Latest news with #KunalVarma
News18
17-07-2025
- Business
- News18
UPI Chargeback Rules Changed: What It Means For Payment Platform Users
Last Updated: NPCI's new UPI chargeback rules, effective July 15, 2025, aim to enhance user experience and trust. The National Payments Corporation of India's (NPCI) newly introduced UPI chargeback rules, effective from July 15, 2025, are expected to significantly improve user experience and trust in the country's fast-growing digital payment ecosystem. With nearly 600 million UPI transactions occurring daily, the need for a streamlined and time-bound dispute resolution framework has become critical. A key change is the removal of the whitelisting requirement. Previously, if a user's chargeback request was declined—often because it exceeded the claim cap—banks had to approach NPCI for special approval via the UPI Reference Complaints System (URCS). Now, banks can directly mark genuine, earlier-declined chargebacks as eligible for reprocessing, cutting delays and manual dependencies. 'It's a necessary advancement in India's payment ecosystem," said Kishan Sundar, CTO of Maveric Systems. He noted the changes will drive upgrades in backend systems, including automated reconciliation and real-time dispute dashboards. Kunal Varma, CEO of Olyv, added, 'The process will now be less confusing and more trustworthy for users," as strict turnaround timelines give users clarity and recourse. Rohan Lakhaiyar of Grant Thornton Bharat highlighted that the chargeback changes address technical errors like double debits and fraud, which are increasing with rising UPI volumes. He emphasized that the strict TATs for issuing and acquiring banks will ensure disputes are handled efficiently. A chargeback allows UPI users to raise formal disputes when a transaction fails but money is debited. The URCS platform continues to be the core mechanism for managing these disputes, now with fewer hurdles. It aims at simplifying the chargeback process for those raised beyond the capping that were introduced in 2023. It will help foster confidence in the UPI payment system and allow users to raise legitimate chargebacks efficiently. Strict TAT mandates for acquiring and issuing banks for processing of chargeback request will ensure legitimate chargeback requests are resolved in a timebound manner and shall enhance trust in the system, Lakhaiyar added. view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Mint
16-06-2025
- Business
- Mint
How much debt is too much? India's EMI addiction gets too tempting to curb
'Zero cost EMI', 'Buy now, pay later' and 'Instant loan in 5 minutes' – walk into any Indian e-commerce app or fintech lending platform today, and you'll find these tempting offers staring back. What once was a rare financial tool has now become a lifestyle — and a trap. India is in the middle of a silent credit revolution. Fuelled by smartphone penetration, fintech innovation, and the promise of 'frictionless' borrowing, millions of young Indians are swiping their way into EMIs, micro-loans, and Buy Now Pay Later (BNPL) schemes without a second thought. But this revolution comes with a dark underbelly — one filled with hidden interest rates, app-based harassment, spiraling debt cycles, and long-term financial damage. In India's rapidly digitising economy, credit is no longer a privilege — it's a push notification. From buying smartphones to booking vacations, 'easy EMIs' have lowered the barrier for spending. BNPL platforms let users buy essentials (and non-essentials) with just an Aadhaar and PAN. This may sound empowering — and in many ways it is — but the ease of access also means ease of abuse. As Kunal Varma, Co-Founder and CEO of Freo, puts it 'The availability of easy EMIs and small-ticket credit has changed the way young Indians borrow money. But this better access to credit has also made it easier to borrow money without thinking, often without fully knowing how much it costs. Ease shouldn't mean sacrificing your long-term financial health." This psychological shift is subtle but powerful — credit feels less like a responsibility and more like a lifestyle extension. Even though the financial environment is easy, many customers do not know what they are getting themselves into. In the fine print, you may find hidden fees, requirements for your bank to auto-debit, late payment fees, and consequences for your credit score. A purchase of ₹ 10,000 with BNPL might look great, could quietly become a nightmare repayment of ₹ 14,000. Bhushan Padkil, SVP & Head, Direct‑to‑Consumer Business, TransUnion CIBIL, explains 'Opting for EMIs or Buy Now Pay Later plans can make purchases more manageable and accessible. However, it's important to know that lenders consider your total ongoing credit obligations and repayment patterns when evaluating your creditworthiness. By keeping a close eye on your repayment schedules and regularly reviewing your credit report, you can make the most of these options and build a strong foundation for long-term financial health.' Frequent borrowing may seem harmless, but it chips away at your creditworthiness. Miss a payment or max out your app-based credit line, and it