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Month: August 2025

BFSI

Consumers Continue to Trust Banks Over Payment Apps for Core Financial Products, FIBAC Survey Shows

Observenow Desk August 29, 2025

Despite the growing popularity of digital convenience, a recent FIBAC-backed 2025 consumer survey of over 5,000 respondents highlights that Indian users remain cautious when it comes to purchasing core financial products through non-bank apps. While platforms like PhonePe, Google Pay, WhatsApp, and even YouTube are praised for their user-friendliness, trust remains a significant barrier. Consumers are generally unwilling to buy complex products—such as loans, credit cards, investment plans, or insurance—from these apps, opting instead to rely on traditional banks. The only exception where consumers showed willingness to transact via non-bank apps was basic savings accounts.

The survey also sheds light on internal challenges faced by banking apps. According to benchmarking by BCG’s Digital 360°, private banks outperformed public sector banks in digital product application and fulfillment processes, but both segments lag behind global standards. Private banks scored higher on marketing engagement (41 vs. 16 percent), product application processes (43 vs. 20), and assisted sales support (25 vs. 21). This underscores an urgent need for banks to simplify application procedures, offer remote processing, and deliver real-time support across channels.

To truly win over consumers, banks must invest in capabilities like pre-filled application forms, straight-through processing, hyper-personalized recommendations, and proactive re-engagement strategies when users abandon the process. The objective is to raise digital adoption by delivering seamless, end-to-end experiences that match or exceed expectations set by tech-first platforms.

In summary, while Indian consumers’re increasingly comfortable with digital interfaces for basic services, deep reliance remains on traditional banking institutions for more significant financial commitments. Banks must close the experience gap with non-bank apps to retain and grow customer trust in this evolving digital ecosystem.

Tags: FIBAC-backed 2025

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BFSI

ED Arrests Businessman Over ₹117 Crore Canara Bank Fraud

Observenow Desk

The Enforcement Directorate (ED) has arrested businessman Amit Ashok Thepade from a luxury hotel in South Mumbai in connection with a massive ₹117 crore fraud against Canara Bank. The arrest followed weeks of surveillance after he had been evading authorities for nearly two months.

Investigations revealed that two companies controlled by Thepade—Galaxy Constructions & Contractors Pvt Ltd and Mitsom Enterprises Pvt Ltd—secured bank loans by mortgaging properties that were either already sold or previously pledged with other lenders. This fraudulent arrangement allegedly allowed the firms to siphon off large sums while leaving the bank exposed to significant losses.

As part of the crackdown, the ED froze over 50 bank accounts linked to the accused and seized assets including ₹9.5 lakh in cash, jewellery worth around ₹2.3 crore, two luxury vehicles, and multiple digital devices suspected of containing crucial financial data. Officials stated that these measures were necessary to prevent further diversion of funds and to preserve evidence for trial.

The case was presented before a special court and has been remanded to ED custody for five days under the Prevention of Money Laundering Act. During this period, investigators aim to uncover the full scale of the fraud, trace additional beneficiaries, and identify possible accomplices.

Preliminary findings suggest that Thepade employed layered financial transactions to disguise the true origin of funds, a tactic often used in money laundering operations. Authorities believe that these methods were deliberately designed to make the money trail difficult to detect.

This case highlights the ED’s continued efforts to strengthen accountability within the banking sector and to act against financial crimes that jeopardize public funds. Further inquiries are underway to recover additional assets and hold all responsible parties to account.

Tags: Amit Ashok ThepadeCanara BankEnforcement Directorate

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BFSI

Punjab National Bank Launches India’s First Full-Fledged Startup-Centric Branch in New Delhi

Observenow Desk

Punjab National Bank (PNB) has inaugurated its first dedicated startup-centric branch in New Delhi, marking a significant milestone in efforts to empower India’s entrepreneurial ecosystem. Located at Bhikaji Cama Place, the branch aligns with the Government’s Startup India initiative and offers tailored, end-to-end banking services designed specifically for startups and innovators.

As part of the launch, PNB signed a Memorandum of Understanding (MoU) with the Software Technology Parks of India (STPI). Under this agreement, STPI will provide curated lists of incubated and graduated startups to PNB, helping the bank directly engage with promising ventures and offer customized financial solutions suited to their growth journey.

