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A finfluencer who also used to run a stock-market training institute has been asked to cough up "unlawful gains" of over Rs 12 crore. The Securities and Exchange Board of India (Sebi) passed an interim order against an unregistered investment advisory named Ravindra Bharti Education Institute Private Ltd (RBEIPL), its former director Ravindra Balu Bharti and his wife Shubhangi Bharti, and current directors Rahul Ananta Gosavi and Dhanashri Chandrakant Gosavi.


SEBI's investigations so far suggest that a stock-market training institute was fronting an unregistered advisory and that an authorised person's office was enabling this unregistered advisory, Moneycontrol reported. An authorised person works for a stock broker to help the broker's client execute their trades.


Read More: <a href="https://www.storyboard18.com/how-it-works/sebi-guidelines-and-financial-influencers-do-finfluencers-and-their-content-need-regulations-3377.htm">SEBI guidelines and financial influencers: Do ‘finfluencers’ and their content need regulations?</a> 


The regulator has asked them to credit the money received for investment advisory services and has banned them from the securities market until further orders.


An interim order was passed by SEBI's WTM Kamlesh C Varshney because the regulator recognised an urgency to act, given the influence Ravindra Bharti has over a large number of investors. Bharti has two YouTube Channels named Bharti Share Market Marathi with 10.8 lakh subscribers and Bharti Share Market - Hindi with 8.22 lakh subscribers.


Read More: <a href="https://www.storyboard18.com/how-it-works/sebi-crackdown-on-finfluencers-madhabi-puri-buch-says-guidelines-to-regulate-finfluencers-under-consideration-26109.htm">SEBI crackdown on finfluencers: Madhabi Puri Buch says guidelines to regulate finfluencers under consideration</a>

SEBI orders finfluencer Ravindra Balu Bharti to cough up Rs 12 crore made through 'unlawful gains'

The Securities and Exchange Board of India (SEBI) is contemplating comprehensive measures to regulate 'finfluencers' as concerns about investors falling prey to unregulated guidance rises. "The Securities and Exchange Board of India (SEBI) is contemplating guidelines to rein in finfluencers' activities," SEBI chairperson Madhabi Puri Buch said on March 11, at an Association of Mutual Funds in India (AMFI) event in Mumbai. 


These proposed regulations aim to overhaul registration norms, simplifying the process to facilitate 'ease of registration' for these influencers, while ensuring greater transparency and accountability, CNBC-TV18 reported, citing Buch's comments made at the event. 


Among SEBI's proposed measures is the establishment of a Performance Validation Agency (PVA), a third-party entity tasked with verifying performance claims made by market participants, including Portfolio Management Services (PMS), Mutual Funds (MFs), and Investment Advisors. The PVA aims to play a crucial role in validating performance reports, bolstering trust and reliability within the financial ecosystem.


Last year, SEBI came down heavily on unregistered finfluencers providing illegal investment advice through social media. Restrictions have been imposed on intermediaries, such as brokers and mutual funds, from engaging unregistered finfluencers for product promotion.


On October 25, 2023, finfluencer and educator Mohammad Nasiruddin Ansari, who has a strong social media presence on platforms like Telegram, YouTube and X, was banned by SEBI for providing investment advisory services without the required registration.


Popularly known as ‘Baap of Chart’, he also had to refund Rs 17.20 crore, which as per SEBI’s order was earned through ‘illegal advisory service’. As mentioned by SEBI, under the guise of educational training pertaining to the securities market, Ansari was providing stock recommendations.


Additionally, he convinced investors to enroll in his courses which were provided through the ‘Baap of Chart’ application. The courses stressed upon strategies for investing in the securities market. This was followed by guaranteeing a certain yet a consistent profit, stated the media report. Once the investor proceeds ahead to purchase the course, he or she becomes a part of a private chat group. The chat group provides recommendations on ‘buy’ and ‘sell’ in the domain of securities.


In May 2023, SEBI barred PR Sundar, a YouTuber and options trader, from trading for one year. This was after complaints emerged that Sundar, his company Mansun Consulting, and co-promoter Mangayakarasi Sundar provided investment advisory services without being registered with the regulator.