could affect your chances of getting a home loan or even a job in the future. App-based lending can create an immediate dopamine response for many borrowers, especially Gen Z/young professionals who experience instant gratification with delayed consequences. Defaults unfortunately can lead to even greater pressure. Aggressive recovery tactics are not out of the ordinary: social media threats, public humiliation through access to someone's contact list, and ongoing harassment through continuous calling. There has been some intervention from regulatory bodies; however, enforcement is akin to whack-a-mole in terms of new apps appearing every other day. At its core, this is as much a psychological issue as it is financial. The gamification of credit against a backdrop of limited credit literacy may trigger uninformed decisions and unnecessary suffering. There is, however, a growing sense of responsibility among serious players in the fintech ecosystem. According to Rohit Mahajan, Managing Partner and Founder, plutos ONE, 'Fintech lenders are rapidly scaling, but long-term sustainability depends on ethical practices and borrower empowerment. Guided by RBI's digital lending framework, leading platforms are ensuring transparency through clear disclosures, consent-based data use, and fair interest rates.' This pivot — from hypergrowth to responsible innovation — is vital if the ecosystem wants to avoid a systemic collapse or a regulatory clampdown. The RBI has already taken note, issuing guidelines on digital lending, APR disclosures, and embedded finance practices. But the scale and speed of India's unsecured lending boom still pose a risk to the broader financial system. Kushal Rastogi, Founder & CEO of Knight Fintech, warns, 'India's credit ecosystem is evolving; banks are eager to deploy capital, while borrowers seek quick, fair access to funds. But true financial inclusion must be built on accountability. As regulations tighten around APR disclosures and risk controls, smarter, tech-enabled lending is the way forward. This shift is driven through embedded finance, co-lending frameworks, and UPI-based digital disbursements helping lenders serve new-age borrowers while maintaining control over risk, compliance, and how credit is used.' If left unchecked, today's credit boom could echo past bubbles — only this time, the damage may spread across millions of app-driven, under-informed borrowers. Before tapping, read: Know the interest rate, payback terms, and late charges before applying for any credit. Don't overwhelm yourself with credit: Even if you initially view several EMI purchases as harmless, these can accumulate quickly. Continuously monitor your credit: One missed payment, even if it is small, can really affect your credit score and your creditworthiness in the future. The loan industry in India has entered a tremendous transition that is empowering and risky. If you are not careful, what starts as a 'Buy Now' will quickly become a 'Cry Later.' The fintech revolution should be one that helps the masses, not traps them. It requires understanding, responsibility and thoughtful decisions in addition to regulations and technology. Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
Mint
01-06-2025
- Business
- Mint
Fintechs in talks with RBI for easier provisioning for default loss guarantee-backed loans
Mumbai: Fintech companies and digital lenders are seeking easier provisioning norms for loan pools backed by their guarantees, even as the central bank has flagged inadequate provisioning for these loans, according to five industry experts. Fintechs believe the provisioning variance is due to the differentiated interpretation of Ind-AS accounting standards, which allow for a 'risk mitigant' like Default Loss Guarantee to be considered while calculating the expected credit loss (ECL) provisions. Unified Fintech Forum and self-regulatory organisation Fintech Association for Consumer Empowerment (FACE), in their representiations to the Reserve Bank of India (RBI), have said that making full provisions against such loans will lead to 'double provisioning', with both the lending service providers (LSPs) like fintechs and regulated entities such as banks and non-bank lenders setting aside buffers for the same loan pool. Read more: RBI poised to cut rates as India eyes a steady takeoff Both the LSP and the regulated entities are provisioning for the same loan pool, thus impacting capital deployment efficiency, said Jatin Handoo, chief executive officer of UFF, formerly Digital Lenders' Association of India. It might also lead to a 'crowding out' effect where lenders will have less amount of money for lending because they have to take out the extra amount and provide for it separately, he said. 