Banking & Finance Digest April 13, 2026

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1. Regulatory Updates

1.1. India

Reserve Bank of India (RBI)

1.1.1. Reserve Bank of India (“RBI”) invites comments on the Draft ‘Reserve Bank of India (Branch Authorisation) Amendment Directions, 2026

Based on recommendations from a joint committee (RBI, DFS, IBA, and NABARD) to strengthen last-mile financial inclusion in rural and underserved areas, the Reserve Bank of India (RBI) has issued Draft Amendment Directions (Branch Authorisation), 2026, for various bank categories. Released on April 06, 2026, the proposals seek to enhance the efficiency of the Business Correspondent (BC) model by introducing a structured classification—branch, BC-Banking Outlet (BC-BO), and BC-Banking Touchpoint (BC-BT)—while simplifying eligibility criteria and merging Business Facilitators (BFs) into the BC framework. Additionally, the draft aims to bring uniformity in BC commission structures and mandates better service monitoring, with public comments invited on these proposals until May 5, 2026, via the 'Connect 2 Regulate' portal.

1.1.2. RBI invites public comments on Draft Amendment Directions on ‘Review of guidelines on inclusion of quarterly profits to Common Equity Tier 1 (CET1) capital for computation of Capital to Risk weighted Assets Ratio (CRAR) for Banks

The RBI has issued draft amendment directions for 2026 to streamline how Commercial, Small Finance, and Payments Banks include quarterly profits in their Common Equity Tier 1 (CET1) capital. The proposed changes aim to simplify the calculation of the Capital to Risk-weighted Assets Ratio (CRAR) by removing the existing requirement that a bank's incremental provisions for non-performing assets (NPAs) must not deviate by more than 25 per cent from the previous year's average. This policy shift, originally announced in the April 2026 Statement on Developmental and Regulatory Policies, seeks to modernise prudential norms and provide banks with more consistent capital recognition. Stakeholders are invited to submit their feedback on these revisions to the Department of Regulation by April 29, 2026, either through the RBI’s "Connect 2 Regulate" portal, email, or traditional mail.

1.1.3. RBI invites public comments on the draft Amendment Directions on ‘Investment Fluctuation Reserve

The RBI has released a series of draft Amendment Directions for 2026 aimed at modifying the existing Investment Fluctuation Reserve (IFR) instructions across various banking sectors, including commercial, cooperative, regional rural, and payments banks. These amendments focus on updating guidelines related to the classification, valuation, and operation of investment portfolios, as well as refining capital adequacy norms and financial statement disclosures. To ensure a collaborative regulatory approach, the RBI is inviting feedback from banks and stakeholders until April 29, 2026. Comments can be submitted through the 'Connect 2 Regulate' portal on the RBI website or sent directly to the Chief General Manager of the Market Risk Group within the Department of Regulation.

1.1.4. RBI invites comments on Draft “Reserve Bank of India (Governance) Amendment Directions, 2026”

The RBI has issued draft Amendment Directions for 2026, proposing a shift to principle-based guidance for bank board agendas to enhance focus on strategy and risk management. This initiative aims to streamline reporting across commercial, small finance, payments, and local area banks, with public comments invited through the 'Connect 2 Regulate' platform or email until May 07, 2026.

1.1.5. RBI Issues Draft Directions for ‘Trade Receivables Discounting System’

To address the financing constraints faced by Micro, Small, and Medium Enterprises (MSMEs) in converting trade receivables into liquid funds, the Reserve Bank of India (RBI) has introduced the draft 'Reserve Bank of India (Trade Receivables Discounting System) Directions' on April 08, 2026. Following a comprehensive review aimed at rationalising and harmonising existing guidelines for TReDS platforms, this new draft seeks to enhance the efficiency of financing mechanisms for MSME sellers. Regulated entities, stakeholders, and the public are invited to submit feedback and comments on these proposed directions via the 'Connect 2 Regulate' section on the RBI website by May 01, 2026.