Sundar agreed to pay a settlement amount of Rs 46.8 lakh. This was followed by disgorgement of Rs 6 lakh including the profit earned from advisory services and the interest paid on it. 


In the same month, finfluencer Gunjan Verma was let off with a warning by SEBI after allegations that she provided investment advisory services without any registration.


ASCI Guidelines 

Last year, ad industry body the Advertising Standards Council of India (ASCI) revised its guidelines, mandating SEBI registration for influencers in the banking, financial services, and insurance (BFSI) sector. 


The guidelines for finfluencers stated that influencers could offer investment-related advice only after getting registered with SEBI and they must display their registration numbers alongside their name and qualifications.


The disclaimer that influencers would need to display includes superimposing their qualifications, registration or certification details on visuals that are readable or upfront.


For other financial advice services, influencers are required to possess credentials or a licence from the Insurance Regulatory and Development Authority of India, or they must be qualified chartered accountants or company secretaries.


SEBI has also released two consultation papers focusing on payment structures associated with financial advice and education, as well as partnerships between regulated entities and finfluencers.


Read More: <a href="https://www.storyboard18.com/how-it-works/explained-the-rise-of-finfluencers-and-how-guidelines-for-them-evolved-16428.htm">Explained: The rise of finfluencers and how guidelines for them evolved</a>

SEBI crackdown on finfluencers: Madhabi Puri Buch says guidelines to regulate finfluencers under consideration

Online trading platform Zerodha introduced its own social media page, Zing on YouTube in October. This initiative is a joint collaboration between the fintech company and the edtech platform LearnApp. "ASCI welcomes initiatives focused on educating and informing consumers about various aspects related to advertising or content, especially in the financial sector, given the heightened vulnerability of consumers in this space," Manisha Kapoor, chief executive officer & Secretary General, ASCI said.

Zerodha called attention to misinformation and deceptive practices influenced by social media in the context of financial misinformation and mis-selling.  “Finfluencers”, for example, is a big social media phenomenon that has gotten so big that SEBI is looking at it to curb financial mis-selling on social media.

"In our continued decade-long attempt to provide quality financial education and to tackle mis-selling and mis-information in finance and capital markets, we’re trying something new with Zing,” the company noted.


In August, the Advertising Standards Council of India  amended its guidelines for finfluencers. The guidelines for finfluencers stated that influencers could offer investment-related advice only if they are registered with SEBI and they must showcase their registration numbers alongside their name and qualifications.

Influencers would need to display their qualifications, registration or certification details on visuals that are readable or upfront.

For other financial advice services, influencers are required to possess credentials or a licence from the Insurance Regulatory and Development Authority of India, or they must be qualified chartered accountants or company secretaries.

The revised guidelines were introduced when SEBI complained of influencers spreading misleading advice on investment and stock trading.

For blogs and text-based posts, the credentials must be highlighted upfront or in a manner that can be read by consumers. In the case of audio content, the details must be stated at the beginning.

Moneycontrol had conducted an investigation that revealed some finfluencers were approached by financial companies to put up content related to initial public offerings. The finfluencers, not registered with SEBI, were asked to promote content without declaring them as ads, which was in violation of the rules set by ASCI. As per ASCI’s guidelines on IPOs, any content put out by financial companies needs to carry a disclosure label stating that it is an advertisement.

Influencers and content creators were being offered Rs 50,000 per tweet and Rs 1 lakh per video, according to Moneycontrol. Rates for creators specialising in writing about IPOs would increase.

ASCI welcomes Zerodha's initiative to tackle financial misinformation and mis-selling

How does one make responsible financial advice, such as tax saving or good insurance, more exciting compared to something like crypto or broking? Sharan Hegde, CEO, 1% Club and a popular content creator was talking about one of the biggest challenges in creating financial content.

For success in the field of content creation, Hegde said that influencers or content creators need to go deep into their understanding of the fintech product they want to talk about, make the right connects and work really hard.

