My Key Takeaway from the Chat between Mr.David Velez and Mr.Jitendra Gupta

          I was fortunate to be part of the chat between Mr.David Velez and Mr.Jitendra Gupta on 26^th  June 2020.

          The theme of the Chat was ‘Insight’s from NUBank Journey’. Mr.David Velez, Founder and CEO, NUBank was the guest and Mr.Jitendra Gupta, Founder and CEO, Jupiter was the Host.

          There were multiple takeaways for the audience from the chat which lasted about 45 minutes.  

          The key takeaway for me is: -

A)   Choose the less travelled path, have patience and success will be besides you. NUBank started of its journey with a Credit Card product rather than a Debit Card product. This was a bit risky, as most of NEO Banks started their journey with a Debit Card.

 

 

Other minor takeaways are:

01) This saying attributed to Mahatma Gandhi occupies a place of pride in NUBank’s Head Office -- First, they will ignore you, then they will laugh at you, then they will fight you and then you win”

02) Company culture is an important pillar for the company’s growth. The founders should not deviate from the company’s culture.

03) Customers prefer free services over paid services.

 

Brief about NUBank:

01) 2013 – Founding Year

02)  2014 – Launch of International Mastercard Credit Card. NIL Fees and can be completely managed through a Mobile App

03)  2017 – Launch of its loyalty program -- NUBank Rewards. The reward points never expire. 30 days freelook period followed by fees.

04)  2017 - Launch of NuConta – Digital Account

05)   2018 – Launch of Debit Card

06)  2019 – Launch of Personal Loans  

 

 

Brief about Jupiter:

 

01) Built with LOVE in India

02)  On the way for a Beta Launch in India

 

If you too were part of the Chat, what is your takeaway?

 

Disclaimer: The takeaways are my personal opinion only.

DigiHuman approach to reduce stress levels of YES Bank Retail Customers

YES Bank customers have had a roller-coaster ride in the last few days. 

As YES Bank customers can withdraw up-to INR 50,000 through ATMs, the physical rush at its branches is thinning down.

Now, the next challenge for customers, to withdraw more than INR50,000 but less than INR5,00,000 or available balance, which ever is less.

Disclaimer: These are my personal views only and do not reflect the any other’s views.  

I Pray to God that the need for RBI to activate this clause never arises.

Ref: MINISTRY OF FINANCE (Department of Financial Services) (BANKING DIVISION)

NOTIFICATION New Delhi, the 5th March, 2020

QUOTE

Without prejudice to the conditions stipulated in paragraph 2(a) of this Order in relation to payment to any depositor of the said banking company, the Reserve Bank may by a general or special order, permit the said banking company to allow payment to its depositors an amount in excess of Rs. 50,000/- (Rupees fifty thousand only) to meet unforeseen expenses, as under:

(i) in connection with the medical treatment of the depositor or any person actually dependent on him;

(ii) towards the cost of higher education of the depositor or any person actually dependent on him for education in India or outside India;

(iii) to pay obligatory expenses in connection with marriage or other ceremonies of the depositor or his children or of any other person actually dependent upon him;

(iv) in connection with any other unavoidable emergency:

Provided that the amount so allowed to be paid out of the balance lying to the credit of the depositor—

(a) shall be reckoned towards the payment due to him under any scheme of reconstruction or amalgamation as may be sanctioned by any competent authority in relation to the said banking company and subject to such conditions as may be provided under such scheme about appropriation of any payment made to a depositor of the said banking company before or on the coming into force of the scheme; and

(b) shall not exceed the sum of Rs. 5,00,000/- (Rupees five lakh only) or the actual balance lying to the credit of the account of such depositor, whichever is less.

UNQUOTE

Indicative approach to reduce the stress levels:

Maximum paperless, minimal human intervention, Dash Board

SEBI is already following ‘Digital Claim Process’ to process PACL Refunds.

More details can be read at the below links:

https://www.sebipaclrefund.co.in/

FAQs to enable PACL investors submit their claims @ https://www.sebipaclrefund.co.in/Pdf/en/FAQs.pdf

FORMAT OF BANKER’S VERIFICATION LETTER @ https://www.sebipaclrefund.co.in/Home/BankLetter

Cancelled Cheque Leaf @ https://www.sebipaclrefund.co.in/Home/CancelCheque

The main differentiator between PACL Refunds and YES Bank additional withdrawal is the various purposes for which withdrawals are permitted in YES Bank.