At the inauguration, PNB’s MD & CEO Ashok Chandra highlighted that the new branch will act as a one-stop solution for entrepreneurs, offering access to credit, advisory support, and financial literacy services. He emphasized the bank’s commitment to supporting startups as they scale, noting that traditional banking models must evolve to cater to the unique needs of young businesses. Arvind Kumar, Director General of STPI, echoed this view, stressing the importance of integrating banking with ecosystem enablers to bridge financing gaps for startups.

PNB also announced that this initiative is the first step in a broader strategy to replicate such specialized branches in other startup hubs across India. The vision is to build a nationwide network of dedicated branches that will strengthen financial access, build trust, and foster innovation in the country’s rapidly growing startup ecosystem.

This move by PNB reflects a shift in India’s public banking sector, where legacy institutions are now stepping up to play a more active role in enabling entrepreneurship and driving the innovation economy.

Tags: Punjab National Bank

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BFSI

Foreign Investment Gains Momentum in Indian Banking as LIC Reclassified and SMBC Expands

Observenow Desk

India’s banking sector is witnessing a new wave of foreign investment opportunities as regulators take steps to liberalize ownership structures. A key development came when the Securities and Exchange Board of India approved the reclassification of the Life Insurance Corporation of India (LIC) from a promoter to a public shareholder in IDBI Bank. This change is designed to facilitate the government’s strategic divestment in the lender while making room for global investors. Under the new framework, LIC will limit its voting rights to 10 percent, give up board representation, and reduce its stake to 15 percent or lower within two years, creating space for potential investors such as Emirates NBD and Canada’s Fairfax to consider strategic acquisitions.

At the same time, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has received clearance from the Reserve Bank of India to acquire up to 24.99 percent in Yes Bank. This marks the largest foreign equity infusion in India’s banking industry to date. Notably, SMBC will not be classified as a promoter, which allows it to avoid the regulatory obligations that typically accompany such status, while still gaining substantial influence in the bank’s operations.

Together, these moves reflect a carefully calibrated shift in India’s stance toward foreign participation in its banking sector. For years, ownership rules had restricted overseas equity and deterred large-scale international involvement. The recent steps show regulators are now open to selective but significant relaxations in order to attract capital, strengthen governance, and bolster competitiveness.

The reclassification of LIC’s role in IDBI Bank and the landmark SMBC approval are signals that India’s financial system is entering a new era. By opening doors to global investors, the country aims to infuse its public and private lenders with fresh resources, stronger oversight, and greater resilience for the future.

Tags: Life Insurance Corporation of IndiaSMBC

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BFSI

Government Appoints Goldman Sachs to Lead Stake Sale in Four Public Sector Banks

Observenow Desk

The Government of India has appointed Goldman Sachs as the exclusive transaction advisor for its planned divestment in four public sector banks: Indian Overseas Bank, Central Bank of India, UCO Bank, and Punjab & Sind Bank. With the government currently holding over 90 percent ownership in each of these institutions, the move represents a crucial step in the broader disinvestment program aimed at enhancing efficiency and competitiveness in India’s banking sector.

In this role, Goldman Sachs will assist in structuring the transactions, identifying potential investors, and ensuring smooth execution of the stake sales. The divestment process will not only support the government’s privatization goals but also help these banks comply with the minimum public shareholding norms mandated for listed entities.

The stake sale is expected to be carried out in phases beginning in fiscal year 2025–26 and may span two to three years. Initial plans suggest that the government could offload around five percent in each of the four banks in separate tranches, inviting greater market participation and strengthening the operational performance of these state-run lenders.

The initiative also ties into regulatory requirements under the Minimum Public Shareholding guidelines, which require listed companies to maintain at least 25 percent public ownership. While public sector banks currently enjoy temporary relief from these norms until August 2026, the government may seek an extension depending on the pace of divestment.

This effort is part of a larger reform agenda by the Department of Investment and Public Asset Management, which is overseeing multiple disinvestment and privatization initiatives across state-owned enterprises. By bringing in Goldman Sachs, the government signals its determination to strengthen governance, attract fresh investment, and improve the overall financial health of India’s public-sector banking system.

Tags: Goldman Sachsgovernment of india

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BFSI

RBI Orders Banks to Heighten Scrutiny of Indirect Fund Flows from Pakistan

Observenow Desk

The Reserve Bank of India (RBI) has issued a rare directive to Indian lenders, calling for enhanced scrutiny of financial transactions that may be routed indirectly from Pakistan. The move comes amid rising national security concerns, with authorities worried that such funds could be linked to arms financing.