1.1.6. RBI releases Circular on Guidelines to facilitate faster cross-border inward payments

Following a review of stakeholder feedback on the October 2025 draft, the Reserve Bank of India has issued final guidelines to expedite inward cross-border payments, addressing delays in beneficiary credit and improving information sharing. The directive mandates efficient handling of remittances, ensuring faster processing and better service for recipients.

1.1.7. RBI invites public comments on Discussion Paper - Exploring safeguards in digital payments to curb frauds

To address the rapid rise in sophisticated digital payment frauds alongside the unprecedented growth of digital transactions in India, the Reserve Bank of India (RBI) has released a "Discussion Paper on Exploring safeguards in digital payments to curb frauds," following its announcement on February 6, 2026. Aligned with the goal of securing the digital ecosystem, this paper introduces several measures designed to enhance security, such as voluntary customer controls, transaction limits, and potential authentication enhancements. Public feedback on these proposed safeguarding measures is invited via the 'Connect 2 Regulate' portal on the RBI website until May 8, 2026.

1.1.8. Utkarsh 2029 – Reserve Bank of India’s Medium-term Strategy Framework for 2026-29

Building on the milestones of its previous 2023–2025 roadmap, the Reserve Bank of India has introduced Utkarsh 2029, a new medium-term strategy framework for the period of April 2026 to March 2029. This forward-looking framework is anchored by six strategic pillars—robust regulations, customer centricity and inclusive finance, competitive markets, effective technology, a future-ready organisation, and a global India focus—each aimed at aligning the Bank's priorities with emerging economic and technological challenges. While routine operations continue under annual plans, this overarching strategy is strictly monitored by a dedicated Sub-committee of the Central Board to ensure the effective realization of its medium-term deliverables.

1.1.9. RBI invites public comments on the draft Amendment Directions on review of methodology for identification of NBFC-UL and inclusion of Government owned NBFCs in NBFC-UL

The Reserve Bank of India has released draft amendment directions for 2026 to simplify the identification of Upper Layer Non-Banking Financial Companies (NBFC-UL) and ensure regulatory neutrality across ownership types. The proposed changes replace the previous complex parametric scoring and "top ten" ranking with a straightforward asset size threshold of INR 1,00,000 crore (Indian Rupees One Lakh Crore only) and above. Additionally, the framework now allows for the inclusion of eligible government-owned NBFCs in the Upper Layer, moving them from the Base or Middle Layers to align with private-sector standards. Stakeholders, including the public and NBFCs, are invited to submit their feedback on these concentration risk and registration amendments by May 04, 2026, via the RBI’s website or formal correspondence.

Securities and Exchange Board of India (SEBI)

1.1.10. SEBI issues relaxation on penal actions for non-compliance with Minimum Public Shareholding requirements

Securities and Exchange Board of India (“SEBI”) has granted a one-time relaxation from the penal provisions of its Master Circular on compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of Minimum Public Shareholding (“MPS”) non-compliance. Citing representations about difficulties in meeting MPS requirements due to capital market volatility linked to geopolitical tensions in the Middle East, SEBI has directed recognised stock exchanges and depositories not to levy fines, freeze promoter shareholdings or take other penal actions under the Master Circular against listed entities whose due date for MPS compliance falls between 1 April 2026 and 30 September 2026, and to withdraw any such penal actions already initiated during that period. The circular is effective immediately and stock exchanges have been asked to notify listed entities and, where needed, amend their bye laws, rules and regulations.

1.1.11. SEBI issues circular on mechanism for lock-in of pledged shares under ICDR Regulations, 2018

SEBI has issued a circular as part of its ease of doing business initiative, operationalising a mechanism for lock in of pledged shares under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Following a 21 March 2026 amendment to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, specified securities on which a formal lock in cannot be created may now be recorded as “non-transferable” by depositories for the duration of the applicable lock in period, with issuers required to embed enabling provisions in their articles of association, intimate lenders and pledgees appropriately and make suitable disclosures in offer documents, while stock exchanges, depositories and merchant bankers must ensure compliance with the new framework.

