Spice Money: Industry Monitoring 05 to 07 January 2019
- Priyanka Kanodia
- Jan 8, 2019
- 3 min read
Spice Money
Bandhan Bank in advanced talks for Gruh Finance Merger
Publication- The Economic Times
Edition- Online
Date- 07 January, 2019
Bandhan Banks’s talks with HDFC to either buy into or merge with Gruh Finance NSE -2.86 % , a mortgage-lender for the less affluent, have reached an advanced stage, although the regulatory response to the proposal would decide the fate of the transaction, two people familiar with the matter told ET. “The talks regarding the deal between Bandhan Bank and Gruh Finance have reached an advanced stage,” said a source close to the development. “However, there is no clarity on whether the deal will get regulatory and stakeholders’ approvals, and within what timeframe.” The deal, if it were to secure regulatory approvals, could be announced soon.
Bandhan Bank, which started operations in 2015, is exploring the M&A route to meet the regulatory guidelines on trimming promoter shareholding. The proposed transaction would help Bandhan reduce its promoter holding in the lender from the existing 82.28%. The promoters need to bring down their stake to 40%. HDFC, India’s mortgage-lending pioneer, owns 21% in HDFC Bank NSE 0.64 % and 2% of RBL Bank. The regulator may demand a plan of action to ascertain what HDFC intends to do with its high stake in Bandhan Bank. If the merger happens at the current market cap, HDFC would own around 15% in Bandhan Bank. “The deal will require exemption from the Reserve Bank of India for HDFC to own more than 5% stake in Bandhan Bank and the regulator will insist on a plan of action defining the timeline for a reduction of its stake in the merged entity,” said another source aware of the development.
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Industry News
What 2019 means for fintech in 2020
Publication- ET Tech
Edition- Online
Date- 07 January, 2019
Fintech in India is still young — just five years old — yet it’s a revolution which is changing consumer behavior. In a short time, it has changed how common people look at money itself.
Money used to be cash, then plastic and now a mobile device. In India, new payment solutions like UPI (Unified Payments Interface) and Bharat QR have given a much-needed boost in shifting consumers from cash-based transactions to digital alternatives. For Indian Fintech companies to make the most of it, they need to crystal-gaze about what 2020 could be. They should use the year 2019 to build disruptive products and services for not just the urban middle class but also Bharat. To decide what to build, let’s look at what 2020 holds. UPI has made quick strides since its launch, with not just local banking majors, but global giants such as WhatsApp and Google having UPI-based apps. Money is now moving as messages. Data from the National Payments Corporation of India states that the UPI platform has seen 620.17 million transactions in December 2018 with more than INR 1 lakh crore transacted and has been consistently showing 20% growth.
UPI has already won the peer-to-peer payments game. In 2019, UPI 2.0 will set its eyes on taking over person-to-merchant (P2M) and offline PoS payments. With this UPI explosion, it won’t be a surprise if the number goes up to 50 billion transactions in 2020.Driving these offline payments will be QR Codes. Across India, QR codes are fast becoming ubiquitous and have also become a permanent fixture in neighborhood shops and with small merchants. These codes require minimum infrastructure investment which is conducive for mass adoption of digital payments.
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