Fintech Brief — August 09, 2026
RBI Proposes Barring NBFCs from Revolving Credit — Flexi Loans Under Threat
The Reserve Bank of India has released draft amendments to its Credit Facilities Directions, 2026, proposing to restrict non-banking financial companies (NBFCs) to term loans only — effectively banning revolving credit facilities. If finalised, this would eliminate flexi-loans, overdraft-style facilities, and digital credit lines that have become staples of NBFC-fintech partnerships.
The proposal builds on the Credit Facilities Directions issued in November 2025 and aims to create sharper structural distinctions between loan products. The RBI has invited stakeholder comments by August 28, 2026.
Why it matters: Revolving credit is the backbone of many digital lending products — buy-now-pay-later, personal credit lines, and fintech-adjoint NBFC lending all rely on the revolving structure. A ban would force a fundamental product redesign across the sector, particularly hitting fintechs that originate loans through NBFC partners.
Source: KNN India
Government Clarifies: UPI Remains Free for Consumers and Small Merchants
The government moved to quell speculation about UPI charges, confirming that ordinary users will continue to pay zero fees, and the “vast majority” of merchant transactions will also remain free. The clarification follows weeks of public debate after the Payments Council of India (PCI) publicly backed merchant discount rates (MDR) on UPI to sustain investment in the payments backbone.
The ₹1,500 crore incentive allocation for FY 2025-26 remains in place to support the UPI ecosystem. MDR, if any, would apply only to specific merchant categories — not to peer-to-peer or small-merchant transactions.
Why it matters: UPI processes over 14 billion transactions monthly. Any whiff of consumer charges triggers political backlash, as seen this week across social media. The government’s clarification is aimed at stabilising sentiment, though the structural debate around who funds UPI’s infrastructure is far from resolved.
Source: The Hindu
Indian Startup Funding Jumps 4.7x to $383.5 Mn This Week
Startup funding roared back after a quiet spell — 28 Indian startups raised nearly $383.5 million across 5 growth-stage and 21 early-stage deals in the week of August 3-8, a 4.7x jump from the previous week’s $82.2 million. Entrackr’s weekly tracker also recorded 3 M&A deals and 2 fund launches.
Notable fintech raises:
| Startup | Amount | Stage | Investors |
|---|---|---|---|
| InRisk Labs | $27 Mn | Series A | Bessemer Venture Partners, Northpoint Capital |
| GetVantage | $6.6 Mn | Series A | Rajeev Ahuja (ex-RBL Bank MD), Chiratae Ventures |
On the M&A front, Times Network acquired fintech startup OpiGo for an undisclosed amount to strengthen ET NOW’s investor-focused financial services. Mintoak acquired ICC Loyalty to expand internationally.
RBI Tightens Bank Cybersecurity Framework
The RBI issued consolidated Department of Supervision (DoS) master directions for commercial banks, significantly expanding the cybersecurity and technology resilience framework. Key additions include mandatory anti-phishing service subscriptions, expanded IT Sub-Committee (ITSC) oversight over IT capacity, and new requirements for monitoring environmental controls (temperature, smoke, access) at data centres.
The directions, effective from July 31, 2026, also mandate banks to establish a dedicated Cyber Security Operations Centre (CSOC) and broaden the definition of cyber incidents requiring reporting.
Source: Vinod Kothari