• IPO means Initial Public Offering. It is a process by which a privately held company becomes a publicly traded company by offering its shares to the public for the first time.
• The payments start-up”Mobikwik” is targeting to file for the draft IPO by May 2021 that may valve the firm at more than $1 billion. It is willing to hold a pre-IPO funding round, which may give it a valuation of about $700 million, a Bloomberg report has said. Also, the firm is willing to hold a pre-IPO funding round, which may give it a valuation of about $700 million.
• According to a PwC report (Price Waterhouse and Coopers) published in December 2020, India's digital payments market could reach Rs 163 trillion ($2.3 trillion) in 2022-2023. With Face book Inc’s WhatsApp winning permission in November to operate locally, competition among the digital payments players like Google Pay, Walmart Inc’s PhonePe and Paytm has increased.
• Mobikwik claims a million transactions on a daily basis across its offerings, which include digital wallets and services such as mobile phone top-ups and utility bill payments. The firm says its network has more than 3 million merchants and serves in excess of 107 million users. Mobikwik counts Sequoia Capital and Bajaj Finance Ltd among its backers.
• Fintech is a combination word derived from finance and technology. It describes the financial service sector of the 21st century. Previously this term is used to describe the back end dealing of financial instiutions. At present this term now includes any innovation in the financial industry which is due to technology. It has redefined every aspect of money matters. The fintech adoption rate of India is approximately 52% which is second to China.
• The fintech revolution in India started in the year 2015 which saw new fintech start-ups emerging through public and private investments. It was achieved through technical skills, finance, and passion for innovation. This along with the regulatory framework and government policies were also present to establish financial technology in India. Although India is still adapting to commercial technology by transforming its economic ecosystem.
• The future of fintech India is bright. With developments taking place in significant areas of fintech it is predicted that India will adopt this technology completely. Alternate lending, robot advisory, and digital payments will become the norm. Although there are threats that exist such as cybercrimes which can be mitigated through strict and efficient security measures.
5. IFMR Holdings
• One of the biggest reasons why FinTech learning is essential right now is technology. The finance industry is no longer in the initial stage. The industry has adopted technology and is changing really fast. FinTech has brought each and every aspect of finance to the everyday man. There are no middlemen or economic bifurcations anymore. Everything is computer-based, and that is why FinTech is essential.
1. Public Limited Company (PLC) – PLC is equivalent of U.S publicly traded company that carries the Inc. or corporation designation. A PLC company offers its shares to general public; the buyers have a limited liability. A PLC should have a minimum of 7 shareholders; there is no limit on the maximum number of shareholders.
2. Private Limited Company – It is a privately held business entity i.e., it is held by private shareholders. A private limited company must have a minimum of 2 members and maximum 200 members.
A public limited company can be converted back into a private limited company through the process of delisting.
A private company can become a public limited company by going public.
3. Joint venture Company – Joint ventures are usually a temporary business agreement where two or more parties/companies come together and combine their resources to pursue a specific project, either to produce similar products or services or to create an entirely new/different firm with different business.
4. Partnership firm – It is an association of two or more people to carry a business in the capacity of co-owners. The partners share profits in proportion of their respective ownership. The partners have an unlimited liability i.e., a partner may lose all the life savings on account of a loss in the business.
5. One person company – A company that has only one person as its member is known as one person company. The other members are known as subscribers to the memorandum of association or shareholders. Only one subscriber is the member of the company. The promoter and OPC are legally two separate entities, i.e., the promoter is not liable to repay the debts of the company.
6. Sole Proprietorship – It is an unincorporated company/business that has just one owner who pays personal income tax on profits earned from the business. The company and the owner are not two separate entities. The company be gradually be converted into a private limited company and then into a public limited company.
7. Non- Government organization (NGO)– NGO is a non-profit organization/group which functions independent of any government. It can be organized on community, national and international levels to serve the political or social goals. They focus on development projects, social issues and influencing public policy. NGOs usually rely on membership dues, private donations, sale of goods and services and grants for funding.
• Automatic payment of electricity, water and phone bills, loan instalments, insurance premium and many other payments like Google, Zee-5, Netflix and other OTT platforms from your bank's debit or credit cards may stop from April 1.
• A circular issued by the RBI on August 21, 2019, prescribes additional authentication norms effective from April 1 for customers’ recurring payments that are directly debited to their bank accounts.
• Many banks and service providers have not updated their systems to comply with the new rules and the RBI has refused to further extend the deadline on the ground that they had been already given more than 18 months to comply with.
• The new rules mandate the banks and the service providers to inform the customer five days in advance before the payment is due and deduct it from his/her bank account only after he okays. Most of these payments are in hundreds, but if a recurring payment happens to be above Rs 5,000, an additional authentication contemplates the banks providing the one-time password to the customer.
• If your bank or the service provider has not updated their system to comply with the RBI requirements, you will have to log into each of their web pages to make payments on the due dates.
As indicated above, the RBI fears that auto-debit transactions on third-party merchant websites are susceptible to fraudsters. Hence, the regulator wants banks to have a control over the auto-debit payments on merchant sites and customers to know about the payments each time. Typically at the time of making a third-party payment using a credit card or debit card, the third-party merchants ask the customer if he/ she would like to make a standing instruction for automatic deductions. Many a times, customers opt for this.
For recurring payments through third-party merchant websites, the bank needs to send a communication to the customer five days in advance and at least 24 hours before the payment date intimating the customer about the scheduled payment and asking if he/she wants to opt out or part-pay the amount. If the customer wants to opt out of the standing instruction arrangement, he/she can do that. Customers will have to do a one-time registration for third party payments. Else, customers will have to go to the bank websites and make payments directly.