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) Dream Money Enters Wealth Tech Post-Gaming Ban

New App Launch:

• Dream Sports launched Dream Money, a wealth tech app for gold, fixed deposits, and spending tracking, per Moneycontrol.

• Shift follows Dream11’s halt of paid contests to comply with the 2025 Online Gaming Bill banning real-money games, per the article.  

Features and Partnerships:

• Offers gold SIPs from ₹10 via Augmont and fixed deposits from ₹1,000 with small finance banks (e.g., Suryoday, Shivalik) and NBFCs (e.g., Shriram Finance), per the report.

• Partners with Upswing for open finance and Sigfyn for AI-driven spending and investment tracking, per Moneycontrol.  

Why It’s Notable:

• Diversifies Dream Sports’ portfolio amid regulatory changes.

• Enhances personal finance access with low-entry investments.  

2) ICAI to Introduce Digital Audit Standards

Audit Framework Update:

• ICAI to roll out Information Systems Audit Standards for startups, fintechs, and e-commerce, per Economic Times.

• Standards address IT risks like cybersecurity, data breaches, and system failures, per Charanjot Singh Nanda.  

Broader Impact:

• Applies to all sectors due to growing tech adoption, ensuring compliance with DPDP Act and GDPR, per the article.

• Enhances CAs’ capabilities in fraud detection, IT governance, and ERP audits, per the report.  

Why It’s Notable:

• Strengthens audit quality for tech-driven businesses.

• Supports India’s booming startup and fintech ecosystem.  

3) Japan’s First Yen-Pegged Stablecoin Approved

Stablecoin Launch:

• JPYC to issue Japan’s first yen-pegged stablecoin in autumn 2025, backed by JGBs and savings, per Outlook Business.

• Targets institutional clients initially, with plans for broader domestic and global use, per Noritaka Okabe.  

Backing Model:

• Uses JGBs for stability, earning revenue from interest without transaction fees, per the article.

• Aligns with global stablecoin regulatory trends, per the report.

Why It’s Notable:

• Positions Japan as a trusted digital yen issuer.

• Offers a stable, low-risk digital asset for investors.  

B) Economic Highlights

1) Kissht IPO Targets ₹1,000 Cr Raise

IPO Filing:

• OnEMI’s Kissht filed a DRHP with SEBI for a ₹1,000 Cr fresh issue and 88,79,575 equity shares OFS, per IPO Central.

• Funds to boost Si Creva Capital’s lending capacity and general corporate purposes, per the filing.

Market Context:

• Targets India’s $350B digital lending market by FY26, focusing on underserved urban and semi-urban borrowers, per the article.

• Operates tech-driven personal and property loan platforms, per the report.

Why It’s Important:

• Scales lending for new-to-credit customers.

• Capitalizes on UPI-driven financial inclusion.  

2) Banks Bear ₹8,500 Cr UPI Costs

Cost Burden:

• Indian banks incur ₹8,500 Cr annually to maintain UPI infrastructure, while fintechs earn via lending, per Business Standard.

• Zero MDR forces banks to cover transaction processing, maintenance, and compliance costs, per Zeta’s report.  

Industry Dynamics:

• Fintechs leverage UPI for revenue, creating an imbalance with banks, per the article.

• Annual UPI operating costs estimated at ₹10,000 Cr, per industry sources.  

Why It’s Important:

• Highlights inequities in India’s digital payments ecosystem.

• Raises questions about sustainable UPI monetization.  

3) Kiwi Raises ₹200 Cr for Credit on UPI

Series B Funding:

• Kiwi to raise ₹200 Cr led by Vertex Ventures, with Stellaris and Nexus Venture Partners, per Lapaas Voice.

• Funds to scale Credit on UPI product and expand user acquisition in Tier-1 and Tier-2 cities, per the report.  

Growth Trajectory:

• Pioneered virtual credit cards linked to UPI, issuing 25,000+ cards after a ₹108 Cr Series A in 2023, per the article.

• Targets 500,000 users by 2024 in a 14B monthly UPI transaction market, per the report.

Why It’s Important:

• Boosts credit penetration in underbanked regions.

• Aligns with India’s cashless economy push.  

C) Business Developments

1) SBI Pushes for Homegrown UPI App

Strategic Proposal:

• SBI report urges a fully indigenous UPI app to leverage data and reduce reliance on foreign-influenced platforms, per Economic Times.

• PhonePe led with 8,931M transactions (₹12.20L Cr), followed by Google Pay (6,923M, ₹8.91L Cr) and Paytm (1,366M, ₹1.43L Cr) in July 2025, per the report.  

Market Concern:

• High concentration among foreign-influenced TPAPs like PhonePe and Google Pay limits India-centric fintech innovation, per the article.

• A “Desi Counter Intuitive App” is needed to align with India’s data-driven fintech needs, per SBI.  

Why It’s Notable:

• Enhances data control for digital lending and insurance innovation.

• Supports India’s long-term fintech sovereignty goals.  

2) CRED Partners for Co-branded Credit Card

New Product Launch:

• CRED collaborates with IndusInd Bank to launch its first co-branded credit card within three months, per Business Outreach.

• Expands beyond bill payments, adding features like rewards, cashback, and credit score tracking, per Entrackr sources.  

Market Context:

• Targets premium users with perks like lounge access, competing with SBI Cards, ICICI, and fintechs like Slice, per the article.

• CRED’s 13M monthly active users and ₹2,473 Cr FY24 revenue (up 66%) support its growth, despite a ₹1,644 Cr loss, per the report.  

Why It’s Notable:

• Positions CRED as a full-spectrum financial platform.

• Enhances IndusInd’s appeal to premium customers.  

3) Wise Platform Joins Google for US Remittances

Partnership Initiative:

• Wise Platform partners with Google to offer a remittance feature for US customers, integrated into Google Search, per Economic Times.

• Enables cost and timeline comparisons for transfers to India, Philippines, Brazil, and Mexico, per Lauren Langbridge.  

User Benefits:

• Allows transfers within search results, enhancing transparency with providers like Wise, Ria, and Xe, per the article.

• Overseen by Samarth Bansal for APAC growth, per the report.  

Why It’s Notable:

• Simplifies cross-border payments for US users.

• Boosts transparency in a sector criticized for hidden costs.  

D) Regulatory Insights

1) RBI Updates Counterparty Credit Risk Norms

Draft Circular:

• RBI’s draft revises Counterparty Credit Risk instructions, aligning add-on factors for Potential Future Exposure with BCBS guidelines, per RBI website.

• Clarifies banks’ capital charge for clearing equity and commodity derivatives on SEBI exchanges, per the draft.  

Key Changes:

• Updates Current Exposure Method for interest rate and exchange rate contracts, reflecting market depth since 2008, per the article.

• Public comments invited until September 10, 2025, via RBI’s Connect 2 Regulate, per the notification.  

Why It’s Important:

• Enhances capital adequacy for derivative transactions.

• Aligns India’s banking with global risk standards.  

2) RBI Fines Ayodhya Finlease ₹1 Lakh

Monetary Penalty:

• RBI imposed a ₹1L penalty on Ayodhya Finlease for non-compliance with NBFC directions, per RBI press release.

• Violation involves changing shareholding over 26% without prior RBI approval, per the August 14, 2025, order.  

Context:

• Penalty follows RBI’s review and a show-cause notice, upheld after the company’s response, per the article.

• Action targets regulatory deficiencies, not customer transactions, per the RBI.  

Why It’s Important:

• Reinforces compliance in the NBFC sector.

• Signals RBI’s strict oversight of ownership changes.  

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.