This discussion was part of a panel discussion on regulation in the space at Moneycontrol's Creator Economy Summit. The panel was looking at regulations within the space of 'finfluencing'.

The regulation of financial advice from influencers has been a hot topic of discussion over the last few months with many influencers coming under the scanner for promising assured returns. In a recent case of SEBI crackdown, the regulator banned a finfluencer who went by the name Baap of Chart for making stock recommendations under the guise of financial education. SEBI's investment advisor regulations say that anyone providing financial advice needs to be registered.

"My heart goes out to the community (finfluencer) because they are making education accessible like never before," said Prabhakar Tiwari, Chief Growth Officer, Angel One, but added that at the end of the day, their interest and focus should be on investor protection. "One needs to understand that like with every other choice or decision taken, trading also has its share of risk, hence there is a need for well-researched investor education coming through influencers/content creators," he said.

ASCI's Manisha Kapoor added that at the end of the day, there is a need for more accountability. "I think the risk is real. Both health and wealth are important. It is important that the more established players start demanding more from their peers, " Kapoor said.

While there is a need for education, concerns creep up when content breaches the line of free speech and expression. "Everyone has the right to freedom of expression. The problem is when the content isn't created in the interest of the end user," Anil Choudhary, Partner, Finsec Law Advisors added. If the right content is served, in a simple format. It will be good for the market. Content should be regulated but not banned, he said.

As a part of the solution, Tiwari says that there is a need to talk about paid advertising, licensing and digital public good. "Can there be a public good, an infrastructure where various stakeholders can report bad elements? We monetise investors through their lifecycle so we can't let their finger burn for a few trades," said Tiwari, adding that Angel One has a compliance team in place with fraud detection and digital hygiene unit where they scan not only for finfluencers but other partners who are selling content in their name.

While SEBI is stepping in to take action and regulate the space, Choudhary added that SEBI cannot regulate every single piece of content, The need, he said, is for regulation to be segmented, with more oversight over people with a larger following like those with over one million followers.

Creator Economy Summit: Financial content is good for market; it should be regulated but not banned, say experts

Self policing the finfluencer community would be the best for everyone, Ananth Narayan, whole-time member of the Securities and Exchange Board of India (SEBI) said while speaking at the Moneycontrol Creator Economy Summit at Mumbai on October 31.

“If you want your community to gain, tell us what is going wrong. It gives us a lot of comfort to know that there is a community that is taking care of its problems,” Narayan elaborated saying that the finfluencer community is in the best position to show the bad apples in the industry.

Narayan said that finfluencers need to communicate and help the market regulator form better regulations. “Help us, come back with feedback. Refer to other jurisdictions and show us the way. Talk to us about how something can slip through the regulations and how we can prevent this," he asked the finfluencers.

Even the market regulator can make mistakes and is not perfect, according to Narayan. “Regulators could make errors. First, we let bad things happen. The second error is getting in the way of good things happening, like making regulations so difficult that good people can't do business”, he added.

Narayan reiterated that the market regulator is not going to baby sit investors and finfluencers and just wants finfluencers to provide quality education to investors. "Our job is not to create a nanny state. What I would love to see from content creators is high quality education. If you were advising your brother or mother, what advice would you give them? You wouldn't worry about who is paying you. The best content comes from the industry itself. Things like education and capital formation are too important, and should not be left to the regulator alone" Narayan added.

When asked whether increasing taxation for derivative trading would be better like taxing gambling ads to discourage excessive trading, Narayan conceded that there is logic in the suggestion, but said that it is out of syllabus and not in his domain to make a decision.

Creator Economy Summit: Finfluencers self-policing as a community will be ideal, says SEBI official

In 2023, the financial literacy rate of adults in India was 27 percent – well behind the UK’s 67 percent, Singapore’s 59 percent and the US’s 57 percent, according to a report.

Researching on Google or YouTube or getting hold of a platform or resources that explain the meaning of complex financial terms in a pithy manner is quite a task. This is where financial influencers – known as finfluencers – come into the picture.

