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1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI extends trading hours for call money and repo markets
The Reserve Bank of India ("RBI") has decided to extend market timings based on the recommendations of the Working Group on the Comprehensive Review of Trading and Settlement Timings (Chairperson: Shri Radha Shyam Ratho). With effect from July 01, 2025, the trading window for the call money market will be extended until 7:00 PM, while from August 01, 2025, the trading hours for market repo and Tri-Party Repo (TREP) will be extended until 4:00 PM. The trading hours for government securities, the foreign exchange market, and interest rate derivatives remain unchanged. Other recommendations remain under consideration.
1.1.2.RBI issues due diligence norms for AePS operators
RBI has issued directions titled 'Aadhaar Enabled Payment System – Due Diligence of AePS Touchpoint Operators' vide Circular No. RBI/2025-26/63 dated June 27, 2025. Effective January 01, 2026, the directions mandate banks and authorised entities to strengthen onboarding procedures, conduct enhanced due diligence, and implement fraud risk controls for AePS operators. Issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007, the move follows rising fraud incidents via AePS and aims to improve system integrity and consumer protection. NPCI, banks, and co-operative banks are covered.
1.1.3. RBI publishes MPC minutes under Section 45ZL, reaffirming transparency in monetary policymaking
Pursuant to Section 45ZL of the RBI Act, 1934, the RBI published the minutes of the 55th meeting of the Monetary Policy Committee ("MPC"), held from June 4 to 6, 2025. The section mandates disclosure of (i) the resolution adopted, (ii) individual votes, and (iii) explanatory statements from MPC members within 14 (fourteen) days. The published minutes revealed a 50 (fifty) basis point reduction in the repo rate to 5.5 per cent (five point five per cent), driven by easing inflation and moderated growth forecasts.
1.1.4. DFS convenes high-level meeting to scale ULI for inclusive credit access
The Department of Financial Services ("DFS"), Ministry of Finance, convened a high-level meeting in New Delhi to deliberate on the expansion of the Unified Lending Interface ("ULI") as a Digital Public Infrastructure (DPI). Co-chaired by the Secretary, DFS, Shri M. Nagaraju, and the Deputy Governor, RBI, Shri T. Rabi Sankar, the meeting aimed to streamline credit access through integrated technology, data, and policy. The initiative seeks to deliver frictionless credit at scale and strengthen financial inclusion through last-mile delivery.
Securities And Exchange Board of India (SEBI)
1.1.5. SEBI releases consultation paper on responsible usage of AI/ML in securities markets
The Securities and Exchange Board of India ("SEBI") has issued a consultation paper inviting public comments on proposed guiding principles for the responsible usage of Artificial Intelligence ("AI") and Machine Learning ("ML") in securities markets. The framework aims to balance innovation with safeguards, addressing investor protection, market integrity, and systemic stability. SEBI has also proposed penalty-free client code modifications by Market Makers for Exchange Traded Fund (ETF) transactions, facilitating operational efficiency in basket trades. Comments are invited by July 11, 2025, through the online platform.
1.1.6. SEBI issues updated Master Circular for Registrars to an Issue and RTAs
On June 24, 2025, the SEBI released a revised Master Circular for Share Transfer Agents ("RTAs"), consolidating prior circulars (May 2023, May 2024) to reflect evolving regulatory and investor protection priorities. Key updates include mandatory folio freezing for non-compliance with PAN, KYC, and nomination norms; integration with SCORES 2.0 and ODR platforms; mandatory cyber audits for RTAs with over 2 (two) crore folios; and enhanced grievance redressal and outsourcing controls. The Master Circular aligns with SEBI's broader push for transparency, digitalisation, and risk governance.
The International Financial Services Centres Authority (IFSCA)
1.1.7. IFSCA amends directions on usage of FCA under LRS
The International Financial Services Centres Authority ("IFSCA"), through Circular dated June 23, 2025, has amended its earlier directions (dated December 13, 2024) regarding operations of Foreign Currency Accounts ("FCA") opened by Indian resident individuals under the Liberalised Remittance Scheme ("LRS") at International Financial Services Centre (IFSC) Banking Units ("IBUs"). IBUs are now mandated to obtain a declaration from the resident individual confirming that any amount spent or remitted from the FCA aligns with either the original purpose declared under LRS or another permitted LRS purpose. The amendment is effective immediately.
