Fintech Companies - MUST READ

Happy Weekend everyone!

Today I am back with another weekly update for the Fintech Companies.

Covering updates in the regulatory or economic side of the Fintech market for Indian companies.

If you run a Fintech Company in India.

Or you plan on expanding your Fintech Company in India.

Then this becomes important for you.

Here are the main things that happened in the last week.

A) Emerging Trends

1) Paytm Subsidiary Secures IRDAI License Renewal

License Update:

• IRDAI renewed the insurance broking license of Paytm Insurance Broking Pvt Ltd (PIBPL), a wholly-owned subsidiary of One 97 Communications Ltd (Paytm).

• Valid from February 17, 2026, to February 16, 2029, under Direct (Life & General Insurance Broker) category.  

Market Reaction:

• Paytm shares closed 1.62% lower at ₹1,160.30; up 49.28% over the past year.

• Q3 FY26 showed net profit of ₹225 crore (vs. ₹208 crore loss YoY), revenue up 20% to ₹2,194 crore, EBITDA at ₹156 crore (7% margin).  

Why It’s Notable:

• Reinforces Paytm’s position in insurance distribution amid third consecutive profitable quarter.

• Highlights regulatory stability for its financial services ecosystem.  

2) Odisha Positions Itself as Emerging Fintech Investment Hub

Investment Projection:

• Odisha’s proposed fintech corridor expected to attract over $100 million (~₹800 crore) in investments within three years, per Sopnendu Mohanty (GFTN Group CEO).

• Aims to build structured ecosystem for startups, institutions, investors, and tech firms.  

Initiative Details:

• BharatNetra programme to connect 12–15 fintech firms for global market linkages.

• Focus on product innovation, cross-border partnerships, and capital access for scaling ventures.  

Why It’s Notable:

• Aligns with Odisha’s IT and emerging tech push; targets domestic and international financial services players.

• Success depends on policy support, execution, and institutional partnerships to drive sustained growth.  

B) Economic Highlights

1) Amit Shah Equates Digital Security to National Border Protection

Key Address:

• Union Home Minister Amit Shah stated cybercrime is a serious national security threat requiring coordinated real-time action across agencies, banks, and tech platforms.

• Inaugurated CBI’s new Cybercrime Branch and launched I4C’s State Cyber Crime Coordination Centre (S4C) dashboard.  

Digital India Achievements:

• Over 1 billion internet users; broadband connections up 16x in 11 years; BharatNet connected 2+ lakh panchayats.

• 181 billion digital transactions in 2024 worth ₹233 trillion; 97% transaction value and 99% volume digital.  

Cybercrime Response:

• I4C portal accessed 23 crore times since 2020; ₹8,189 crore frozen/returned from ₹20,000 crore fraud cases.

• Cancelled 12 lakh+ SIMs, blocked 3 lakh+ IMEIs, arrested 20,853 accused till December 2025.  

2) Care.fi Raises $8 Million for Healthcare Fintech Expansion

Funding Round:

• Gurugram-based healthcare fintech Care.fi raised $8 million Series A: $5 million equity (led by July Ventures, with Peak XV Partners, Accion Venture Lab, Sadev Ventures) and $3 million debt (Trifecta, Vivriti).

• Founded in 2021 by Sidak Singh and Vikrant Agrawal.  

Platform Impact:

• RevNow automates hospital billing, documentation, coding, claims, and collections; integrates with Ayushman Bharat and private insurers.

• Reduced discharge times from hours to 20 minutes; claims settled in 3–5 days; processed 1.5 lakh+ patient claims.  

Growth Plans:

• Team expansion from 250 to 750–850; taps ₹94,000 crore FY25 insurance payouts and 37 crore Ayushman Bharat cards.  

C) Business Developments

1) EPFO Introduces UPI-Based Direct EPF Withdrawals

App Launch Details:

• EPFO to roll out a new mobile app in April 2026 allowing members to withdraw EPF funds directly to bank accounts via UPI.

• Certain portion of EPF frozen; large chunk available for seamless transfer using linked UPI PIN.  

Service Enhancements:

• App will also provide passbook balance and other services; existing UAN portal and UMANG app remain available.

• Trials underway with 100 dummy accounts to ensure smooth functionality.  

Why It’s Notable:

• Eliminates time-consuming claim filing; builds on auto-settlement mode (raised to ₹5 lakh limit) for quicker access during illness, education, marriage, or housing needs.

• Aims to reduce EPFO’s burden from processing 5+ crore annual claims while improving accessibility for 8 crore members.  

2) FiMoney Shifts Focus to B2B Model

Strategic Pivot:

• Peak XV and Temasek-backed neobank FiMoney pivots to B2B, emphasizing deep technology, AI, and complex systems for startups and enterprises.

• Consumer business continues but with reduced emphasis; some products sunset and roles impacted.  

Leadership Statement:

• Founder Sujith Narayanan (ex-Google Pay co-founder) acknowledged lessons from bets that didn’t pay off, stressing long-term conviction.

• Affected employees to receive support during transition.  

Why It’s Notable:

• Reflects challenges in consumer neobanking (premium digital banking without branches); many peers pivoted to money management apps and co-branded cards.

• FiMoney raised $170M at ~$500M valuation; move prioritizes scalable B2B over consumer scale.  

3) PayU Rolls Out inFINity 3.0 Accelerator

Program Launch:

• PayU launched inFINity 3.0, its most comprehensive fintech accelerator for early-stage startups (raised <$5M, seeking seed to Series A).

• Four-week sprint focuses on Go-To-Market, compliance, scale, and investment readiness; culminates in 1.5-day Bengaluru Bootcamp and Demo Day.  