International Financial Services Centres Authority (IFSCA)

1.1.12. IFSCA mandates prior approval for PSP participation in Rupee Drawing Arrangements

IFSCA has issued a circular clarifying requirements for Payment Service Providers (PSPs) entering into Rupee Drawing Arrangements (RDA) in the IFSC. The circular provides that PSPs must obtain prior approval from the Authority for participation in the RDA scheme as a non-resident Exchange House, in line with the Reserve Bank of India’s Master Direction on Rupee/Foreign Currency Vostro Accounts dated January 1, 2016. It further requires PSPs to submit, along with the approval request, a comprehensive framework detailing processes to ensure compliance with the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022 and other applicable laws for transactions under the RDA.

1.1.13. IFSCA clarifies segregation of fiduciary roles for fund management schemes in IFSC

IFSCA has issued a circular on governance and oversight of schemes in IFSC, clarifying the segregation of roles of fiduciaries under the IFSCA (Fund Management) Regulations, 2025. The circular reiterates that Fund Management Entities (FMEs) are required to appoint fiduciaries such as trustees, directors, or designated partners depending on the structure of the scheme, and that such fiduciaries must adhere to prescribed standards of conduct including due diligence and independent judgment. It further clarifies that FMEs shall not appoint an entity acting as a fiduciary to also provide fund administration, valuation, audit, or lending and financing services to the same scheme, whether directly or through associates. Existing schemes are required to comply with this requirement on or before September 30, 2026.

1.1.14. IFSCA revises reporting norms for capital market intermediaries in IFSC

IFSCA has issued a circular revising reporting norms for Capital Market Intermediaries (CMIs) in IFSC under the IFSCA (Capital Market Intermediaries) Regulations, 2025. The circular introduces updated and expanded reporting formats to cover new categories of CMIs, including Global Access Providers, Credit Rating Agencies, ESG Ratings and Data Products Providers, and Research Entities, and requires CMIs to submit operational data in specified formats on a quarterly basis. The reporting framework includes general information, grievance redressal data, video-based customer identification reporting, and compliance with Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer Guidelines, with certain compliance sheets to be submitted half-yearly. It further prescribes timelines for submission within 21 calendar days from the end of each quarter, specifies separate reporting channels for different categories of intermediaries including submission to Market Infrastructure Institutions where applicable, and mandates continued reporting in cases of suspension or cancellation until formally communicated. The circular supersedes the earlier circular dated February 08, 2024 and comes into force from April 1, 2026, with the objective of enhancing supervisory efficiency, standardising reporting, and strengthening regulatory oversight of CMIs in IFSC.

1.1.15. IFSCA Invites Comments on SAC Code Mapping and Foreign Currency Expense Reporting Framework

The International Financial Services Centres Authority has issued a consultation paper proposing a standardised framework for mapping Service Accounting Codes and introducing foreign currency expense reporting for IFSC units under the Service Exports Reporting Form and Monthly Performance Report. The proposed framework provides for standardisation of SAC codes to ensure consistent classification of financial services revenue at the invoice level and introduction of a reporting field for aggregate monthly expenses incurred in foreign currency to enable estimation of net foreign currency value creation, calculated as the difference between gross foreign currency receipts and expenses. The consultation paper also outlines guiding principles for classification, introduces enhanced SERF categories based on service destination, and seeks stakeholder feedback on operational feasibility, coverage of services, and implementation challenges. The proposal is intended to enhance consistency, comparability, and analytical usefulness of data, improve regulatory oversight, and enable accurate assessment of value creation within the IFSC ecosystem.

1.1.16. IFSCA Notifies Pension Fund Regulations, 2026

IFSCA has notified the IFSCA (Pension Fund) Regulations, 2026, establishing a framework for registration, regulation, and supervision of pension funds in IFSC. The regulations mandate that no entity shall operate as a pension fund without obtaining registration from the Authority through the SWIT portal with prescribed fees and documentation, and prescribe governance requirements including appointment of at least two Key Managerial Personnel for fund and risk management, a Compliance Officer reporting to the Board, and a Board comprising a minimum of four directors with at least 50 per cent independent directors, with all directors, KMPs and controlling shareholders required to meet fit and proper criteria. The framework provides subscriber flexibility to determine contribution frequency and amount and permits switching of pension funds up to two times per financial year, while allowing pension funds to prescribe minimum contribution amounts with prior approval. It also enables offering of healthcare benefit options through dedicated savings accounts with disclosure in scheme documents, and mandates clear disclosures, availability of educational materials, and accessible communication of performance and scheme details. The regulations aim to promote long-term retirement savings, ensure transparency and regulatory oversight, protect subscriber interests, and maintain the integrity of the pension ecosystem.