But who are finfluencers? Are they qualified to provide financial information or investment advice and simplify the meaning of financial terms? What are their objectives?

Chartered accountant Rachana Phadke Ranade, Ankur Warikoo, Anushka Rathod, Sharan Hegde and Pranjal Kamra are among those who have carved a niche for themselves on social media and other platforms. Kamra was the most followed finfluencer on YouTube with 5.66 million subscriptions. Ranade was second with 4.58 million subscribers.

Their popularity led a section of the people to follow them for financial guidance and not seek the help of investment advisors registered with the Securities and Exchange Board of India (SEBI).

Let us understand how this section of influencers achieved their popularity and the impact of guidelines introduced to control the spread of misinformation. 


Finfluencers: Growing in popularity


The pandemic, when businesses suffered and the world was caged in, was a catalyst in the emergence of finfluencers. Stocks gained and with the arrival of Covid-19 in 2020, people became more cautious about their spending habits and started developing a healthy relationship with money.

With low financial literacy levels in the country, there was ample scope for influencers to enter the space.


SEBI reins in finfluencers 


The proliferation of finfluencers took place in a largely unregulated manner. While many such influencers sought to promote financial literacy and help people make investment decision, there were others who saw it as an opportunity to make quick money.

That’s when SEBI decided to step in and put out norms that required all such influencers to register with the regulator as qualified investment advisors and research analysts. It has since started cracking down on those not following the guidelines.

Most recently, on October 25, SEBI banned Mohammad Nasiruddin Ansari, who has a strong social media presence on platforms like Telegram, YouTube and X, for providing investment advisory services without registration.

Popularly known as ‘Baap of Chart,’ Ansari was ordered to refund Rs 17.2 crore, which SEBI said was earned through illegal advisory services. According to the regulator, Ansari provided stock recommendations in the guise of educational training pertaining to the securities market.

Further, he convinced investors to enrol in his courses that were provided on the ‘Baap of Chart’ app. The courses were on investment strategies for the securities market. This was followed by guaranteeing a certain yet consistent profit, according to a report.

Once someone paid up to join the course, he or she became part of a private chat group where they would get ‘buy’ and ‘sell’ recommendations for stocks.

In May, SEBI barred PR Sundar, a YouTuber and options trader, from trading for one year. This was after complaints that Sundar, his company Mansun Consulting, and co-promoter Mangayakarasi Sundar provided investment advisory services without being registered with the regulator.

Sundar agreed to pay a settlement amount of Rs 46.8 lakh. This was followed by disgorgement of Rs 6 lakh including the profit earned from advisory services and the interest paid on it, CNBC-TV18 reported.

In the same month, finfluencer Gunjan Verma was let off with a warning by SEBI after allegations that she provided investment advisory services without any registration.

According to a report, a Telegram channel regularly disseminated information that was misleading. Those involved in this activity would buy shares of a company, convince subscribers to invest in the company, and once the stock price rose, they would sell the shares and rake in a neat profit. SEBI banned these entities that used the channel and imposed a fine of Rs 5.68 crore on them.


Imposition of guidelines: ASCI steps in


In August, the Advertising Standards Council of India revised its guidelines for finfluencers and health and nutrition influencers. The guidelines for finfluencers stated that influencers could offer investment-related advice only after getting registered with SEBI and they must display their registration numbers alongside their name and qualifications.

The disclaimer that influencers would need to display includes superimposing their qualifications, registration or certification details on visuals that are readable or upfront.

For other financial advice services, influencers are required to possess credentials or a licence from the Insurance Regulatory and Development Authority of India, or they must be qualified chartered accountants or company secretaries.

The revised guidelines were introduced when SEBI complained of influencers spreading misleading advice on investment and stock trading.

For blogs and text-based posts, the credentials must be highlighted upfront or in a manner that can be read by consumers. In the case of audio content, the details must be stated at the beginning.


SEBI: Tightening rules


On August 25, SEBI released a consultation paper on ‘Association of SEBI Registered Intermediaries/Regulated Entities with Unregistered Entities (including Finfluencers).’