Hence the necessary documents will vary from one ‘unforeseen expense’, to another ‘unforeseen expense’,

Sr No	Scenario	Proposed Application flow
01)	Customers with Mobile Banking / Net Banking Access	Application process in case of above scenarios can be via Mobile Banking / Net Banking
02	Customers without Net Banking / Mobile Banking Acess	Application process in case of above scenarios can be via Mobile Banking / Net Banking Micro Site at www.yesbank.in
03	Senior citizens who are not tech savvy	Physically carry documents to YES Bank designated branches, and YES Bank will upload the documents in the dedicated website.

As the process flow can be like ‘PACL Refunds’, I am not elaborating much on the same.

The supporting documents required under each ‘unforeseen expenses’, should be arrived at and be part of the FAQs

All pay-outs to be other bank accounts only. Cash Pay-out is for Senior Citizens only. 

Acceptance Development Fund (ADF) – Should it be restricted only to Card Infrastructure??

          Reserve Bank of India in its Payment and Settlement Systems in India: Vision – 2019-2021 document outlines the need for ADF to facilitate innovations in Digital transactions and reduce the cost for digital transaction acquirers.

QUOTE 

Creation of an Acceptance Development Fund (ADF) to subsidise acquirers for deploying PoS acceptance infrastructure in tier-3 to tier-6 centres. This would help in facilitating innovation and reducing cost of such transactions.

UNQUOTE

          The share of digital transactions in Tier 3 to Tier 6 centres in the overall financial transactions’ portfolio is less when compared to Tier 1 or Tier 2 centres.

          One of the reasons for the low share of digital transactions in Tier 3 to Tier 6 centres, is the acquirer’s reluctance to deploy the required infrastructure for digital transactions stating a long gestation period.

          Hence, the need for an ADF to speed up the infrastructure roll-out for Safe Digital Transactions.

          The concept of Acceptance Development Fund (ADF) was first mentioned by Reserve Bank of India in ‘Concept Paper on Card Acceptance Infrastructure’, released in  March 2016.

          This concept paper outlines the contours of the ADF i.e ADF Management, contribution to ADF, parameters to receive grants from ADF etc.

          The March 2016 concept paper mentions about ADF to strengthen Card Acceptance infrastructure.

In other countries, Mastercard and Visa - the two dominant card network players, are a major contributor to ADF, as cards constituted a major chunk of digital transactions.

 However, the main differentiation between India and other countries is UPI. UPI has no parallel anywhere else.

The launch of UPI (Unified Payment System) has shaken the world of digital transactions. Digital transactions are no longer restricted to Net banking or Debit cards. Now, UPI commands a growing share of digital transactions.  

          Today’s POS terminals support a wide variety of digital transaction channels i.e Credit Cards, Debit Cards, UPI, BharatQR

Pinelabs, Innoviti, Flipkart -  Couple of POS terminals which accept payments via UPI.

          The day’s of POS terminals supporting only Credit Cards or Debit Cards are getting over.

          A cursory reading of ADF in other countries shows that the ADF is heavily tilted towards POS terminals.

However, as the formation of ADF picks up speed, there may debates on the varieties of digital transaction channels which may require ADF support.

          The beauty of India’s digital transactions is that it comprises a large number of channels, each channel having its plus and minus points.

          Let us wait and watch for the ADF rollout.

           

Malaysia’s central bank to improve the payment infrastructure in the country, set up the Market Development Fund (MDF) in 2015, under which credit card scheme providers can contribute by channeling 0.1% of each payment card transaction.

          Acceptance Development Funds have been successfully deployed in several countries, including Indonesia and Poland too.

           

Reserve Bank of India to unveil Regulatory Sandbox in the next two months

          At 25^th March, 2019,  NITI Aayog’s FinTech Conclave’s Keynote Address Shri Shaktikanta Das, Governor, Reserve Bank of India, mentioned about the need for Regulatory Sandbox.

          The theme of the keynote address is “Opportunities and Challenges of FinTech”

Quote

 The Reserve Bank’s working group on FinTech and digital banking (Report of the working group on FinTech and digital banking, November 2017) suggested the introduction of a 'regulatory sandbox/innovation hub' within a well-defined space and duration to experiment with FinTech solutions, where the consequences of failure can be contained and reasons for failure analysed. A ‘Regulatory Sandbox’ would benefit FinTech companies by way of reduced time to launch innovative products at a lower cost. Going forward, the Reserve Bank will set up a regulatory sandbox, for which guidelines will be issued in the next two months.

Unquote

          In simple terms, Sandbox is an isolated environment in which new approaches can be tested before releasing for Live use.

          Developers can run their test-cases in a controlled environment to observe the IT Applications behaviour and fine-tune for live use.