Monetary Penalties
1.1.8. RBI imposes monetary penalty on Fino Payments Bank Limited
RBI has imposed a monetary penalty on Fino Payments Bank Limited. amounting to INR 29.60 Lakh (Indian Rupees Twenty-Nine Lakh Sixty Thousand only) for non-compliance with the regulatory ceiling on end-of-day balances, in violation of the RBI Directions on Licensing of Payments Banks.
1.1.9. RBI imposes monetary penalty on the Hyderabad District Co-operative Central Bank Limited., Telangana
RBI has imposed a monetary penalty on the Hyderabad District Co-operative central Bank Limited., Telangana amounting to INR 1 Lakh (Indian Rupees One Lakh only) for contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949.
1.1.10. RBI imposes monetary penalty on the Karimnagar District Co-operative Central Bank Ltd., Telangana
RBI has imposed a monetary penalty on the Karimnagar District Co-operative Central Bank Ltd., Telangana amounting to INR 1 Lakh (Indian Rupees One Lakh only) for violating Section 20 read with Section 56 of the Banking Regulation Act, 1949.
1.1.11. RBI imposes monetary penalty on the Chittoor Co-operative Town Bank Ltd., Andhra Pradesh
RBI has imposed a monetary penalty on the Chittoor Co-operative Town Bank Ltd., Andhra Pradesh amounting to INR 1 Lakh (Indian Rupees One Lakh only) for non-compliance with directions issued on Exposure Norms and Statutory / Other Restrictions – UCBs and Know Your Customer (KYC).
1.1.12. RBI imposes monetary penalty on the Karnataka Co-operative Bank Limited, Muddebihal, Karnataka
RBI has imposed a monetary penalty on the Karnataka Co-operative Bank Limited, Muddebihal, Karnataka amounting to INR 1 Lakh (Indian Rupees One Lakh only) for non-compliance with directions on Exposure Norms and Statutory / Other Restrictions – UCBs and Know Your Customer (KYC).
1.2. Bangladesh
1.2.1. Bangladesh Bank updates loan classification reporting norms
Bangladesh Bank has issued BRPD Circular No. 05 mandating scheduled banks to adopt revised CL forms and an updated EDW template from the quarter ending September 30, 2025. Fixed Term Loan classification norms have been clarified—if overdue instalments equal or exceed due instalments within three months, the loan must be classified as "Sub-standard." Existing BRPD Circular No. 15/2024 otherwise remains unchanged.
1.2.2. Bangladesh Bank clarifies remittance norms for service payments by foreign subsidiaries
Through FE Circular Letter No. 24 dated June 24, 2025, Bangladesh Bank has clarified that service-related remittances by subsidiaries to parent/group entities are permissible even if foreign shareholding is below 50 per cent (fifty per cent), provided regulatory conditions are met or business is dependent on foreign investors. The clarification expands the scope of FE Circular No. 12/2025.
1.2.3. Bangladesh Bank clarifies ADs' role in usance import contracts
Through FE Circular Letter No. 23 dated June 24, 2025, Bangladesh Bank has clarified that Authorised Dealers ("ADs") are not required to take exposure on importers for transactions under purchase/sales contracts. ADs must only follow procedural formalities and effect payments from importer-funded accounts. Non-payment obligations and performance reviews are to be assessed as per FE Circular No. 24/2024.
1.3. Sri Lanka
1.3.1. CBSL warns public against unauthorised overseas property investment promotions
The Central Bank ofSri Lanka ("CBSL") has cautioned resident individuals against responding to advertisements promoting overseas property investments and foreign financing options. Under the Foreign Exchange Act, No. 12 of 2017, such investments are only permitted up to USD 20,000 (United States Dollar Twenty Thousand only) via Personal Foreign Currency Accounts. Use of business accounts or foreign loans is strictly prohibited. Legal action may ensue.