According to the paper, influencers are “usually unregistered entities providing catchy content, information, and advice on various financial topics to their several followers.”

The regulations state that those who do not have a registration certificate from SEBI cannot give out advice as investment advisors or research analysts.

To qualify as a registered investment advisor or research analyst, the person must have the qualifications pertaining to the role and must have five years of experience in providing services on financial products, securities, or fund, asset or portfolio management.


Guidelines for IPOs


Moneycontrol conducted an investigation that revealed some finfluencers were approached by financial companies to put up content related to initial public offerings.

The finfluencers, not registered with SEBI, were asked to promote content without declaring them as ads, which was in violation of the rules set by ASCI. As per ASCI’s guidelines on IPOs, any content put out by financial companies needs to carry a disclosure label stating that it is an advertisement.

Influencers and content creators were being offered Rs 50,000 per tweet and Rs 1 lakh per video, according to Moneycontrol. Rates for creators specialising in writing about IPOs would increase.

Explained: The rise of finfluencers and how guidelines for them evolved

During his keynote address in the Moneycontrol Mutual Fund Summit, Ananth Narayan G, whole-time member, Securities and Exchange Board of India (SEBI), pointed out that investors must be made aware of their risk appetite and how to construct an asset portfolio that ties up with that risk, and then be patient with it.

“This is the kind of education that we need going through to people so that they have to rely less on finfluencers (financial influencers) and other charlatans who are giving them ‘get rich quick tomorrow’ kinds of philosophies and inducing them into the market,” he said.


The SEBI whole-time member lauded the efforts of the MF industry, and highlighted that as of March 2020, assets under management (AUM) of the industry stood at about Rs 22 trillion, which almost reached Rs 48 trillion today. Further, the unique investor count in MFs as of March 2020 stood at about 2.2 crore, which has increased to about four crore now, as per the Moneycontrol report.

Narayan highlighted that for the first time, the number of unique participants via SEBI-regulated entities entering the securities market ecosystem crossed the 10 crore milestone in September 2023.

During the address, Narayan emphasized that the key positive outcome of risk acceptance and measurement would be investors appreciating the importance of risk management.

“Suppose you buy one particular stock, which gives you a 15 percent annualised return with a 30 percent annualised volatility. Is that the best investment opportunity? If one is able to understand this, then the efficient market hypothesis will tell that it is not the case. For a 15 percent annualised expected return, you can construct a portfolio of investment assets, which gives you that return at far lower volatility at far lower risk,” he said.

Narayan shared that Nifty’s volatility over the last 10 years was about 18 percent, while individual stocks’ volatility is typically 30-35 percent. “Mutual funds are doing a great job, as they are actually providing a lower portfolio risk and, therefore, reducing the volatility in many ways.”






SEBI's Ananth Narayan G: We need investor education programs so people rely less on finfluencers, charlatans

Twenty-six-year-old Vivek Shetty (name changed on request), who works with a digital marketing agency, has been investing in cryptocurrency since early 2021. Shetty has been following creators like Ankur Warikoo, Akshat Shrivastava and CA Rachana Ranade for investment tips. However, he only makes investment decisions after consulting his father and the family wealth manager. According to Shetty, for beginners, following content creators for context and understanding of the market dynamics and investment options is a good start. But “at the end of the day, they are people on the internet. I wouldn’t risk my money based on a YouTube video. I can’t trust them.”

On July 4, 2022, Singapore-based crypto trading platform Vauld suspended all its operations, including withdrawals and deposits. This comes amidst crypto winter as markets continue to struggle to attract new investors even as some recovery is being witnessed. Globally, about $400 billion worth of investor wealth has been wiped out in crypto over the last few weeks. Most of them are young and first time investors. As per a report by crypto exchange Gemini, more than 54% Indians in the crypto space are first-time investors.

Cryptocurrency is a volatile market - the price of a single Bitcoin today is around Rs 17.50 lakh; less than half its value in November 2021.

