On September 29, 2021, SBI announced that it has signed an agreement with three non-banking

finance company-microfinance ins tu ons (NBFCôMFIs) for co-lending to joint liability groups (JLGs).
278.23 332.46 407.11 470.74 470.61 - 50 100 150 200 250 300 350 400 450 500 2016 2017 2018
2019 2020 NBFC Public Funds (in US$ billion) Source: RBI, Microfinance Ins tu ons Network (MFIN)
Note: NBFC - Non-Banking Financial Company 16 Recent Trends and Strategies RECENT TRENDS AND
STRATEGIES 17 Recent Trends 4. NBFCs • NBFCs have served the non-banking customers by
pioneering into retail asset-backed lending, lending against securi es and microfinance. NBFCs aspire
to emerge as a one-stop shop for all financial services. • In July 2021, Rajya Sabha approved
Factoring Regula on (Amendment) Bill in 2020, enabling ~9,000 NBFCs to par cipate in the factoring
market. The bill also gives the central bank the authority to establish guidelines for improved
oversight of the US$ 6 billion factoring sector. 1. INSURANCE SECTOR • New distribu on channels
such as bank assurance, online distribu on and Non-Banking Financial Companies (NBFCs) have
widened the reach and reduced opera onal costs. • In November 2020, LIC took ini a ves to
facilitate quicker proposal comple on by launching a digital applica on – ANANDA. • India’s general
insurance market is expected to grow at a compound annual growth rate (CAGR) of 6.2% during
2019-2023. 1 2 3 4 3. DIGITAL TRANSACTIONS • Indian companies are strengthening their footprint
on foreign shores, enhancing geographical exposure. India's digital payment is es mated to increase
to US$ 1 trillion by 2023. • In the Union budget of 2022-23 India has announced plans for a central
bank digital currency (CBDC) which will be known as Digital Rupee. • The number of transac ons
through immediate payment service (IMPS) reached 482.46 million (by volume) and amounted to Rs.
4.66 trillion (US$ 57.05 billion) in October 2022. • In August 2021, Prime Minister Mr. Narendra Modi
launched e-RUPI, a person and purpose  specific digital payment solu on. • Digital payment
pla orms for rural India: – In August 2021, Neokred, an open banking stack that delivers curated
versions of issuance in the payment ecosystem, teamed with Virenxia, a provider of integrated and
sustainable solu ons for rural transforma on and development, to launch the ‘The Kisan Card,' a
special payment card for Indian farmers. 2. MOBILE WALLETS • As the RBI allows more features such
as unlimited fund transfer between wallets and bank accounts, mobile wallets will become strong
players in the financial ecosystem. • India's mobile wallet industry is es mated to grow at a CAGR of
148% to reach US$ 4.4 billion by 2022. • In November 2022, Unified Payments Interface (UPI)
recorded 7.30 billion transac ons worth Rs. 12.11 trillion (US$ 148.63 billion). Source: Capgemini,
Credit Suisse, Crisil, The Economist Intelligence Unit commissioned by payments company Visa 18
Strategies adopted….(1/2) 1 Innova on ▪ In the insurance industry, several new and exis ng players
have introduced innova ve insurance-based products, value add-ons and services. Few foreign
companies have also entered the domain, including Tokio Marine, Aviva, Allianz, Lombard General,
AMP, New York Life, Standard Life AIG and Sun Life. ▪ HDFC Capital Advisors Ltd has raised US$ 550
million for its second affordable housing fund, HDFC Capital Affordable Real Estate Fund-2 (H-CARE-
2), which will invest in affordable and mid-income and residen al projects in 15 ci es across India. 2
Merger and Acquisi on (M&A) ▪ The merger and acquisi on market lead to an all me high in 2021
and were mainly driven by first me buyers. India saw 85 startergic deals valued at more than US$ 75
million. ▪ In April 2022, HDFC bank and HDFC limited announced a transforma onal merger. ▪ In
2021, Priamal group completed the acquisi on of Dewan Housing Finance limited (DHFL) for US$ 4.7
billion. ▪ In 2021, Prosus acquired Indian payments gaint BillDesk for US$ 4.7 billion. 3 Stepped up IT
expenditure ▪ The explosion of mobile phones, uptake of technologies such as cloud compu ng and
rising pace of convergence and interconnec vity have led companies in the financial services
industry to ramp up investment in informa on technology (IT) to be er serve their end-customers.
Source: News Ar cles 19 Strategies adopted….(2/2) 4 Expanding geographical presence ▪ Indian
companies are strengthening their footprint on foreign shores, enhancing geographical exposure. ▪ In
April 2022, UPI went live in Neopay terminals across UAE. ▪ In September 2021, the interna onal
branch of the Na onal Payments Corpora on of India (NPCI), NPCI Interna onal Payments (NIPL),
has teamed with Liquid Group, a cross-border digital payments provider, to enable QR-based UPI
payments to be accepted in 10 countries in north and southeast Asia. ▪ In August 2020, the Na onal
Payments Corpora on of India (NPCI) has launched an interna onal arm—NPCI Interna onal
Payments (NIPL). The primary aim of NIPL will be to take its indigenously developed digital payment
products such as RuPay and UPI to a global level. 20 Growth drivers and opportuni es GROWTH
DRIVERS 21 Growth drivers in financial sector Source: NSE, News ar cles, Microfinance Ins tu on
Network, Boston Consul ng Group (BCG) Note: IT - Informa on and Technology 3 OTHERS ▪ In
January 2021, the Na onal Stock Exchange (NSE) launched derivates on the Ni y Financial Service
Index. This service index is likely to provide ins tu ons and retail investors more flexibility to manage
their finances. ▪ On December 02, 2020, the Interna onal Financial Services Centres Authority
(IFSCA) obtained membership to the Interna onal Associa on o