Key Benefits:

• Access to PayU’s payments solutions, merchant network, banking partners; mentorship from fintech leaders; up to $10,000 AWS credits.

• Partnered with Atrium Ventures for investor exposure and AWS as cloud partner.  

Why It’s Notable:

• Builds on prior editions (1,000+ applications); supports startups with pilots, distribution partnerships, and investor readiness.

• Applications open until March 6, 2026; aligns with PayU’s broader startup ecosystem support.  

4) Zell Education Teams with Recordent for Fintech Skills

Partnership Announcement:

• Zell Education partnered with Recordent to launch Fintech Immersion Program, equipping learners with credit risk, receivables management, and cash-flow analytics skills.

• Targets commerce/finance students, early-career professionals, and career switchers into fintech roles.  

Curriculum Focus:

• Covers digital payments/lending, credit infrastructure, compliance, embedded finance, and B2B/consumer case studies.

• Delivered by industry practitioners; successful participants receive co-branded certification.  

Why It’s Notable:

• Addresses gap between academic finance and real-world fintech operations; Recordent contributes curriculum, case studies, and use cases.

• Supports India’s fast-evolving fintech workforce needs.  

5) GFTN and SPF Partner for Global Fintech Growth

Alliance Formation:

• Global Finance & Technology Network (GFTN) and Startup Policy Forum (SPF) signed MoU at Black Swan Summit India 2026 in Bhubaneswar.

• Aims to foster policy engagement, ecosystem development, and cross-border growth for fintechs.  

Strategic Objectives:

• Structured dialogue between regulators and industry; support international expansion for high-growth Indian startups.

• GFTN (chaired by Ravi Menon) focuses on inclusive financial systems; SPF strengthens India’s startup policy framework.  

Why It’s Notable:

• Facilitates collaboration across regulators, innovators, and investors to build scalable digital financial future.

• Enhances India’s global fintech pathways through coordinated initiatives.  

D) Regulatory Insights

1) RBI Cancels Licence of Indian Mercantile Co-operative Bank

Licence Revocation:

• RBI cancelled licence of Indian Mercantile Co-operative Bank Ltd., Lucknow, on February 11, 2026, effective close of business February 13, 2026.

• Bank ceases banking operations; Uttar Pradesh Cooperative Commissioner requested to wind up and appoint liquidator.  

Reasons for Cancellation:

• Inadequate earning prospects; non-compliance with multiple BR Act sections; continuance prejudicial to depositors; public interest adversely affected.

• ~98.75% depositors eligible for full ₹5 lakh DICGC claim; ₹2.90 crore already paid as of December 31, 2025.  

2) RBI Amends Capital Market Exposure Directions

Final Amendments:

• RBI issued multiple Amendment Directions (2026) for commercial and small finance banks on credit facilities, concentration risk, capital adequacy, disclosures, and financial services undertaking.

• Incorporates stakeholder feedback from October 2025 drafts.  

Key Objectives:

• Enable financing for Indian corporate acquisitions; enhance limits for lending against shares/REITs/InvITs; remove ceiling on listed debt securities.

• Principle-based framework for lending to capital market intermediaries.  

3) RBI Drafts Amendments for Lending to REITs/InvITs

Draft Proposals:

• RBI issued draft Amendment Directions (2026) for commercial banks, small finance banks, and AIFIs on credit facilities, concentration risk, and disclosures.

• Permits banks to finance REITs with prudential safeguards, including exposure ceilings.

Harmonisation:

• Aligns existing InvIT lending guidelines with proposed REIT safeguards due to similar structures and risks.

• Comments invited until March 6, 2026.  

4) RBI Penalizes DCB Bank

Penalty Imposed:

• RBI levied ₹29.60 lakh penalty on DCB Bank Limited on February 6, 2026, for non-compliance with gold loan directions (non-agricultural end uses).

• Violation: Failed to maintain prescribed loan-to-value (LTV) ratio in certain accounts during tenure.  

Process:

• Penalty under Section 47A(1)(c) read with Section 46(4)(i) of Banking Regulation Act, 1949.

• Based on ISE 2025 inspection (March 31, 2025 position).  

5) RBI Drafts Recovery Agent Conduct Amendments

Comprehensive Instructions:

• RBI issued draft Amendment Directions (2026) for all banks and NBFCs on loan recovery conduct and recovery agent engagement.

• Covers fair borrower treatment, employee/agent conduct, due diligence, training, code of conduct.  

Public Feedback:

• Comments invited until March 6, 2026.

• Aims to standardize responsible recovery practices across regulated entities.  

6) RBI Drafts Marketing & Sales Amendments

New Guidelines:

• RBI issued draft Amendment Directions (2026) for banks and NBFCs on advertising, marketing, and sales of financial products/services (including third-party).

• Addresses DSA/DMA activities, dark patterns, mis-selling prevention.  

Related Changes:

• Amends Undertaking of Financial Services Directions for agency business/referral services.

• Comments invited until March 4, 2026.  

I hope this was useful to you guys working in the Fintech Space.

The fintech space is everchanging, so staying up to date with information will help you make smart decisions for your business.

Again, If I see any notable changes or updates on the Fintech Side during the week, that can help Fintech Companies, I will compile them.

And then share them on the weekends!

Btw - I run a legal firm that's a one-stop solution for Fintech Companies in India.

Whether you are starting out in India, or expanding to the Indian market, DM 💬 me if you need legal help with:

1) Business Registration

2) Contract Drafting or Review

3) Compliance

4) Answering any legal questions

See you tomorrow with another Newsletter now.