It’s not just the current stormy market conditions that’s giving brands in the category a tough time. “With blurry advertising guidelines and no regulations, there is a massive grey area,” says a senior executive of a creative shop who has worked closely with crypto and BFSI clients. He says, “Technically, influencers aren’t selling an illegal product. Some of them subtly mention it in their videos, a few oversell it, and others are taking a neutral stand. There is no one to tell them if they are being irresponsible apart from a set of social media users who are well aware of the category. You can flag it off to the Advertising Standards Council of India that’s about it.”

In June 2022, as per ASCI, 92% of all crypto advertisement violations that occurred between the months of January 2022 and May 2022 can be linked to social media influencers in the country. Most of these influencer ads were a mix of breaching ASCI’s influencer guidelines and crypto guidelines in advertising. The breaches included failure to add disclaimers around crypto trading as well as tags that noted that a particular post was a paid partnership.

Manisha Kapoor, CEO and secretary general, ASCI, tells Storyboard18, that while a lot of consumers are aware that crypto is a relatively new sector that is unregulated, it also important for crypto exchange platforms to carry the mandated disclaimer in their advertising informing them that it’s a high-risk investment category. She further adds, “Influencers, like all endorsers, need to do full due diligence before talking about products, regardless of the category.”

Who is really responsible?

Post the news of Vauld’s shutdown, a number of social media users started pointing out how top Indian finfluencers like P.R. Sundar, Ankur Warikoo, Akshat Srivastav, and Booming Bulls, made “irresponsibly” content for the brand.

Shrivastava has a video portfolio on his YouTube channel, which has over a million followers, explaining cryptocurrencies, and related concepts like tokens, stablecoins, and equity. He has also made several videos for Vauld's YouTube channel. On his personal channel he has videos with clickbaity titles like “The best Fixed Deposit option with 0 taxes!”, “Cryptos will SKYROCKET!” in partnership with Vauld. Srivastava in all of these videos gave full disclosure that its educational content and not a piece of investment advice.

In October 2021, Warikoo, a digital influencer who discusses entrepreneurship, finance, and investment, made a YouTube video discussing how he uses Vauld for bitcoin-based fixed deposits. In the video's description, he stated that he would not have otherwise invested in a fixed deposit. Since Vauld offered special fixed deposits for crypto investments, which was an easy way to make money over and above the appreciation in the value of crypto investments, he went for it. He used the “paid promotion” tag in this video. Warikoo updated the video’s description with this note, “At 8:21am on July 4th 2022, I received an email from Darshan, the CEO of Vauld. Due to the volatile nature of the crypto market, Vauld has decided to pause all withdrawals, trading and deposits. Which means our monies are stuck for now. This is extremely unfortunate and not something I would have wished for, when I worked with Vauld. As all of us (that includes me - Even my money is with Vauld) wait to see what happens next, I hope you all invested wisely in crypto to no more than 5-10% of your total portfolio, as I have mentioned always.”

In theory, Srivastava, Warikoo, and other creators who created content for Vauld haven’t violated any visible rules. However, the argument is that they and other finfluencers need to be extra careful with brand collaborations, do better homework on brands, and make disclosures louder and clearer.

An active investor in crypto startups in India tells Storyboard18 that it’s “high time that finfluencers get their act together.” He opines, “Crypto attracts young investors who live and breathe on social media. It is a joint responsibility of the brands, influencers and agencies involved to be transparent with their narrative.”

Ashutosh Harbola, founder of influencer marketing company Buzzoka agrees with that. He further adds that crypto exchange platforms are chasing valuation, and ethics don’t matter when brands are in that race.

A founder of a leading influencer marketing agency says it’s not fair to blame finfluencers when there is a market crash or a company decides to shut operations overnight. “The intent of the content produced by finfluencers is to make investors aware of trends and opportunities. That’s about it. There is a lot of homework done by them before releasing their content piece. It time for all stakeholders to come together and define what is right and wrong way to promote a category like crypto.”