Insurance Regulatory and Development Authority of India (IRDAI)

1.1.17. IRDAI Constitutes Sub-Committee on Health Insurance Under Insurance Advisory Committee

The Insurance Regulatory and Development Authority of India has constituted a sub-committee of the Insurance Advisory Committee to review the private health insurance landscape in India. The sub-committee will examine aspects including coverage, penetration, claims experience, product design, grievance redressal, and consumer experience, and will recommend regulatory, policy, and operational measures to promote innovation, wider coverage, improved risk pooling, and enhanced financial protection. The mandate also includes reviewing healthcare provider networks, hospital tariffs, fraud control mechanisms, and digital systems to improve value to policyholders and reduce inefficiencies, as well as assessing the interaction between private and public health insurance schemes for opportunities relating to complementarity, portability, and convergence. Further, the sub-committee will consider recommendations of working groups set up by the Confederation of Indian Industry on issues such as code of conduct, commercial engagement frameworks, adoption of National Health Claims Exchange, analysis of claims trends and medical inflation, and development of a basic product framework. The initiative aims to enhance trust, improve consumer experience, and strengthen the health insurance ecosystem.

1.1.18. IRDAI Issues Revised Information and Cyber Security Guidelines

The Insurance Regulatory and Development Authority of India has issued revised information and cyber security guidelines applicable to insurers, insurance intermediaries, and the Insurance Information Bureau, requiring strict compliance from the current financial year. The revised framework provides for enhanced governance and risk management measures, including mandating quarterly meetings of the Information Security Risk Management Committee, requirement for adequate budgeting for cyber security aligned with organisational risk appetite, and closure of identified gaps in cyber security assurance and risk audit reports within 12 months. The guidelines also mandate constitution of an IT Steering Committee with senior management representation to oversee IT strategy, regulatory compliance, and protection of policyholder data, with quarterly meetings chaired by the Chief Technological Officer, and require inclusion of independent external experts with cybersecurity expertise in the Risk Management Committee. The revised guidelines are intended to strengthen cyber resilience, governance mechanisms, and preparedness of regulated entities against evolving cyber threats.

Miscellaneous

Monetary Penalties

1.1.19. RBI imposes penalties on 1 bank for regulatory non-compliance

RBI has imposed monetary penalties on the following institutions:

2. Key Asian Markets - Philippines and Indonesia

2.1. Philippines

2.2.1. Gross international reserves stand at USD 107.5 billion in March 2026

Gross International Reserves (GIR) settled at USD 107.5 billion (United States Dollars One Hundred Seven Billion Five Hundred Million only) as of end-March 2026, based on preliminary data. The reserves provide an external liquidity buffer equivalent to 7.1 months (Seven point One months) of imports of goods and payments of services and primary income, and cover about 3.9 times (Three point Nine times) the country’s short-term external debt based on residual maturity. GIR comprise foreign-denominated securities, foreign exchange, and other reserve assets including gold, and serve as a buffer against external economic shocks by enabling the country to meet import requirements, service foreign debt obligations, and support currency stability.

2.2.2. BSP notes S&P affirmation of BBB+ rating with stable outlook

BSP has noted the affirmation of the country’s long-term credit rating of BBB+ and short-term rating of A-2 by S&P Global Ratings, with a revision in outlook from positive to stable amid global risks arising from the Middle East conflict. S&P stated that the ratings reflect above-average economic growth, projecting growth at 5.8 per cent (Five point Eight per cent) in 2026 and around 6.2 per cent (Six point Two per cent) over 2027 to 2029, while the stable outlook reflects expectations of sustained growth alongside a declining fiscal deficit despite heightened external and fiscal risks. The assessment also highlights the strength of the external position, supported by gross international reserves at USD 107.5 billion (United States Dollars One Hundred Seven Billion Five Hundred Million only), equivalent to 7.1 months (Seven point One months) of imports and about 3.9 times (Three point Nine times) short-term external debt, as well as the BSP’s track record in maintaining low inflation and ensuring banking system stability. The development indicates continued investor confidence and supports access to funding, with the BSP stating it will continue to monitor domestic and global conditions to safeguard price and financial stability.

