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We are delighted to share this week's AKP Banking & Finance Weekly Digest. Please feel free to write to us with your feedback at info@akandpartners.in. We shall now be hosting our weekly updates at Spotify!
1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI launches microsite for banknotes
The Reserve Bank of India ("RBI") launched a new microsite https://indiancurrency.rbi.org.in to provide the public with comprehensive information on banknotes, including their design, security features, and a 360-degree view. The site also offers multimedia content and a dedicated section on exchange of banknotes. This new platform replaces the earlier microsite https://paisaboltahai.rbi.org.in.
Securities and Exchange Board of India (SEBI)
1.1.2. SEBI issues clarifies continuity of pre-IPO share-based benefits for promoter-tagged employees
The Securities and Exchange Board of India ("SEBI") has notified the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) (Amendment) Regulations, 2025 on September 8, 2025. The amendment inserts Regulation 9A into the 2021 framework to state that an employee who is identified as a "promoter" or part of the "promoter group" in the draft offer document for an IPO (Initial Public Offering), and who was granted options, SAR (Stock Appreciation Rights) or any other benefit under a scheme at least one year before filing the draft offer document, may continue to hold and/or exercise such benefits in line with the scheme terms, these regulations and applicable law.
1.1.3. SEBI mandates demat-only issuance for corporate actions; tightens SSE disclosure and NPO listing norms
SEBI has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2025 on September 8, 2025. Key changes include: (i) a listed entity must issue securities arising from a scheme of arrangement, or a sub-division, split, or consolidation, only in dematerialised form, and must open a separate demat account for investors who do not have one; (ii) for the Social Stock Exchange ("SSE"), a Not for Profit Organization ("NPO") registered or listed on the SSE must make annual disclosures, financial by October 31 and non-financial within sixty days of financial year-end; an NPO may remain registered without raising funds for up to two years from registration, after which at least one project must be listed or the registration ceases; and (iii) the provisos in Schedule VII, clause B(1) and B(2) have been omitted.
1.1.4. SEBI widens pre-IPO demat norms, tightens disclosures, refines Social Stock Exchange rules
SEBI has amended the Issue of Capital and Disclosure Requirements Regulations, 2018 through the Second Amendment Regulations, 2025 (notified on September 8, 2025), mandating that all securities held by promoters, promoter group, selling shareholders, directors, key managerial personnel, senior management, qualified institutional buyers, employees and regulated entities be in dematerialised form before filing a draft offer document; aligning the definition of accredited investors with the Alternative Investment Funds Regulations, 2012; tightening Social Stock Exchange norms by requiring NPOs to list at least one project within two years of registration and prescribing new eligibility and reporting standards for Social Impact Assessors; and strengthening disclosure requirements by demanding detailed risk factor reporting, a capitalisation statement, and renaming "Use of proceeds" as "Objects of issue and use of issue proceeds."
1.1.5. SEBI introduces co-investment framework, revises Angel Fund regime under AIF norms
SEBI amended the Alternative Investment Funds Regulations, 2012 through the Second Amendment Regulations, 2025 notified on September 9, 2025, creating a statutory framework for "co-investment schemes" to be launched by Category I and Category II Alternative Investment Funds (AIF) for accredited investors on terms aligned with the main scheme, with specified governance and disclosure requirements. The amendment also overhauls the Angel Fund regime by tightening investor eligibility and documentation while providing flexibility in fundraising. Operational details for co-investment schemes were issued through a SEBI circular on the same day.
1.1.6. SEBI simplifies disclosure requirements for Portfolio Managers; introduces dynamic-updatable format
SEBI issued a circular dated September 9, 2025, replacing Schedule V of the SEBI (Portfolio Managers) Regulations, 2020 with a streamlined Disclosure Document format. The format is divided into a static section (covering disclaimer clause, definitions, services offered, risk factors, fees, accounting policies, taxation, investor services, diversification policy, legal/legal proceedings, and description), and a dynamic section (covering client representation, financial performance, portfolio performance, audit observations over the past three years, and related-party investments). Each parameter must begin on a new page; only pages with changes require certification by an independent Chartered Accountant and the Principal Officer, and must be flagged to clients, updated on the PMS website, and filed with SEBI within seven working days. Certification, content requirements under Regulations 22(4) and 22(5), and investor protection norms remain unchanged. The circular took effect immediately.