According to officials familiar with the directive, the central bank has identified Pakistan as a “high-risk” jurisdiction for arms-related funding. While direct transactions from Pakistan already require RBI clearance, the concern now extends to indirect routes, where funds are moved through third countries before reaching India. Regulators fear this could create gaps in oversight and allow suspicious capital flows to bypass monitoring systems.

The RBI’s alert follows heightened security assessments earlier this year, particularly after investigations into a border clash revealed the possibility of funds entering India from Pakistan through disguised channels. By tightening its checks, the central bank aims to ensure that Indian lenders detect, flag, and report any questionable activity tied to high-risk jurisdictions.

This development also aligns with findings from the Financial Action Task Force (FATF), which recently highlighted sanction breaches by Pakistani entities. One case underlined how state-linked organizations attempted to conceal sensitive imports, raising international concerns about Pakistan’s compliance with global financial standards. North Korea was also mentioned alongside Pakistan in the RBI’s high-risk advisory.

In response, Pakistani banking authorities rejected the concerns as politically motivated and emphasized their compliance with international anti-money laundering and counter-terrorism frameworks. Despite these denials, India’s regulatory stance underscores a commitment to safeguarding its financial system from being misused for defense-related or illicit activities.

The RBI’s decision signals a clear message: Indian banks must remain vigilant, as financial security is now an integral part of national security.

Tags: RBIReserve Bank of India

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Exclusive

Google Launches “Nano Banana” Gemini 2.5 Flash Image Upgrade to Enhance AI Editing Experience

Observenow Desk

Google has unveiled its latest advancement in AI-driven creativity with the release of Gemini 2.5 Flash Image, a feature upgrade affectionately nicknamed “Nano Banana.” Integrated within the Gemini app, the update promises smoother and more precise image generation and editing, reflecting Google’s ambition to make AI-powered visual tools more versatile and user-friendly. With this release, users can refine AI-generated visuals with greater consistency across multiple iterations, reducing the common problem of fluctuating details between edits.

The upgrade allows users to carry out more intuitive modifications, whether adjusting subtle features, changing background elements, or ensuring continuity in appearance when producing a series of images. Google emphasized that the feature is particularly valuable for creators, designers, and everyday users who want AI support that feels seamless and reliable. By improving editing precision, the company hopes to encourage broader adoption of its AI ecosystem, bridging the gap between professional creative workflows and casual experimentation.

Industry observers note that the rollout of “Nano Banana” comes at a time when competition in the AI visual generation space is intensifying. With rivals like OpenAI and Anthropic enhancing multimodal capabilities, Google is seeking to differentiate its Gemini platform by offering both performance and usability. The lighthearted nickname attached to the update underscores Google’s effort to make advanced AI features approachable while maintaining a focus on technical depth.

Beyond image editing, Gemini 2.5 Flash Image reflects Google’s broader strategy of embedding AI across its suite of products. By offering tools that prioritize accuracy and consistency, the company aims to win the trust of users who require dependable outputs for creative, commercial, or personal projects. “Nano Banana” marks another step in Google’s mission to democratize AI tools, making them accessible, efficient, and engaging for diverse audiences.

Tags: GoogleNano Banana

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Technology

Techno Digital Opens $175 Million AI-Ready Data Centre in Chennai to Drive India’s Digital Infrastructure

Observenow Desk

Techno Digital, a subsidiary of Techno Electric & Engineering, has inaugurated a 36 MW hyperscale AI-ready data centre at SIPCOT IT Park in Chennai, backed by a committed investment of $175 million. The 200,000 square foot facility represents the company’s first major step in its $1 billion plan to establish a nationwide network of hyperscale and edge data centres. Designed for scalability and efficiency, the new facility is equipped to meet the surging demand for artificial intelligence computing and cloud services across India.

The state-of-the-art centre can accommodate up to 2,400 high-density racks and is supported by advanced infrastructure, including adiabatic cooling systems, an on-site gas-insulated substation, and robust power management solutions. These features not only enhance reliability but also ensure energy efficiency, reflecting the industry’s shift toward greener and more sustainable digital operations. By integrating such innovations, Techno Digital aims to provide enterprises, hyperscalers, and government organizations with a resilient platform to deploy AI workloads and other high-performance applications.

