9 FINANCEOUTLOOKINDIAJULY, 2026RBI'S FINANCIAL INCLUSION INDEX RISES TO 70 IN FY26SBI FUNDS MANAGEMENT IPO SUBSCRIBED 41.66 TIMES ON FINAL DAYMSCI INDIA REBALANCING COULD DRIVE $2.3 BILLION IN PASSIVE INFLOWSINDIA'S FINTECH FUNDING H1 2026 HITS $2 BILLION, UP 42% YOYGOVT MULLS SUB-0.5% MDR ON UPI PAYMENTS ABOVE RS 2,000The Financial Inclusion (FI) Index of the Reserve Bank of India (RBI) stood at 70 for the financial year ended March 2026, up from 67 in March 2025, mainly on account of an uptick in usage. The index also recorded growth across all sub-indices.The FI Index was introduced in 2021 to capture the extent of financial inclusion across the country through three broad parameters -Access (35%), Usage (45%), and Quality (20%) - each comprising various dimensions computed from a number of underlying indicators. It is a comprehensive index incorporating details of the banking, investment, insurance, India's fintech funding H1 2026 totalled $2 billion across 106 rounds, a 42% rise from the $1.4 billion raised across 186 rounds in H1 2025, according to data from market intelligence platform Tracxn. In a sequential comparison, the investment in fintech increased significantly with almost doubling from $1.1 billion in 120 rounds in H2 2025, indicating a significant uptick in the investment momentum in fintech for 2026.The largest cap-to-date transaction was in H1 2026 when Cred raised $900 million in a Series H financing round, followed by Weaver's $156 million Series D financing and KreditBee's $220 million Series E financing round. The government is considering introducing a merchant discount rate (MDR) on UPI payments made to large merchants. The fee may be set below 0.5% and apply to transactions above Rs 2,000. MDR is a fee charged by banks for processing real-time digital transactions. "This is the proposal being considered by the government right now, and a decision on the same is expected within two weeks," a senior government source said, adding that the MDR will be levied only on large merchants and businesses.The proposal does not involve charging consumers for using UPI. "The MDR is not about charging consumers for UPI transactions. The discussion is around merchant-side economics and sustainability of the payments ecosystem," the source said. According to officials, UPI has expanded rapidly, but the cost incurred by banks and other payment ecosystem participants in maintaining the underlying infrastructure is also rising. There is a view that the model has to be commercially sustainable over time. The Rs 9,813 crore initial public offering (IPO) of SBI Funds Management, India's largest asset management company, was subscribed 41.66 The upcoming MSCI India rebalancing could drive estimated passive inflows of about $2.3 billion into Indian equities, with as many as 12 inclusions and three exclusions likely in the August review cycle, according to a report by JM Financial Research.The changes are scheduled to be announced after market hours on August 12 and implemented from August 31, and are expected to significantly alter the index composition, triggering fund flows from global passive investors tracking MSCI benchmarks.Among the potential entrants, Adani Green Energy, Adani Energy Solutions, and investment platform Groww (Billionbrains Garage Ventures) have emerged as high-probability candidates for fresh inclusion. The brokerage estimates that Groww's addition could bring passive inflows of $821 million, while those for Adani Green are estimated at around $773 million. postal, and pension sectors, developed in consultation with the government and respective sectoral regulators. times on the final day of bidding, driven by overwhelming demand from qualified institutional buyers (QIBs). According to exchange data, the IPO received bids for 518.93 crore equity shares worth Rs 2.98 lakh crore against 12.45 crore shares on offer, attracting 63.76 lakh applications across investor categories. The QIB portion emerged as the biggest driver of demand, garnering 140.11 times subscription. The non-institutional investor (NII) category was subscribed 22.51 times, while the retail individual investor (RII) portion was booked 3.59 times. The employee quota received 4.65 times subscription, while the shareholder reservation portion was subscribed 9.52 times.
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