'RBI is open to listening to us and has asked us to come up with data-based use cases, and customer-level and market insights." Full provisioning by NBFCs Fintechs offer borrowers loans from multiple banks. These intermediaries usually provide a 'default loss guarantee' (DLG) to cover these loans for encouraging lenders to partner with them. However, in April, the central bank wrote to at least four non-bank lenders with high delinquencies in their DLG-backed loans. The regulator asked them to provide for all loan pools sourced through third-party digital platforms under the expected credit loss (ECL) accounting norms, regardless of whether these are backed by DLG arrangements. A senior industry official explained that if the loss on the loan pool was 7% and 5% was covered under a DLG arrangement, some NBFCs usually had a provision cover of 2-4%, depending on their internal modelling and calculations. Audits by RBI in January-February revealed this provision accounting, following which RBI reinforced that the entire provisioning has to be taken by the NBFC and any recoveries under DLG at the end of the loan tenure may be used to write-back the provisions. 'This is not a policy change, but a call-out for those NBFCs that were not doing enough provisioning. It's a prompt for NBFCs to appropriately provision against credit losses, and treat DLGs and recoveries separately," said Kunal Varma, chief executive officer and founder of digital non-banking finance company Freo. However, he said, this may lead to some NBFCs re-evaluating their First Loss Default Guarantee or FLDG-linked relationships in the short term. RBI's concerns stem from elevated delinquencies in some loan pools sourced by fintechs, leading to higher DLG payouts by them and a hit on the asset quality of a few partner NBFCs. Moreover, there have also been concerns around NBFCs using FLDG arrangements as an alternative to securitisation transactions, bypassing the guidelines of securitisation of loan pools. RBI's perspective seems to be that DLG arrangements were allowed to give capital comfort from a regulatory perspective and encourage 'skin in the game' for fintechs, but not dilute the accountability of underwriting by regulated entities. Point of contention Typically, each fintech—such as Paytm, PhonePe, MobiKwik—ties up with multiple regulated banks or NBFCs to offer multiple loan options to their customers. In turn, lenders can accept DLG arrangements in the form of cash deposits, fixed deposits with a lien marked in their favour, and bank guarantees. DLG arrangements for pools of small-ticket unsecured loans are generally used for consumption and lifestyle lending, emergency healthcare expenses, education finance for skill development or vocational degrees and diplomas, sustainable energy such as installing a solar roof and lending to small businesses and new-to-credit borrowers. Read more: How RBI is shaping the future of lending from Bengaluru's HSR Layout FLDG has been a point of contention since the first digital lending guidelines were issued in August 2022. Worried that these DLG loss absorptions were leading to inaccurate reflection of the credit quality of these borrowers, RBI in June 2023 issued the default loss guarantee framework, capping the value of such arrangements at 5% of the loan pool. It had then specified that regulated entities will be responsible for recognising non-performing assets of individual loans in the portfolio and the consequent provisioning as per current norms, regardless of any DLG cover at the portfolio level. Even then industry representatives had approached RBI seeking clarity on certain aspects of the guidelines such as treatment of NPAs given the differences with the ECL framework, and on the kind of different cohorts and structures that can be explored under the DLG framework. This had prompted RBI to issue an FAQ in November 2023 clarifying some of these aspects. However, these circulars were repealed when the consolidated Digital Lending Guidelines were issued on 8 May 2025, leading to some confusion on how provisioning for these loans may be interpreted. Fintech lenders believe that DLG is a form of credit guarantee or enhancement—the entire purpose of which is to provide capital comfort to the lender and help free up the lender's capital for additional on-lending. 'As per Ind-AS, NBFCs were considering the credit enhancement provided by an FLDG for purposes of computing the ECL on a loan portfolio (given that an FLDG qualifies as a credit enhancement intrinsic to the contractual terms of the arrangement, which is the requirement under Ind-AS 109)," said Shilpa Mankar Ahluwalia, partner, head-fintech, Shardul Amarchand Mangaldas & Co. RBI's 8 May directions, however, suggest that the amount of the DLG cover cannot be adjusted to reduce ECL computation, which could alter the cost-benefit to NBFCs given the zero-provisioning benefit of DLGs, according to experts who believe it could also send 'mixed signals" to market participants, investors and new entrants in the LSP space and may lead to the opinion that fintechs are not to be trusted. Read more: Lenders concerned about education loans as US tightens curbs on student visas Already, DLG rules only allow lien-marked deposits or bank guarantees, which practically removes any performance risk on such guarantees, said Ahluwalia. 'The industry also claims that capping the DLG at 5% had already prompted NBFCs to implement strong credit underwriting and risk tools, and removing the provisioning benefit of DLG cover may increase costs of digital loans and reduce credit access."
