BTL 873 - Collaborative Banking

 

The Banking Tutor’s Lessons

BTL 873                                                                                24-02-2026

Collaborative Banking  

Collaborative banking involves partnerships between traditional banks and fintech companies, or among financial institutions, to leverage shared technology, data, and infrastructure for enhanced, customer-centric services.

This approach combines the trust and regulatory compliance of banks with the agility and technology of fintechs, often using APIs and BaaS (Banking-as-a-Service) models to offer faster, more personalized financial solutions.

 

Key Aspects of Collaborative Banking:

Bank-Fintech Partnerships: Banks gain digital agility while fintechs gain access to a larger customer base and regulatory trust, creating a win-win scenario.

Open Banking & APIs: Secure data sharing through APIs enables third-party developers to build applications and services, creating personalized customer experiences.

Banking as a Service (BaaS): Licensed banks offer their infrastructure, such as accounts and payment processing, to non-banking firms (like fintechs) to provide financial services under their own brand.

Improved Customer Experience: Collaborations focus on creating faster, more transparent, and efficient financial products, such as digital lending or improved payment systems.

Enhanced Security & Compliance: Collaborative models, particularly BaaS, allow for integrating strict regulatory compliance into new digital products.

Benefits:

Market Expansion: Banks and fintechs can reach untapped market segments.

Innovation: Faster development of new products, such as digital-only banking services.

Cost Efficiency: Shared infrastructure lowers operational costs for both parties.

Sekhar Pariti

+91 9440641014

DBC 2355 - Multi Level Marketing (MLM)

 

The Banking Tutor 

Daily Banking Concept -  2355 

Multi Level Marketing (MLM) 

MLM is an industry worth at least tens of billions annually where independent distributors sell products directly to consumers and recruit others into their network, earning from both personal sales and their downline's performance.

DBC 2354 - Long Put Options

 

The Banking Tutor 

Daily Banking Concept -  2354 

Long Put Options 

A long put involves purchasing a put option, which allows investors to potentially benefit from a decline in the underlying asset's value.

DBC 2353 - Capital Gain Tax

 

The Banking Tutor 

Daily Banking Concept -  2353 

Capital Gain Tax 

Capital gain tax refers to the tax levied on the profit made from the sale of an asset, such as real estate, stocks, or other investments.

BTL 872 - DPDP Act and Banking

 

The Banking Tutor’s Lessons

BTL 872                                                                               21-02-2026

DPDP Act and Banking  

The Digital Personal Data Protection (DPDP) Act, 2023, fully operationalized by the DPDP Rules 2025 on 14 November 2025, establishes a strict framework for how banks in India handle customer data.

Banks are classified as Data Fiduciaries, making them legally responsible for the security and lawful processing of customer information like KYC details and financial history.

Key Compliance Mandates for Banks

Explicit Consent & Notice: Banks must obtain free, specific, and informed consent before processing data. Consent requests must be accompanied by clear notices in English or any of the 22 regional languages listed in the Constitution.

Legitimate Uses: Consent is not always required for "legitimate uses," such as fulfilling legal obligations (e.g., KYC under PMLA), responding to medical emergencies, or processing data of loan defaulters to assess assets and liabilities.

Data Minimisation & Erasure: Banks can only collect data necessary for a specific purpose and must delete it once that purpose is met, unless retention is required by other laws (like the Reserve Bank of India (RBI)'s 5-year KYC retention rule).

Breach Notification: In the event of a data breach, banks must notify the Data Protection Board (DPB) and all affected customers "without delay," typically within 72 hours.

Significant Data Fiduciary (SDF): Many banks will likely be designated as SDFs due to the volume of sensitive data they handle. This requires additional duties:

Appointing a dedicated Data Protection Officer (DPO) based in India.

Conducting periodic Data Protection Impact Assessments (DPIAs) and independent audits.

Interplay with Existing Banking Regulations

The DPDP Act adds a horizontal layer over existing rules from the RBI and CERT-In.

Conflict of Laws: If a conflict arises between the DPDP Act and a sector-specific law (like stricter RBI data localization norms), the sectoral regulation prevails.

Outsourcing: Banks remain ultimately accountable for data breaches caused by third-party processors (e.g., fintech partners, cloud providers), necessitating stricter vendor risk management and updated contracts.

Penalties for Non-Compliance

Non-compliance can result in massive financial penalties:

₹250 crore for failing to implement reasonable security safeguards to prevent breaches.

₹200 crore for failing to notify the DPB or individuals about a data breach.

Banks have an 18-month phased implementation period from November 2025 to achieve full compliance, with some core duties like consent notices and breach reporting taking effect sooner.

The Act applies to all financial institutions in India, covering digital data collected online or digitized offline.

Sekhar Pariti

+91 9440641014

DBC 2352 - Tertiary Industry

 

The Banking Tutor 

Daily Banking Concept -  2352 

Tertiary Industry 

Tertiary means Third in Order. The tertiary industry is the part of the economy that provides services rather than producing goods, and includes medical providers, educators, financial services, and personal services, among others.

 

The tertiary industry is a technical name for the services sector of the economy, which encompasses a wide range of businesses, including financial institutions, schools, hotels, and restaurants.

DBC 2351 - Dollar-Cost Averaging

 

The Banking Tutor 

Daily Banking Concept -  2351 

Dollar-Cost Averaging 

Dollar-cost averaging is the system of regularly buying a fixed dollar amount of a specific investment, regardless of the price.