Executives at Techno Digital highlighted that the facility’s launch underscores India’s growing importance as a hub for digital infrastructure investment. With the rapid adoption of AI, cloud computing, and 5G technologies, demand for hyperscale data centres is accelerating, and Chennai has emerged as a strategic location due to its connectivity and industrial ecosystem. The facility will serve as a cornerstone for Techno Digital’s expansion, ensuring customers gain access to scalable solutions capable of handling future workloads.

Industry analysts view the investment as timely, with global cloud and AI infrastructure spending expected to surge in the next decade. By committing to sustainable and technologically advanced centres, Techno Digital positions itself as a key enabler of India’s digital transformation, bridging enterprise needs with the country’s long-term vision of becoming a global AI powerhouse.

Tags: Digital InfrastructureTechno Digital

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Technology

Capgemini to Acquire Cloud4C to Strengthen Hybrid Cloud and AI Offerings

Observenow Desk

Global technology consultancy Capgemini has announced plans to acquire Cloud4C, a Singapore-based managed cloud services provider with roots in India. The acquisition marks a strategic move to reinforce Capgemini’s hybrid cloud capabilities, enhance AI-powered automation, and expand its expertise in SAP solutions. By bringing Cloud4C under its umbrella, Capgemini intends to deliver more industry-focused, scalable, and secure cloud offerings to its global client base, while deepening its presence in the fast-growing Asia-Pacific region.

Cloud4C has built a reputation as a trusted partner for enterprises navigating complex digital transformations, with services spanning hybrid cloud management, cybersecurity, and compliance. Its specialization in regulated industries such as banking, healthcare, and manufacturing makes it a strong fit for Capgemini’s vision of delivering tailored technology solutions that address sector-specific challenges. The acquisition will also enable cross-selling opportunities, allowing both firms to leverage their customer networks and expand into new markets.

For Capgemini, the deal aligns with its broader strategy of accelerating digital innovation while addressing the growing demand for resilient and secure cloud infrastructures. Industry analysts note that enterprises worldwide are moving toward hybrid cloud models, combining public and private cloud resources to balance flexibility with data security. Cloud4C’s experience in managing complex multi-cloud environments and ensuring compliance with local regulations adds significant value to Capgemini’s service portfolio.

Executives at Capgemini highlighted that the integration of Cloud4C’s teams and expertise will strengthen delivery capabilities across geographies, enabling clients to adopt emerging technologies more effectively. With AI-driven automation becoming central to modern cloud strategies, the partnership is expected to create new efficiencies while improving time-to-market for businesses. This acquisition underscores Capgemini’s commitment to staying at the forefront of cloud and AI transformation, positioning itself as a key partner for enterprises in their digital journeys.

Tags: CapgeminiCloud4C

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Technology

HCLTech Emphasizes AI as a Tool to Enhance Jobs, Not Replace Them

Observenow Desk

HCLTech chairperson Roshni Nadar Malhotra has reassured stakeholders that artificial intelligence will serve as an enabler rather than a threat to jobs within the company. Speaking at the annual general meeting, she described AI as a “co-pilot” designed to support employees in their roles, helping them to work more efficiently and focus on higher-value tasks. Her comments come at a time when concerns about automation and job displacement are intensifying across industries, with global debates questioning how far AI might reshape the workforce.

Nadar explained that HCLTech is committed to a strategy of responsible adoption, where AI tools are integrated to improve productivity while simultaneously preserving the human element of work. Rather than replacing employees, the company is focusing on reskilling and upskilling programs that prepare its staff for the demands of a technology-driven future. She emphasized that this approach will allow workers to transition into more strategic, creative, and problem-solving roles, ensuring long-term career growth while aligning with the evolving needs of clients.

The company has already rolled out several initiatives aimed at enhancing workforce readiness, including training programs in data analytics, cloud services, cybersecurity, and AI application development. These efforts are designed to ensure that employees can complement automated systems rather than compete with them. Nadar noted that human judgment, empathy, and contextual decision-making remain irreplaceable, even as AI continues to advance.

Industry observers see HCLTech’s stance as part of a broader trend among Indian IT giants to balance technological disruption with social responsibility. By promoting AI as a collaborative partner, the company is sending a clear signal that it values human capital as central to its growth. The strategy reflects both a pragmatic and ethical commitment to shaping a future where technology empowers rather than displaces.

Tags: HCLTechRoshni Nadar Malhotra

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