2. Trends
2.1. PhonePe to file DRHP by August for USD 1.5 Billion IPO at USD 15 Billion valuation
Walmart backed fintech major PhonePe is set to file its draft red herring prospectus ("DRHP") by August 2025 to raise USD 1.5 billion (United States Dollar One Billion Five Hundred Million only) through an initial public offering. The offering is expected to value the Unified Payments Interface ("UPI") leader at USD 15 Billion (United States Dollar Fifteen Billion only). Kotak Mahindra Bank, Citigroup, and Morgan Stanley have reportedly been appointed as lead bankers for the issue. This move follows PhonePe's earlier transition into a public entity.
3. Business Updates
3.1. Delhi Government mandates SHe-Box registration for workplace compliance under POSH Act
The Government of NCT of Delhi, through its Department of Women and Child Development, has mandated all public and private sector entities, including subordinate offices, to register on the Sexual Harassment Electronic Box ("SHe-Box") portal. This directive, issued under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ("POSH") aims to streamline redressal and monitoring of workplace sexual harassment complaints. Supported by the Supreme Court's judgment in Aureliano Fernandes vs. State of Goa & Ors, the move reinforces employers' constitutional duty to ensure a safe work environment.
3.2. PB Fintech co-founders offload equity worth INR 920 Crore via bulk and block deals
Yashish Dahiya and Alok Bansal, co-founders of PB Fintech, have collectively sold equity shares amounting to INR 920 Crore (Indian Rupees Nine Hundred Twenty Crore only). The offloaded shares represent 1.1 per cent (one point one per cent) of the company's total outstanding equity. Institutional buyers included Goldman Sachs, Morgan Stanley, Société Générale, and Indian mutual funds such as ICICI and Tata Mutual Fund.
3.3. Meesho reconstitutes board ahead of IPO following reverse flip
In preparation for its impending initial public offering, Meesho has restructured its board of directors following a reverse flip. While Peak XV Partners' Mohit Bhatnagar and Elevation Capital's Mukul Arora retain positions as non-executive, non-independent directors, other major investors have exited the board.
3.4. Foxconn receives Taiwan's approval for USD 2.2 Billion investment in India and US
Taiwanese electronics and semiconductor manufacturer Hon Hai Precision Industry Co. ("Foxconn") has received regulatory approval from Taiwan's Ministry of Economic Affairs to invest over USD 2.2 Billion (United States Dollar Two Billion Two Hundred Million only) across India and the United States.
3.5. DAY-NRLM holds strategy session on improving business ease for SHG members
The Deendayal Antyodaya Yojana National Rural Livelihoods Mission ("DAY-NRLM") organised a high-level brainstorming session in New Delhi to identify actionable strategies for enhancing the ease of doing business for Self Help Group ("SHG") members, including Lakhpati Didis and rural entrepreneurs. Senior officials from the Ministry of Rural Development, Ministry of Skill Development & Entrepreneurship, industry stakeholders, and private partners participated. Key themes included digital enablement, branding, quality assurance, and integrating SHGs into national and global value chains.
3.6. RBI reduces priority sector lending target for Small Finance Banks to 60 per cent
RBI has revised the priority sector lending ("PSL") norms applicable to Small Finance Banks ("SFBs"), reducing the overall PSL target from 75 per cent (seventy five per cent) to 60 per cent (sixty per cent) of adjusted net bank credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBE), whichever is higher. Effective from April 01, 2025, SFBs must allocate 40 per cent (forty per cent) towards prescribed PSL sub-sectors, with the remaining 20 per cent (twenty per cent) available for allocation based on strategic advantage. This move aligns with RBI's March 2025 overhaul of PSL guidelines.
3.7. Government to offer 100 per cent compute subsidy for foundational AI models
The Government of India is reportedly extending a 100 per cent (one hundred per cent) subsidy on compute infrastructure costs to companies developing foundational AI models, including entities like Sarvam AI. The incentive aims to bolster India's capabilities in core AI research and development. Other AI workloads—such as inference models and vertical applications—will continue to be eligible for a 40 per cent (forty per cent) subsidy. This marks a strategic move to position India competitively in the global AI ecosystem.
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