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The transition from offline/traditional to digital to ‘assisted offline’ is manifesting in an accelerated manner across financial services, and especially in distribution of financial products.

Growth in payments remained strong in May’23 as seen from: (1) total CC spends of Rs1.4trn during the month (up 6% MoM) and likely to have remained largely stable in Jun’23; (2) industry receivable per credit card stood at ~Rs23k in May’23 (down marginally by 1% MoM).

Jun’23 has been a strong month for capital markets. Total cash volumes were up 5.8% MoM while NSE derivatives volumes increased 2.4% MoM and traction around MCX options volumes continued.

Introduction of the credit-linked subsidy scheme (CLSS) by the government in 2015 improved affordability of home loans for EWS and LIG population groups. This is reflected in CLSS-linked loans to the two groups accounting for 4% each of total home loan disbursements in FY21 and FY22.

The regulator (SEBI) has decided to revisit the proposal for TER revision (Link) and publish another consultation paper soon. Initially, TER revision being a price- sensitive matter, SEBI had to conduct the research purely based on limited data available at that point of time.

In a decade long eventful journey, microfinance lenders have navigated one of the longest asset quality cycles (FY17-22) – starting from demonetisation in FY17, floods, NBFC crisis in FY18-19, and lastly covid in FY21-22. While the lenders have remained resilient as reflected in 25% AUM CAGR between FY17-21, average credit cost stood elevated at ~2.5% vs <50bps during FY14-16.

Capital market players typically outperform with improving market sentiment. There are signs of the same with rising NSE cash market volumes post a decline (between Apr’22-Mar’23), increasing SIP flows and rising demat account additions while derivatives continue to reach new highs every month.

May’23 has been an all-round strong month for exchanges with improvement in volumes especially in cash (Rs600bn ADTV after 7 months) and commodities segment while equity derivatives continue to scale new highs since the last nine months.

Asset management companies’ earnings have structurally faced headwinds on revenue yields due to a combination of (1) lower yield on new equity flows and (2) telescopic pricing of scheme-wise TER eligibility. However, going ahead, there could be some impact from the new TER guidelines.

Growth in payments remains strong. This is led by (1) expected total CC spends of Rs1.4trn in May’23 (up 4% MoM), (2) increase in receivable per credit card, (3) increase in cards in force (CIF) to 86.5mn, up 1.42% MoM in Apr’23, (4) MoM increase in Paytm GMV of 9% in May’23 and (5) increase in UPI transactions in terms of value/volume by 43/58% YoY to 9.5bn/Rs14.9trn in May’23, respectively.