Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional participated in an e- panel the discussion:
- Mr. Ravi Virwani, Vice President – Rural Home Loans, Fullerton India Home Finance Company Ltd
- Mr. Tarandeep Singh, Head – Business Development and Partnerships, Amazon Inc, Singapore
- Mr. Aditya Soni, Business Lead, Payments Partnerships, Fintech(consumer Lending), Consumer Finance & Gift
- Mr. Vaibhav Sanghavi, Chief Technology officer, Clix Capital
- Mr. Manish Diwaan, Senior Product Manager, VP Bank, Vietnam
- Mr. Shirsha Ghosh, Co-Founder, Torit Innovation
- Mr. C. K. Vardharajan, Vice President, Equitas Small Finance Bank
- Mr. Anupam Mishra, Head – Digital Banking, Cards & Payments, Jana Small Finance Bank
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum
FIAKS Community Questions
What is 0% interest EMI option model of credit/debit cards? Who bears the interest burden? What are the regulations on the same?
FIAKS Community Discussions
A FIAKS community expert starts off the discussion by explaining that normally product manufacturers or dealers or resellers bear the cost and part is also recovered through advance EMI and processing fees.
Most of the so-called no-cost EMIs comes with huge processing fee which is most of the time paid by the merchant or the manufacturer (which covers the interest part) or with 3rd party services like insurance (which also covers interest part). And if someone misses any EMI, they need to pay a high bounce charge. The scheme is just to camouflage and attract more customers. As per the regulations, banks charge interest on your card swipes but for the same amount of interest, you get cash back from the manufacturer in your card account.
Another FIAKS community member said that it is the standard subventions model. Subvention is the right word from a lending industry point of view and it’s standard practice. Subventions are the interest component. Someone definitely and pays it’s either the customer (PF) or the manufacturers or the bank.
During this discussion, community members remarked there are two models prevalent:
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