SEPTEMBER 20248RBI TO UNIFY ONLINE &OFFLINE LICENSING FOR PAYMENT AGGREGATORSSHRIRAM FINANCE TO RAISE USD 1.5B FROM INTERNATIONAL SOURCESThe Reserve Bank of India (RBI) is set to streamline the licensing process for payment aggregators by consolidating the requirements for both online and offline entities. K. Vijayakumar, General Manager of DPSS RBI, announced this shift during the Global Fintech Fest, emphasizing the regulator's aim Indian non-banking lender Shriram Finance is planning to raise up to $1.5 billion from international markets during the current fiscal year as part of its strategy to diversify its borrowing sources. Y S Chakravarti, CEO and Managing Director of TOP STORIESthe company announced this target, indicating that the funds will be raised through a mix of loans and bonds.This move comes in response to a recent directive from India's central bank, which required lenders to allocate more capital against loans extended to non-banking financial companies (NBFCs) like Shriram Finance. This regulatory change has increased the cost of raising funds domestically, prompting the company to seek capital from overseas sources.Shriram Finance is the country's one of the biggest retail NBFCs offering credit solutions for commercial vehicles, two-wheeler loans, car loans, home loans, gold loans, and personal and small business loans. They are part of the 49-year-old Shriram Group, a financial conglomerate that has emerged as a trusted partner in creating transformative experiences and lasting impressions in customers' lives.In November 2022, Shriram Group's entities ­ Shriram Transport Finance Company Limited, Shriram City Union Finance Limited, and Shriram Capital Limited ­ merged to form Shriram Finance Limited. As of June 30, 2024, with a network of 3,095 branches and a workforce of 75,813, Shriram Finance has combined Assets Under Management (AUM) worth 233,443 crores. to issue a unified license for payment aggregators that would cover both online and offline operations.Vijayakumar explained that as the distinction between physical and online spaces diminishes, a single license will allow payment aggregators to operate seamlessly across both domains. The regulator is also prioritizing the security of payment transactions, stressing that innovations by merchants and payment service providers must adhere to customer assurance and transaction authentication standards from the outset.Additionally, Vijayakumar highlighted the RBI's efforts to integrate Aadhaar-enabled Payment Systems (AePS) with existing Point of Sale (POS) machines to boost financial inclusion in rural areas. This move aims to lower costs and increase transaction volume among merchants, particularly in areas with limited connectivity. The RBI, which stands for the Reserve Bank of India, is India's main regulatory body in charge of overseeing the country's banking system. It is under the ownership of the Ministry of Finance, Government of India, and is tasked with overseeing the control, issuance, and maintenance of the Indian rupee.
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