Agencies that Storyboard18 spoke to indicate that crypto brands collectively at the beginning of 2022 had plans to spend between Rs 400 crore and Rs 700 crore on digital marketing. Last year, this number stood at around Rs 800 crore to Rs 1,000. It is too early to estimate if that will drop post the Vauld episode, says a senior media planner. But he indicates that crypto brands will continue to rope in influencers for aggressive marketing push. Depending on the reach and follower count finfluencers get anywhere between Rs 50,000 to Rs 10,00,000 for an Instagram Reel. As per multiple agencies that Storyboard18 spoke to for a full brand campaign they are paid anywhere between Rs 1,00,000 to Rs 50,00,000. Insiders working closely with finfluencers also hint that smaller crypto brands have offered equity stakes to some of them. Some have silently added it to their portfolio, and some have politely refused this offer.

What’s the fix?

Sayali Rai and Niyati Thaker, partners of FinCocktail, a personal finance guide, tell Storyboard18 that they spend significant time researching on brands that approach them for collaborations. They read consumers’ feedback and talk to fellow personal finance experts to make informed decisions. Recently, they have worked with brands Groww, HDFC MF, and Manipal Cigna Health Insurance. Rai and Thaker have also worked with brands CoinDCX and CoinSwitch Kuber in the past and said no to some brands from the category too.

They say, “We think becoming popular is always the aim when you want to be an “influencer” in any category, but instead of focusing on things that “may go viral” we need to focus on what we’re here to do first.” Educational content is critical if creators want to spread financial literacy, believe Rai and Thaker. The right approach is to “Give out disclaimers, tell users that they need to do their research time and again. It’s important. Tell them if you’re not confident about a brand, don’t be shy about it. Also, even Warren Buffett has made bad calls and lost money. Don’t be afraid to showcase your mistakes. Finance is as much art as science, explain Rai and Thaker.

Brand experts think crypto brands will not stop pumping monies into marketing anytime soon. However, the critical aspect is the need to amend crypto guidelines and have clear regulations in place. Harbola agrees with this. “For a dynamic category like crypto, ASCI has to be on its toes and bring amendments to its existing guidelines because the space is ever-evolving. The ad regulator has to empower customers by making it easier for them to report defaulters (influencers/crypto platforms) as well,” he concludes.

Are crypto investors losing faith in finfluencers?

With a move by the Central Board of Direct Taxes (CBDT) to expand the government’s tax base, 10 percent TDS on freebies and business promotions might have a significant impact on most of the influencers. But, it might have little effect on categories like finance influencers because they don't usually get freebies or merchandise. That’s because most of their ads are based on services instead of product promotions.

So who will it impact the most?

The categories of influencers which would be most affected are lifestyle, fashion, tech (electronics) and travel.

For example, if a company sponsors a trip of a travel influencer for Rs 1 lakh, then the company will be liable to deduct Rs 10,000 as TDS. Same goes with the goodies provided to lifestyle and fashion influencers. Even the tech influencers often get freebies worth above Rs 20,000, which is the non tax limit.

But it has also been notified by the CBDT that no charges will be applied if the gifts are returned to the company after the purpose of sales promotion has been fulfilled.

What are companies likely to do now?

So my best guess is, with promotion of durable goods like phones, cameras, or laptops which are above Rs 20,000, the companies might just skip the gifting system and rather rent out for free for the required duration to the content creators.

Coming to non-durable or perishable goods, like let’s say promotion of a bakery where they send you cakes or cookies, they anyway barely cross Rs 20,000.

Talking about finance influencers, they usually do not receive free tickets on IPL matches or trips for sales promotions for that matter. Also, usually the promotions finfluencers do are taxed. Freebies are a rare thing in their niche. Hence, with or without this new development, anyway they are liable for 1 to 10 percent TDS. So, I do not see a significant impact on social media niches which are information+entertainment centric.

And the bottom line?

All in all, we might see a drop in freebies above Rs 20,000 - where companies either collect the goodies after promotion is shot, or companies actually pay the TDS for high cost travel sponsorships or events!

FINFLUENCERS