International Financial Services Centres Authority (IFSCA)
1.1.7. IFSCA prescribes fees for third-party fund management services
The International Financial Services Centres Authority ("IFSCA"), through its circular has specified the fee structure for Fund Management Entities ("FMEs") providing Third-Party Fund Management Services in the International Financial Services Centre ("IFSC"). Registered FMEs are required to pay USD 2,500 (United States Dollar Two Thousand Five Hundred only) as an application fee and USD 7,500 (United States Dollar Seven Thousand Five Hundred only) as an authorisation fee. In addition, an annual conditional recurring fee of USD 2,000 (United States Dollar Two Thousand only) per Third-Party Fund Manager is payable, alongside the flat recurring fee of USD 2,000 (United States Dollar Two Thousand only) prescribed earlier. Activity-based and other regulatory fees will continue to be governed by the April 8, 2025, circular.
1.1.8. IFSCA extends Authorised Person market access to bullion exchange in IFSC
The IFSCA extended, mutatis mutandis, its existing Market Access Circulars, under which stock exchange brokers in the International Financial Services Centre provide investor access via Authorised Persons (APs), to the Bullion Exchange and Bullion Trading Members, with the exchange directed to amend its rules and disseminate the change.
1.1.9. IFSCA extends deadline for CMI net worth compliance to December 31, 2025
The IFSCA extended the timeline for capital market intermediaries in the IFSC to meet revised minimum net worth requirements under the CMI (Capital Market Intermediaries) Regulations, 2025, shifting the compliance date from October 1, 2025, to December 31, 2025.
Miscellaneous
Ministry of Corporate Affairs (MCA)
1.1.10. MCA amends merger rules to ease fast-track schemes
The Ministry of Corporate Affairs ("MCA") has notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 on September 4, 2025, streamlining fast-track mergers under section 233 of the Companies Act, 2013. The changes expand eligibility to include certain unlisted companies with outstanding debt not exceeding INR 200 crore (Indian Rupees Two Hundred Crore only) and no repayment default, holding–subsidiary mergers (excluding cases where the transferor is listed), mergers among subsidiaries of the same holding company, and cross-border mergers of foreign holding companies with their wholly owned Indian subsidiaries. The amendments also mandate additional disclosures, auditor certification (Form CAA-10A), and updated procedural forms (CAA-9, CAA-10, CAA-11 and CAA-12) to enhance regulatory scrutiny and ensure compliance.
Unique Identification Authority of India (UIDAI)
1.1.11. UIDAI observes rise in Aadhaar authentication transactions
The Unique Identification Authority of India (UIDAI) recorded 221 crore Aadhaar authentication transactions in August 2025, a 10% increase over August 2024.
Monetary Penalties
1.1.12. RBI imposes penalties on ten banks for regulatory non-compliance
RBI has imposed monetary penalties on the following institutions -
|
S.No. |
Name of Bank |
Amount of Penalty |
Grounds for Penalty |
|---|---|---|---|
|
1. |
The Ottapalam Co-operative Urban Bank Ltd., Palakkad, Kerala |
INR 1,00,000 (Indian Rupees One Lakh only) |
Noncompliance with specific directions issued by RBI under 'Supervisory Action Framework (SAF)' and non-compliance with certain directions issued by RBI on 'Master Direction - Credit Card and Debit Card - Issuance and Conduct Directions, 2022'. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
|
2. |
The District Co-operative Central Bank Ltd, Bidar, Karnataka |
INR 5,50,000 (Indian Rupees Five Lakh Fifty Thousand only) |
Contravention of provisions of Sections 20 and 31 read with Section 56 of the Banking Regulation Act, 1949. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
|
3. |
Raigad District Central Co-op Bank Ltd, Maharashtra |
INR 2,10,000 (Indian Rupees Two Lakh Ten Thousand only) |
Contravention of provisions of Section 20 of the Banking Regulation Act, 1949. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
|
4. |
Tripura State Co-operative Bank Limited |
INR 7,50,000 (Indian Rupees Seven Lakh Fifty Thousand only) |
Non-compliance with certain directions issued by RBI on 'Know Your Customer (KYC)'. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A (1)(c) read with Sections 46 (4)(i) and 56 of the Banking Regulation Act, 1949. |
|
5. |