Mint
21-05-2025
- Business
- Mint
Freo Launches a First-of-Its-Kind Initiative to Help Indians Understand Health Insurance Before They Buy
HT Brand Studio Published 21 May 2025, 05:21 PM IST After simplifying credit for over 35 million users, Freo is now taking on a new challenge: making health insurance easy to understand for every Indian. Freo recently acquired its corporate agency license from IRDAI, and has now launched a full-fledged initiative to make health insurance simple, clear, and stress-free—so people can make smarter choices with of Indians still hesitate to buy insurance, not due to affordability, but due to a lack of clarity. Complex language, fear of sales traps, and uncertainty about coverage often push people insurance penetration stands at just 3.7% — far below the global average of 7%. Freo's research across cities revealed that 8 out of 10 people avoid insurance because they find it too complex or has become a trusted name in digital finance by helping over 35 million users across 1,200+ cities and 19,000 pin codes to borrow smartly, spend wisely, and grow their money. With products like instant credit, UPI payments, fixed deposits, and digital gold—all in one app—Freo has been helping people take control of their personal finances. Now, it's bringing that same clarity to insurance. Freo's new platform, is designed to break down how insurance works—in a way that's clear, simple, and easy to understand. It's available in English, Hindi, and will soon expand to several regional languages. Here's what makes it different: Clear Content: Insurance explained in plain language in Hindi and English; regional versions coming soon Insurance explained in plain language in Hindi and English; regional versions coming soon Interactive Learning: Real-life scenarios, FAQs, and tools to build understanding Real-life scenarios, FAQs, and tools to build understanding Personal Guidance: Tailored insights via the Freo app and Local insurance awareness drives in 50+ cities Partnerships with communities, NGOs, and schools to build grassroots understanding Kunal Varma, CEO & Co-Founder, said: "Most insurance platforms and brands in India are simply trying to push insurance sales. And while there is a need to expand coverage, there is a much bigger need to first help people understand the complexities behind health insurance. Insurance needs to be simplified, and it should empower people, not confuse them. Our goal, with this initiative, is to help every Indian make informed choices easily and confidently — and to provide a trustworthy platform." The pandemic reminded Indians of the need for financial protection. Since then, insurance demand has grown, along with costs. This year saw ₹ 1 lakh crore in premiums, 10% more than last year. Yet, it's not just about affordability. Lack of clarity is a bigger hurdle. As India moves toward the national goal of 'Insurance for All by 2047,' Freo is doing its part - through accessible, no-jargon insurance content - delivered in your language. Freo believes simplification is the key to mass adoption and aims to empower families to make informed, confident decisions about their health and money. Freo enables Indians to pay, save, borrow and insure, all through 1 platform. Freo serves customers across 1200+ cities and 19000 pincodes and is a well-regulated entity with licenses for lending, UPI and insurance sales. By focusing on regulated partnerships and customer-first design, Freo is building a trusted financial brand for the masses.
Business Upturn
21-05-2025
- Business
- Business Upturn
Freo Launches a First-of-Its-Kind Initiative to Help Indians Understand Health Insurance Before They Buy
By Business Wire Published on May 21, 2025, 13:41 IST Bangalore, Karnataka, India: After simplifying credit for over 35 million users, Freo is now taking on a new challenge: making health insurance easy to understand for every Indian. Freo recently acquired its corporate agency license from IRDAI, and has now launched a full-fledged initiative to make health insurance simple, clear, and stress-free—so people can make smarter choices with confidence. Millions of Indians still hesitate to buy insurance, not due to affordability, but due to a lack of clarity. Complex language, fear of sales traps, and uncertainty about coverage often push people away. India's insurance penetration stands at just 3.7% — far below the global average of 7%. Freo's research across cities revealed that 8 out of 10 people avoid insurance because they find it too complex or irrelevant. Freo has become a trusted name in digital finance by helping over 35 million users across 1,200+ cities and 19,000 pin codes to borrow smartly, spend wisely, and grow their money. With products like instant credit, UPI payments, fixed deposits, and digital gold—all in one app—Freo has been helping people take control of their personal finances. Now, it's bringing that same clarity to insurance. Freo's new platform, is designed to break down how insurance works—in a way that's clear, simple, and easy to understand. It's available in English, Hindi, and will soon expand to several regional languages. Here's what makes it different: Clear Content: Insurance explained in plain language in Hindi and English; regional versions coming soon Insurance explained in plain language in Hindi and English; regional versions coming soon Interactive Learning: Real-life scenarios, FAQs, and tools to build understanding Real-life scenarios, FAQs, and tools to build understanding Personal Guidance: Tailored insights via the Freo app and Coming soon: Local insurance awareness drives in 50+ cities Partnerships with communities, NGOs, and schools to build grassroots understanding Kunal Varma, CEO & Co-Founder, said: 'Most insurance platforms and brands in India are simply trying to push insurance sales. And while there is a need to expand coverage, there is a much bigger need to first help people understand the complexities behind health insurance. Insurance needs to be simplified, and it should empower people, not confuse them. Our goal, with this initiative, is to help every Indian make informed choices easily and confidently — and to provide a trustworthy platform.' The pandemic reminded Indians of the need for financial protection. Since then, insurance demand has grown, along with costs. This year saw ₹1 lakh crore in premiums, 10% more than last year. Yet, it's not just about affordability. Lack of clarity is a bigger hurdle. As India moves toward the national goal of 'Insurance for All by 2047,' Freo is doing its part – through accessible, no-jargon insurance content – delivered in your language. Freo believes simplification is the key to mass adoption and aims to empower families to make informed, confident decisions about their health and money. Freo enables Indians to pay, save, borrow and insure, all through 1 platform. Freo serves customers across 1200+ cities and 19000 pincodes and is a well-regulated entity with licenses for lending, UPI and insurance sales. By focusing on regulated partnerships and customer-first design, Freo is building a trusted financial brand for the masses. Disclaimer: The above press release comes to you under an arrangement with Business Wire. Business Upturn takes no editorial responsibility for the same. Business Wire is an American company that disseminates full-text press releases from thousands of companies and organizations worldwide to news media, financial markets, disclosure systems, investors, information web sites, databases, bloggers, social networks and other audiences.