Sandbox is a special security feature which allows you to run potentially suspicious applications automatically in a completely isolated environment. Programs running within the sandbox have limited access to organisation files and system, so there is no risk to your computer or any of your other files.

Regulators in major financial markets have established regulatory ‘sandbox’ or testing environment for furthering financial technology and adoption

SEBI in mid-2017 set up a ‘Committee on Financial and Regulatory Technologies (CFRT)

One of the committee’s objective is to finalised the ‘Approach  and  framework  for  regulatory  sandbox  in  Indian  market  conditions  to  facilitate adoption of FinTech and promote financial innovations’.

IRDA in late 2018 set up a committee to frame guidelines on ‘Regulatory Sandbox’, in Insurance space in India. The committee has submitted its key recommendations to IRDA. IRDA in turn has sought feedback from general public before releasing the final guidelines.

The Insurance Regulatory Sandbox would have defined entry and eligibility criteria, boundary conditions, process flow, timelines and success factors / exit parameters for the applicants, along with appropriate controls for protection and risk management.

  

The above terms will be common to Finance Regulatory Sandbox and Stock Market Regulatory Sandbox.

The word ‘Regulatory Sandbox’, is also mentioned in ‘Report of the Working Group on FinTech and Digital Banking’, submitted to Reserve Bank of India in November 2017.

On of the committee’s key recommendations is:

In view of IDRBT’s unique positioning as a research and development institute, and as indicated by some of its activities, it is felt that IDRBT is well placed to create and maintain a regulatory sandbox in collaboration with RBI for enabling innovators to experiment with their banking/payments solutions for eventual adoption.

The Institute may continue to interact with RBI, banks, solution providers regarding testing of new products and services and over a period of time upgrade its infrastructure and skill sets to provide full-fledged regulatory sandbox environment. The Reserve Bank of India may actively engage with the Institute in this regard.

State Bank of India invites General Public for its SBI Fintech Innovation Incubation Program

          State Bank of India is keen to deploy cutting edge technologies to assist its account holders and staff to experience Safe Digital Banking, across all its product       

As on date, SBI has two Innovation campuses :

1) GITC : SBI Global IT Centre, CBD Belapur, Navi Mumbai.

2) SBIIT : State Bank Institute of Innovation and Technology, Road no 12, Banjara Hills, Hyderabad

The innovation centre is housed in SBI Global IT Centre, CBD Belapur, Navi Mumbai. The innovation centre is spread over 15, 000 sqft  with an investment of 100 crores.

In the long run, SBI plans to allocate 5 percent of IT budget for innovation. The Innovation Centre will have 30  members to oversee the programs.

State Bank of India has also a dedicated campus at Hyderabad specialising in Innovation and Technology.

Initially SBI will offer its fintech incubation program at its Navi Mumbai and Hyderabad Innovation campuses.

The innovation program is an ongoing one and Developers, Startups, Entrepreneurs (individuals or teams) having Fintech based innovative idea on emerging and new technologies are encouraged to apply through the Application provided on the webpage.

The selected candidates will join hands with SBI to be self-reliant and incubate novel technology and business ideas into viable commercial business products.

The whole program is split into two parts i.e

Part 01) __ Idea Modelling – 2 months

Part 02) __ Prototype Development – 10 months

The selected candidates are expected to sign a Non-Disclosure Agreement and other documents specified by the Bank at the time of on-boarding into the program.

Incubatee shall offer Restricted IPR on the product developed under the program by signing Restricted IPR agreement by the Incubatee/Startup Company.

The applicants can seek any clarification on the guidelines by dropping a mail to :incubate@sbi.co.in

State Bank of India has made it very clear that all communications related to the scheme including announcements of shortlisted applicants and final selection of applicants will be sent to the applicants directly and will not be made available on this website.

Interested to be part of “SBI Fintech Innovation Incubation Program’, than follow the below process:

Apply - Interested individuals or team can apply by sending their application with full details on the form available on the link below.

Selection - The applicant of shortlisted entries will have to make a presentation on their idea/ solution to the Selection Board of Bank at GITC, Belapur, Navi Mumbai/ SBIIT Hyderabad as per the decision of the Bank.

On selection of the applicant’s idea/ solution the incubatee will be assigned an incubation mentor to assist the incubatee.

Post Selection - The incubatee should prepare project report covering Scope of Work, Timeline and milestones, Details of expenses and infrastructure etc.

The major differentiator between SBI Incubation program and other incubation programs is that this is on-going program and applicants can apply at any time.