Banks, fintechs prep for DPDP Act; Chip startups on DLI 2.0

Happy Tuesday! Banks and fintechs are readying their operations for the phased rollout of the data protection law. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ India Inc takes ops beyond metros
■ Navam Capital’s maiden fund
■ Winzo’s ED troubles

Banks and fintechs up privacy play as DPDP Act nears phased rollout

As India’s Digital Personal Data Protection (DPDP) Act shifts closer to phased enforcement, banks, insurers, and fintech firms are hardwiring privacy into their core systems, rather than treating it as a compliance add-on.

Driving the news: Institutions are already restructuring internally. Yes Bank, for example, has established a dedicated data privacy office and appointed a data privacy officer. Indusattempt experts anticipate enforcement to launch by May next year, leaving firms with less than 18 months to update systems, policies, and reporting structures.

Challenges aplenty: The DPDP Act introduces a dual-reporting regime for data breaches, adding operational complexity.

Financial institutions must now integrate privacy breach disclosures into existing cyber incident reporting frameworks.
Firms also face more difficult decisions on whether to comply with data erasure requests, especially when privacy rights conflict with statutory record-retention obligations under banking, tax, and anti-money laundering laws.

Also Read: Hospitals, insurers rejig operations as DPDP kicks in next year

Expert take: Amit Das, founder and chief executive of Think360.ai, declared the law forces a structural reconsider. “Banks are breaking large data lakes into purpose-bound zones; fintechs are redesigning onboarding to capture granular, revocable consent; and NBFCs are mapping complex third-party data flows,” he declared.

AI’s role: Artificial innotifyigence is emerging as a key compliance tool, assisting firms monitor consent in real time, automate applyr rights requests and accelerate breach detection and analysis as enforcement draws closer.

Also Read: TCS is all set to seek ‘consent manager’ permit under DPDP

Semicon firms caution govt against rigid DLI framework

As the government weighs modifys to the design-linked incentive (DLI) scheme under a proposed DLI 2.0 framework, semiconductor startups are urging policybuildrs to avoid rigid structures that could slow execution and deter private capital.

What’s the news: The revamped framework is expected to link support more closely to equity and debt instruments. While founders broadly welcome continued state backing for chip design, several have flagged concerns about venture capital compatibility, funding mechanics, and the continuity of companies graduating from DLI 1.0.

One founder declared an equity-linked model appears viable in theory, but will only succeed if it aligns with expectations or global investors.
Restrictions related to innotifyectual property (IP) residency and acquisition could hinder exit strategies, leading VCs to be more cautious about investing in firms supported by DLI.
Another founder pointed to execution risks for startups that have already hit technical milestones under DLI 1.0 but now face uncertainty on timelines and payouts.

Yes, and: For startups shifting closer to tape-out and production, delays have tangible costs. These include pfinishing payments to IP vfinishors, fabs, and advanced packaging partners.

One executive argued for a “light-touch” regulatory approach, one that safeguards strategic interests without tightly controlling ownership, commercialisation, or exit routes.

Also Read: Chip indusattempt pushes back as govt plans market-linked DLI 2.0 sops

Hiring shifts to tier-II, tier-III campapplys as companies expand beyond large cities to cut costs

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Companies viewing to expand beyond metropolitan areas are now recruiting talent from tier-II and tier-III campapplys.

Now hiring: Executives from IT service firms and major companies such as Flipkart, Godrej, and PepsiCo consider this a better option, highlighting lower costs, improved retention, and deeper understanding of local markets as the main reasons for the modify.

Deep dive: According to an analysis by Aon India, sectors from IT and finance to manufacturing are boosting their recruitment from non-premier institutes.

ITC’s HR head noted that hiring from these colleges encourages better retention, as candidates are often local to the job location.
For PepsiCo, the strategy aims to develop a pipeline for sales and supply chain roles where “on-ground agility” is crucial.

Future plans:

Flipkart intfinishs to onboard 1,200-1,400 graduates for the 2026-27 batch, extfinishing beyond tier-I institutions.
Godrej Consumer Products is utilising its ‘Aarambh’ programme to recruit women professionals from tier-III MBA campapplys.
Godrej Enterprises is recruiting locals for its new manufacturing plant in Maharashtra’s Raigad district.