2.2. Indonesia

2.2.3. Bank Indonesia reports sustained consumer confidence in March 2026

Bank Indonesia has released the Consumer Survey for March 2026 indicating that consumer confidence in economic conditions remained solid, as reflected in a Consumer Confidence Index (CCI) of 122.9 (One Hundred Twenty-Two point Nine), which remains in the optimistic range above 100. The survey shows that confidence was supported by both current and expected economic conditions, with the Current Economic Condition Index (CECI) recorded at 115.4 (One Hundred Fifteen point Four) and the Consumer Expectation Index (CEI) at 130.4 (One Hundred Thirty point Four), both remaining at optimistic levels. The findings indicate continued positive consumer sentiment regarding present and future economic conditions.

2.2.4. Indonesia’s official reserve assets remain high at USD 148.2 billion in March 2026

Bank Indonesia has reported that Indonesia’s official reserve assets remained high at USD 148.2 billion (United States Dollars One Hundred Forty-Eight Billion Two Hundred Million only) at the end of March 2026, declining from USD 151.9 billion (United States Dollars One Hundred Fifty-One Billion Nine Hundred Million only) at the end of February 2026. The movement reflects factors including government global bond issuance, tax and services receipts, external debt repayments, and Rupiah stabilisation measures amid global financial market uncertainty. The reserve position is equivalent to 6.0 months (Six point Zero months) of imports or 5.8 months (Five point Eight months) of imports and servicing government external debt, remaining above the international adequacy standard of around three months of imports. The level of reserves is considered sufficient to support external sector resilience and maintain macroeconomic and financial system stability, with Bank Indonesia indicating continued coordination with the Government to strengthen external resilience and support sustainable economic growth.

3. Trends

3.1. Axis Bank collaborates with FHRAI to extend sector-focused banking solutions to hospitality businesses

Axis Bank Limited has entered into a Memorandum of Understanding with the Federation of Hotel and Restaurant Associations of India (“FHRAI”) to deepen its engagement with hospitality businesses across India by providing sector‑aligned banking and transaction solutions. FHRAI members will gain access to specialised current account offerings with concessions on point‑of‑sale rentals, cash management services, and reduced payment‑solution set‑up fees, along with additional financial products such as term loans, working capital lines, structured finance and dedicated relationship management, subject to eligibility and business requirements.

3.2. RBI’s TReDS reforms aim to ease MSME working capital stress and unlock market-based invoice financing

Recent changes announced by the RBI to the Trade Receivables Discounting System (“TReDS”) framework are expected to ease access to working capital for micro, small and medium enterprises (“MSMEs”) at a time when their cash cycles are under pressure from global economic disruptions. These regulatory reforms complement Union Budget measures mandating TReDS use for public sector purchases from MSMEs and introducing a credit guarantee mechanism for invoice discounting, against the backdrop of an estimated INR 8.1 Lakh Crore (Indian Rupees Eight Lakh Ten Thousand Crore only) locked in delayed MSME payments and a projected rise in MSME funding requirements from INR 50 lakh crore (Indian Rupees Fifty Lakh Crore only) in 2025 to INR 162.92 Lakh Crore (Indian Rupees One Hundred Sixty Two Lakh Ninety Two Thousand Crore only) by 2030.

