Tag: india

  • Revolut doubles down on India expansion

    Revolut doubles down on India expansion

    Revolut has long had its eyes on India, the world’s largest remittances market and the country in Asia where its growth prospects are most promising. The UK fintech unicorn first entered India five years ago and has been gradually beefing up local operations.

     Revolut’s India foray now looks set to kick into high gear—but not from a customer standpoint, at least not yet. Rather, the company announced in late March that it will base about 40% of its global workforce in India by the end of 2026, expanding its global capability center with 1,600 new hires that will increase its total headcount in the subcontinent to 5,500.

    This move follows Revolut pledging last October to invest US$670 million in India over five years. “India is a critical market as we see ourselves becoming a truly global bank. We’re taking a long view on all the critical markets we enter. We’re very optimistic about the growth in India and the future success point. So, we want to build for that future,” group chief banking officer Siddhartha Jajodia told India’s Economic Times.

    If all goes smoothly, the India hub could really become the heart of innovation for Revolut—think of it as an engine driving cost efficiency and managing global processes for the firm. This might help Revolut roll out new products faster across the globe. Yet there could be some bumps along the way: regulatory changes, fierce competition for talent, or challenges in syncing operations in India with other markets. If things don’t go as planned, the UK neobank could end up facing delays in product launches or operational hiccups.

    From a customer standpoint, India offers Revolut some of its best opportunities for growth among emerging markets. And Revolut’s India leadership has been vocal about the company’s ambitions in the subcontinent, which are somewhat modest by its standards. An Oct. 2025 Tech Crunch article noted that Revolut is targeting about 150 million Indians in the long run, with plans to sign up about 20 million as customers by 2030 and process US$7 billion of their transactions.

    Revolut India CEO Paroma Chatterjee has called the high foreign exchange fees Indian banks charge their customers “criminal”—an interesting way to put it.

    That description may reflect frustration. Revolut feels restricted in India from the type of torrid expansion for which it is best known. It does hold approvals from the Reserve Bank of India (RBI) to operate as a fintech in India, including a full license to issue Prepaid Payment Instruments (PPI) for wallets and cards. The UK firm also operates as an Authorized Dealer Category-II (AD-II) for forex and cross-border remittances.

    But Revolut does not have a full banking license in India. As a result, it cannot offer traditional bank accounts, savings accounts, interest on balances, or credit cards. Because the UK firm operates as an e-money/prepaid instrument issuer rather than a bank, customer funds are not covered by the DICGC deposit guarantee scheme.

    While Revolut’s heavy investment in Indian talent and operations should sit well with Indian regulators, it is difficult to say whether this strategy will translate into faster regulatory approval for a full banking license. With the exception of Google Pay, most foreign fintech firms have struggled in India. They face intense competition from entrenched local players, complex regulatory compliance requirements, and the need to adapt to a unique, low-margin, high-volume market.

     Revolut is also a global company that is simultaneously ramping up expansion in Europe, Latin America, and the United States. While valued at US$75 billion, it does not have unlimited resources.

    A cautionary tale for Revolut is WhatsApp Pay, which thought its dominant messaging app would lead to a large market share in the Indian payments sector. But regulators slow-walked its key approvals due to data localization concerns. It has never gained a strong foothold in India.

    Fortunately for Revolut, it lacks Meta’s baggage. Time will tell if it can navigate the complex Indian regulatory environment more adroitly.

  • South Asia doubles down on crypto 

    South Asia doubles down on crypto 

    In 2025, the United States was arguably the most prominent cryptocurrency market globally because of the Trump administration’s high-profile moves to regulate digital assets and incorporate them into the mainstream financial system. However, when it comes to actual demand for cryptocurrency, the U.S. is an outlier. Demand for digital assets is growing fastest in emerging markets, with 2 of the top 3 in South Asia and 3 of the top 15 in that region, according to TRM Labs.

    What caught our eye in the survey, which covers the first six months of 2025, is how India is No. 1 and Pakistan is No. 3. Together, those two countries account for about 20% of the world’s population. If they eventually fully embrace digital assets, it will have significant implications for global financial flows—especially if American support for crypto results in broader regulatory acceptance globally.

    TRM Labs notes that South Asia emerged as the fastest-growing region for crypto adoption from January to July 2025, recording an 80% annual increase in transaction volume that reached US$300 billion.

    Despite persistent regulatory ambiguity towards crypto in India, the subcontinent’s demand for digital assets is surging. On the one hand, the success of the UPI payments rail makes the jump to crypto relatively seamless. A strong developer and Web3 ecosystem also foster innovation and local solutions. Additionally, user-friendly online trading platforms and mobile apps like WazirX and CoinDCX have made accessing crypto easy for retail users.

    Perhaps most importantly, India is the world’s largest recipient of remittances, and cross-border payments is one of the most promising financial sector segments for stablecoins. A notable percentage of remittances to India are now estimated to occur via stablecoins (perhaps 3-4%), a trend driven by the large Indian diaspora seeking better exchange rates and faster service.

    In Pakistan, the digital assets market is evolving differently than in India, with Pakistani regulators taking a more proactive approach. Notably, Pakistan recently secured a seat in global rule-making on cryptocurrencies and blockchain governance after Bilal Bin Saqib, chairman of the Pakistan Virtual Asset Regulatory Authority (PVARA), joined the World Economic Forum’s Steering Committee on Digital Asset Regulations. “This participation strengthens Pakistan’s presence in international policy discussions and signals growing recognition of the country’s role in shaping the global conversation on digital asset governance,” the Pakistani finance ministry said.