The Manipur Women's Co-operative Bank Limited |
INR 1,60,000 (Indian Rupees One Lakh Sixty Thousand only) |
Non-compliance with the certain directions issued by RBI on 'Exposure Norms and Statutory/Other Restrictions - UCBs'. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A (1)(c) read with Sections 46 (4)(i) and 56 of the Banking Regulation Act, 1949. |
|
6. |
Progressive Mercantile Co-operative Bank Limited, Dist. Ahmedabad, Gujarat |
INR 3,00,000 (Indian Rupees Three Lakh only) |
Non-compliance with the certain directions issued by RBI on 'Inspection & Audit Systems in Primary (Urban) Co-operative Banks', 'Know Your Customer' and 'Customer Protection - Limiting Liability of Customers of Co-operative Banks in Unauthorized Electronic Banking Transactions'. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
|
7. |
Sikkim State Co-operative Bank Limited, Sikkim |
INR 50,000 (Indian Rupees Fifty Thousand only) |
Non-compliance with certain directions issued by RBI on 'Know Your Customer (KYC)'. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
|
8. |
PhonePe Limited (formerly known as PhonePe Private Limited) |
INR 21,00,000 (Indian Rupees Twenty-One Lakh only) |
Non-compliance with certain directions issued by RBI on 'Prepaid Payment Instruments (PPIs)'. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007. |
2. Key Asian Markets - Philippines and Indonesia
2.1. Philippines
2.2.1. BSP announces revised Discount Window Facility interest rates
The Bangko Sentral ng Pilipinas ("BSP") has set new interest rates for its Discount Window Facility (DWF) effective September 9, 2025, with Peso loans carrying 6.1914 per cent (six point one nine one four per cent) for 1–90 days (one-ninety days).
2.2.2. BSP reports USD 376 Million FDI net inflows in June 2025; year-to-date level at USD 3.4 Billion
BSP announced that net Foreign Direct Investment (FDI) inflows reached USD 376 million (United States Dollar Three Hundred Seventy-Six Million only) in June 2025, a 17.8 per cent (seventeen point eight per cent) decline from USD 457 million (United States Dollar Four Hundred Fifty-Seven Million only) in June 2024, with lower reinvestment of earnings and net debt instruments outweighing higher equity capital placements, particularly from Japan. Year-to-date inflows stood at USD 3.4 billion (United States Dollar Three Billion Four Hundred Million only), down 23.8 per cent (twenty-three point eight per cent) from USD 4.5 billion (United States Dollar Four Billion Five Hundred Million only) in the same period of 2024, as investments flowed mainly into manufacturing, real estate, wholesale and retail trade, and financial and insurance sectors.
2.2. Indonesia
2.2.1. Bank Indonesia reports Q2 2025 IIP net liability rise to USD 244.3 Billion as foreign liabilities outpace assets
Indonesia's net liability in its International Investment Position ("IIP") rose in the second quarter of 2025 to USD 244.3 Billion (United States Dollar Two Hundred Forty-Four Billion Three Hundred Million only), up from USD 226.3 Billion (United States Dollar Two Hundred Twenty-Six Billion Three Hundred Million only) in the first quarter; the increase reflected a larger growth in Foreign Financial Liabilities USD 781.1 Billion (United States Dollar Seven Hundred Eighty-One Billion One Hundred Million only)) compared to Foreign Financial Assets (USD 536.8 billion (United States Dollar Five Hundred Thirty-Six Billion Eight Hundred Million only)), with long-term instruments dominating liabilities at 92.2 per cent (ninety-two point two per cent) of the structure, and the IIP to Gross Domestic Product ratio at 17.2 per cent (seventeen point two per cent).
2.2.2. BI reports August reserves at USD 150.7 Billion as external debt repayments and rupiah stabilisation weigh
Indonesia's official reserve assets stood at USD 150.7 billion (United States Dollar One Hundred Fifty Billion Seven Hundred Million only) at end-August 2025, down from USD 152.0 billion (United States Dollar One Hundred Fifty-Two Billion only) in July; the level equals 6.3 (six point three) months of imports, or 6.1 (six point one) months including Government external debt service, and remains above adequacy norms, with Bank Indonesia citing Government external debt repayments and foreign-exchange interventions to stabilise the rupiah amid high global uncertainty; the central bank expects reserves to stay adequate, supported by exports and prospective capital inflows.
