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/technology\/groww-secures-online-payment-aggregator-licence-from-rbi\/articleshow\/109725361.cms\" target=\"_blank\" rel=\"noopener\">secured online payment aggregator (PA) licences<\/a> from the Reserve Bank of India on April 29. Groww received the licence for its subsidiary payment business Groww Pay.<\/p>\n<hr style=\"border-bottom: solid 1px #979797; margin: 20px 0 14px;\" data-attr-sectionload=\"jsSectionLad_5\"\/>\n<p>Global Picks We Are Reading<\/p>\n<p>\u25a0 Why Musk now needs China more than it needs him (<a href=\"https:\/\/www.wsj.com\/world\/china\/why-musk-now-needs-china-more-than-it-needs-him-128e33b0?mod=hp_lead_pos10\" target=\"_blank\" rel=\"noopener\">WSJ<\/a>)<\/p>\n<p>\u25a0 Apple targets Google staff to build artificial intelligence team (<a href=\"https:\/\/www.ft.com\/content\/87054a60-dc4d-4238-a4b9-93ab48f22f56\" target=\"_blank\" rel=\"noopener\">FT<\/a>)<\/p>\n<p>\u25a0 Everything you need to know about AI detectors for ChatGPT (<a href=\"https:\/\/www.wired.com\/story\/ai-detector-chatgpt\/\" target=\"_blank\" rel=\"noopener\">Wired<\/a>)<\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/economictimes.indiatimes.com\/tech\/newsletters\/morning-dispatch\/rbi-scanner-on-gold-loan-startups-setback-for-lending-firms\/articleshow\/109742597.cms\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Happy Wednesday! After the central bank&#8217;s action on IIFL Finance, concerns have been raised over gold loan evaluation by fintechs and their partner banks. This and more in today\u2019s ETtech Morning Dispatch. Also in this letter:\u25a0 Licious goes omnichannel\u25a0 IT\u2019s growth outside key markets\u25a0 AET Displays doubles down on India Impurities in gold loan mechanism [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":39651,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/img.etimg.com\/photo\/msid-109742594\/Gold%20loans%20thumb%20ETtech.jpg","fifu_image_alt":"","footnotes":""},"categories":[607],"tags":[918,1966,2336,41857,41856,5495,41855,41854,2070,11144,2126,20163,3423,922],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/39650"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=39650"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/39650\/revisions"}],"predecessor-version":[{"id":39652,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/39650\/revisions\/39652"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/39651"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=39650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=39650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=39650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}