3.3. Large payment aggregators intensify focus on cross-border payments, challenging banks and niche fintechs

Major payment aggregators such as Razorpay Software Private Limited (“Razorpay”), PayU Payments Private Limited (“PayU”) and Cashfree Payments India Private Limited (“Cashfree”) are scaling up cross border payments as their next growth frontier, directly challenging both incumbent banks and venture backed start ups like PayGlocal, Skydo and Xflow that are focused exclusively on this segment. Faced with margin pressure in domestic payments—where the Unified Payments Interface remains free under government policy—these players are targeting higher yield corridors such as export import transactions, software and artificial intelligence (“AI”) services sold overseas, global e commerce flows and non-resident Indian payments into India, with Cashfree reporting a 700 per cent (seven hundred per cent) increase in its cross border business (contributing roughly 10 to 15 per cent (ten to fifteen per cent) of revenues) and executives estimating that AI related businesses could account for up to 70 per cent (seventy per cent) of overall cross border flows.

4. Sector Overview

4.1. India General Insurance Sector Shows Strong Growth in FY26

India’s general insurance industry recorded strong growth in FY26, with gross written premium increasing by about 9per cent year-on-year to INR 3.36 Lakh Crore (Indian National Rupees Three Point Three Six Lakh Crores only), compared to INR 3.07 Lakh Crore (Indian National Rupees Three Point Zero Seven Lakh Crores only) in FY25, driven largely by private insurers and sustained demand for health and motor insurance supported by favourable GST-related changes. The health insurance segment remained the primary growth driver, accounting for nearly one-third of total industry premiums, with standalone health insurers significantly outperforming the market and registering 20–22 per cent (Twenty to Twenty-Two Per Cent) growth, making it the fastest-growing segment during the year.

4.2. Bankers welcome RBI’s calibrated stance and regulatory measures

Bankers and industry leaders have welcomed the Reserve Bank of India’s decision to maintain a status quo on policy rates, describing it as a prudent and well‑calibrated approach amid persisting global and domestic uncertainties. The RBI’s regulatory measures—such as the removal of the Investment Fluctuation Reserve (“IFR”) requirement, easing of capital adequacy computations and Capital And Risk-adjusted Ratio (“CRAR”), and steps to improve liquidity access for MSMEs, including rationalisation of onboarding requirements on the TReDS platform, were viewed as supportive of banks’ capital strength, liquidity management, and sustained credit growth. Bank executives noted that the RBI’s emphasis on macroeconomic stability, customer protection, and financial system resilience aligns with market expectations and reinforces confidence in India’s economic fundamentals despite geopolitical risks and commodity price volatility.

5. Business Updates

5.1. InCred Alternatives Makes Final Close of Debut Special Opportunities Credit Fund at INR 1,500 Crore

InCred Alternative Private Investments, the alternatives arm of InCred Group, announced on April 7, 2026, the final close of its maiden credit fund, InCred Special Opportunities Fund-I at its hard cap of INR 1,500 Crore (Indian Rupees One Thousand Five Hundred Crore only). The close-ended Category II Alternative Investment Fund ("AIF"), registered with Securities and Exchange Board of India (“SEBI”), received commitments from domestic family offices, ultra-high net worth individuals, and international investors. The Fund is focused on established businesses in traditional sectors including auto, power, oil & gas, and hospitality, with a mandate targeting hard asset coverage, steady cash flows, and structural downside protection. Approximately 75per cent (seventy-five per cent) of the Fund has already been deployed. The final close brings InCred Alternatives' total private credit assets under management to over USD 430 million (United States Dollars Four Hundred Thirty Million only).

5.2. Raajmarg Infra Investment Trust Receives In-Principle SEBI Registration as InvIT

SEBI granted in-principle approval to the registration of Raajmarg Infra Investment Trust ("RIIT") as an Infrastructure Investment Trust ("InvIT"). RIIT was incorporated by the National Highways Authority of India ("NHAI") as the investment manager Raajmarg Infra Investment Managers Private Limited ("RIIMPL") to unlock the monetisation potential of national highway assets and create a long-term investment instrument primarily targeting retail and domestic investors. RIIT will be required to fulfil specific conditions over the next six months, including appointment of directors, submission of requisite financial statements, and compliance with other regulatory requirements, before receiving final registration. The InvIT structure, regulated under the SEBI (Infrastructure Investment Trusts) Regulations, 2014, is expected to provide a new channel for investors to participate in India's highway infrastructure.

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