    In Bangladesh, crypto faces the most challenging market conditions. Indeed, as of 2025, no platforms are licensed to operate legally in the country. While no specific law explicitly bans cryptocurrency ownership itself, Bangladeshi authorities can prosecute related activities under existing legislation if they involve the Foreign Exchange Regulation Act, the Money Laundering Prevention Act, 2012, or the Anti-Terrorism Act.

    Despite the official restrictions, a significant number of Bangladeshis use cryptocurrencies, and actual prosecution for trading or transacting with cryptocurrency is uncommon. This activity often occurs through international exchanges and peer-to-peer (P2P) networks using local payment methods like bKash or Nagad. 

    Between India, Pakistan, and Bangladesh, in 2026 we expect to see the most crypto-related regulatory progress in Pakistan. While the bet might be risky, if Pakistani regulators are right, the Pakistani economy could benefit significantly from regulated digital assets. If the country is seen as crypto-friendly, that could attract more venture capital investment and boost the broader tech startup ecosystem. Indeed, VC giant Andreessen Horowitz recently led a US$12.9 million funding round for Pakistan’s ZAR, a fintech startup that aims to make dollar-backed stablecoins accessible to everyday consumers in Pakistan and emerging markets.

    Further, digital assets offer more immediate benefits to Pakistan than India, given the former’s larger percentage of underbanked citizens and more rudimentary digital payments network. Digital assets can probably also help Pakistanis hedge against inflation, which is a persistent problem given the weak Pakistani rupee, dependence on imports, and high trade deficit.

  • Why Mizuho took a majority stake in India’s Avendus

    Why Mizuho took a majority stake in India’s Avendus

    Japan’s financial heavyweights like Mizuho, MUFG and Sumitomo Mitsui are increasingly looking for more promising banking opportunities overseas as growth in their home market is flat given a legacy of ultra-low interest rates, deflation, heavy corporate cash holdings stifling investment, and a shrinking population.

    India has emerged as a preferred market for Japanese financial firms. The subcontinent boasts strong economic fundamentals, a young and large population with rising incomes, rapid digital adoption, and a burgeoning fintech sector. At the same time, to attract needed capital and international financial expertise, Indian regulators have loosened some restrictions on foreign investment.

    It is against this backdrop that Japan’s Mizuho Securities—which is part of the third-largest banking group in Japan, Mizuho Financial Group—recently announced its intention to buy 61.6% to 78.3% of shares in KKR-backed Indian investment bank Avendus for up to 81 billion yen (US$523 million). KKR affiliate Redpoint Investments Pte Ltd. is selling the stake to Mizuho Securities. Ranu Vohra, co-founder and executive vice chairman of Avendus, will also be liquidating his stake as part of the deal.

    Following the closing of the deal, which is expected in July 2026, Gaurav Deepak and Kaushal Aggarwal will continue to lead Avendus. “Together, we look forward to bringing innovative capital solutions to the Indian ecosystem and leveraging our complementary strengths to create deeper financial and economic flows between India and Japan,” Deepak said in a statement.

    For his part, Aggarwal said, “With India entering a transformative economic phase, we see immense potential to scale with purpose, innovate across sectors, and build a platform that consistently delivers impact in India and beyond.”

    The successful tie-up comes after Mizuho’s efforts to buy a majority stake in Avendus previously hit a roadblock. In September, India’s Economic Times reported that talks hit a snag due to disagreements on valuation and the right exit option for the KKR portfolio company.

    Mizuho emerged as the frontrunner for KKR’s 63% stake in Avendus, which valued the firm at about $800 million, according to Bloomberg. Other bidders for Avendus included Nomura Holdings Inc. and Carlyle Group Inc.

    The Mizuho-Avendus tie-up is the second major investment the Japanese lender has made in an Indian entity since early 2024. The first involved Mizuho taking a 15% stake in the non-banking financial company Credit Saison (CS) India with an investment of US$145 million. CS India subsequently secured External Commercial Borrowing (ECB) funding of US$145 million from Mizuho. The equity stake marked Mizuho Bank’s strategic entry into the Indian market.

    The Avendus deal follows Sumitomo Mitsui Financial Group’s purchase in September of a 20% stake in Yes Bank for about 135 billion rupees (US$1.6 billion) from State Bank of India (SBI). This strategic investment provides capital for Yes Bank and an exit for SBI from its 2020 rescue role. SMBC aims to support Yes Bank’s growth and transformation, benefiting from global expertise, while Yes Bank gains a strategic partner. SBI’s stake decreased to around 10%, and other original investors also reduced their holdings, allowing SMBC to become the largest shareholder.

    The infusion of capital and global banking expertise is crucial for Yes Bank’s continued recovery and growth after its 2020 financial crisis, while offering SBI a profitable exit for its investment.

    Looking ahead, we expect that heavyweight Japanese banks will continue looking for Indian investment opportunities in 2026 and beyond. Overseas expansion has become essential for Japanese megabanks to achieve scale and higher returns unavailable domestically.

    Among emerging markets, India stands out for Japanese lenders. The subcontinent’s expanding middle class and policy emphasis on financial inclusion create sustained demand for credit across retail, MSME, and corporate segments that will make its financial sector attractive for Japan’s largest financial groups for years to come.