3. Trends
3.1. RBI may allow lenders to remotely lock financed phones to curb small-loan defaults
RBI is preparing a revision to the Fair Practices Code that would permit lenders to remotely lock mobile phones bought on credit upon borrower default, with explicit borrower consent and no access to personal data; if finalised under the Reserve Bank of India Act, 1934, this could materially lower recovery costs for non-bank lenders focused on sub-INR 1,00,000 (Indian Rupees One Lakh only) tickets.
3.2. Banks expect an uptick in MSME lending driven by festive demand and GST cuts
Bankers report that festive season demand, coupled with recent GST (Goods & Services Tax) rate cuts, may boost credit demand from MSMEs (Micro, Small & Medium Enterprises). The shift toward domestic markets by companies hit by American tariffs could increase working-capital needs, potentially increasing non-food credit by a noticeable margin.
3.3. SEBI may relax IPO norms and simplify FPI entry
Reports indicate the SEBI meeting on September 12, 2025, may consider easing IPO (Initial Public Offering) rules for very large issuers, extending timelines to meet minimum public shareholding, expanding anchor participation to insurers and pensions, and creating a single-window entry for low-risk FPI (Foreign Portfolio Investor) applicants; these are proposals, not final rules.
3.4. Banks seen trimming FY26 dividends as profitability softens
Analysts expect Indian banks to reduce dividend payouts in Financial Year (FY) 26 due to slower loan growth and margin pressure, with aggregate payouts projected to fall by 4.2 per cent (four point two per cent).
4. Sector Overview
4.1. Rupee hits record low then steadies on Fed hopes
The rupee hit a record low of 88.44 (eighty-eight point four four) per United States dollar before stabilising near 88.30 (eighty-eight point three zero) on September 12 amid expectations of a Federal Reserve (Fed) rate cut; traders cited persistent dollar demand and tariff-driven portfolio outflows even as the RBI intervened to curb volatility.
4.2. Bond yields ease; 10-year near 6.46 per cent
Benchmark government bond yields softened this week, with the 10-year settling around 6.46 per cent (six point four six per cent) and traders guiding a 6.45–6.49 per cent (six point four five to six point four nine per cent) range as softer United States data bolstered rate-cut bets; supply concerns remained contained ahead of the scheduled weekly auction.
4.3. Fitch lifts India FY26 growth view to 6.9 per cent
Fitch Ratings raised its FY26 real GDP growth forecast for India to 6.9 per cent (six point nine per cent) from 6.5 per cent (six point five per cent), citing resilient domestic demand, while flagging risks from new United States tariffs; the agency still sees growth above 6 per cent (six per cent) through FY28.
5. Business Updates
5.1. SMBC exits Kotak Mahindra Bank via INR 6,256 crore block deal
Japan's Sumitomo Mitsui Banking Corporation (SMBC) sold 1.62 per cent (one point six two per cent) of Kotak Mahindra Bank through block trades worth INR 6,256 Crore (Indian Rupees Six Thousand Two Hundred Fifty-Six Crore only) across September 10, 2025 and September 11, 2025, marking a full exit; pricing was in the INR 1,950 (Indian Rupees One Thousand Nine Hundred Fifty only) to INR 1,970 (Indian Rupees One Thousand Nine Hundred Seventy only) range per share, as reported from exchange data.
5.2. Yes Bank gets RBI nod to alter Articles enabling nominee directors
RBI approved amendments to Yes Bank's Articles of Association to permit the appointment of nominee directors, a condition tied to incoming strategic investors; this board-level clearance is a completed step within the transaction framework.
5.3. PNB Housing Finance board approves up to INR 5,000 crore NCD issue
PNB (Punjab National Bank) Housing Finance's board cleared fundraising of up to INR 5,000 Crore (Indian Rupees Five Thousand Crore only) via Non-Convertible Debentures (NCDs) on a private placement basis, in one or more tranches with or without a green-shoe option.
5.4. Bajaj Broking rolls out "Privé" ultra-HNI service
Bajaj Broking introduced "Privé", a premium brokerage service for ultra-high-net-worth clients, signalling expansion of value-added wealth offerings within retail broking.
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