1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI issues principle-based two-factor authentication framework for digital payments
RBI issued the Reserve Bank of India (Authentication Mechanisms for Digital Payment Transactions) Directions, 2025 under the Payment and Settlement Systems (PSS) Act, 2007, retaining SMS One-Time Passwords while enabling new factors, mandating at least 2 (two) factors with at least 1 (one) dynamic factor for domestic digital payments, requiring open-access interoperability for authentication and tokenisation, permitting risk-based extra checks, and fixing issuer liability to fully compensate customers for losses from non-compliant transactions; the Directions apply to all payment system providers and participants and must be implemented by April 1, 2026, while card issuers must by October 1, 2026 validate non-recurring cross-border Card Not Present (CNP) transactions on request and institute risk-based handling.
1.1.2. RBI cancels Certificate of Registration of Datta Finance and Trading Private Limited due to irregular lending practices
The Reserve Bank of India ("RBI") cancelled the Certificate of Registration ("CoR") issued to the Non-Banking Financial Company ("NBFC") of Datta Finance and Trading Private Limited. The CoR was cancelled by RBI as the company had violated RBI guidelines on code of conduct in outsourcing of financial services in its digital lending operations by outsourcing its core decision-making functions such as sourcing of the customers, conducting their due diligence, disbursement of loans, servicing of loans, recovery of loans granted etc. as well as Know Your Customer (KYC) verification to the Service Provider.
1.1.3. RBI enables online CoR surrender for NBFCs and HFCs via PRAVAAH
The RBI announced that applications for voluntary surrender and cancellation of CoR by an NBFC and Housing Finance Company (HFC) can now be filed online via the PRAVAAH portal, introduced on May 28, 2024; it clarified that filing an application does not itself cancel the CoR, and entities must continue to follow applicable guidelines and submit regulatory or supervisory returns until cancellation is formally communicated by the Reserve Bank.
1.1.4. RBI sets GoI WMA limit at INR 50,000 crore for October 2025–March 2026
RBI in consultation with Government of India (GoI), set the Ways and Means Advances ("WMA") limit for October 2025 to March 2026 at INR 50,000 Crore (Indian Rupees Fifty Thousand Crore only); the Bank may float fresh market loans once 75 per cent (seventy-five per cent) of the limit is utilised, retains flexibility to revise the limit as circumstances warrant, and fixed the interest rate at the Repo Rate for WMA and 2 per cent (two per cent) above the Repo Rate for overdrafts.
1.1.5. RBI issues standardised rules for settling deceased customers' claims
RBI issued the "Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025", applicable to all commercial and co-operative banks, to be fully implemented by March 31, 2026. Key changes: payments to nominee/survivor are a valid discharge without insisting on probate or succession documents, and simplified settlement where no nomination/survivorship exists up to INR 15 Lakh (Indian Rupees Fifteen Lakh only) for banks and INR 5 Lakh (Indian Rupees Five Lakhs only) for co-operative banks, with a defined document set.
1.1.6. RBI permits SPDs to trade Rupee NDDCs
RBI allowed Standalone Primary Dealers ("SPDs") authorised as Authorised Dealer Category-III (AD Cat-III) to transact in Rupee non-deliverable derivative contracts ("NDDCs") with residents and non-residents, alongside Authorised Dealer Category-I (AD Cat-I) banks operating International Financial Services Centre ("IFSC") Banking Units ("IBUs"), with immediate effect; the Master Direction – Risk Management and Inter-Bank Dealings has been updated accordingly.
Securities and Exchange Board of India (SEBI)
1.1.7. SEBI issues consultation paper on review of framework to address the 'technical glitches' in Stock Brokers Electronic Trading Systems
The Securities Exchange Board of India ("SEBI") has issued a consultation paper to review rules for "technical glitches" in stock brokers' electronic trading systems, proposing a narrower definition that excludes after-hours issues and events beyond broker control, limiting applicability to brokers with more than 10,000 (ten thousand) clients which would exempt about 457 (four hundred fifty-seven) smaller firms, easing financial disincentives for low-impact incidents, requiring stock exchanges to disclose glitch instances, and strengthening capacity planning and reporting timelines.
1.1.8. SEBI issues digital accessibility compliance timetable for regulated entities
SEBI released Compliance Guidelines to operationalise its July 31, 2025 circular on the Rights of Persons with Disabilities Act, 2016 (RPwD Act), requiring Regulated Entities (REs) to: list all investor-facing digital platforms by September 30, 2025; appoint International Association of Accessibility Professionals (IAAP)-certified auditors by December 14, 2025; complete initial accessibility audits by April 30, 2026; remediate findings and confirm compliance by July 31, 2026; and file annual accessibility-audit compliance within 30 (thirty) days of each financial year from April 30, 2027; submissions route via stock exchanges or depositories for stock brokers and depository participants, via Bombay Stock Exchange Limited for Investment Advisers (IAs) and Research Analysts (RAs), and otherwise directly to SEBI by email in prescribed formats with consolidated reports when multiple platforms exist.
1.1.9. SEBI tightens Custodian norms: higher net worth, broader services, new conduct code
SEBI has issued the Securities and Exchange Board of India (Custodian) (Amendment) Regulations, 2025, effective from March 18, 2026; key changes include inserting "physical" before "securities" to clarify vaults for safe custody of physical instruments, raising the net-worth floor from 50 (fifty) crore rupees to 75 (seventy-five) crore rupees: with existing custodians getting 3 (three) years and the net-worth to be maintained separately from any capital-adequacy requirements for other activities, recasting regulations to allow custodians to offer additional financial-services activities, with non-bank custodians subject to Board-specified conditions, relaxing the activity-segregation rule via a proviso subject to conditions, introducing new mandated governance, risk-management, scalable infrastructure and an orderly wind-down framework, and expanding the Third Schedule to add a detailed code of conduct including compliance with directions of SEBI and RBI, fair competition, truthful disclosures, robust internal controls, "fit and proper" management, prompt cooperation with regulators, and client-protection duties.
International Financial Services Centres Authority (IFSCA)
1.1.10. IFSCA seeks comments on IBU internet banking circular review
The International Financial Services Centres Authority ("IFSCA") has issued a public consultation on a draft circular reviewing internet banking services for IBUs under the International Financial Services Centres Authority Act, 2019. It proposes specific compliance across three categories: Information service, Interactive information exchange service, and Transactional service, including disclosure of offered currencies and cut-off timings, a unified digital dashboard with real-time balances, live conversion rates, machine-readable statements, inward-remittance instructions, premature-withdrawal requests, and SMS or email alerts, while transactional features include dual-layer authentication using hardware tokens and/or One-time passwords (OTPs), intra- and inter-bank payments, fixed-deposit creation, corporate user-access management with maker-checker controls, pre-approved beneficiary lists and white-labelling options. Comments are due by October 13, 2025 and IBUs must comply by March 31, 2026 once the circular is effective.
Monetary Penalties
1.1.11. RBI imposes penalties on ten banks for regulatory non-compliance
RBI has imposed monetary penalties on the following institutions -
Sr. No. |
Name of Bank |
Amount of Penalty |
Grounds for Penalty |
1. |
Gayatri Co-operative Urban Bank Ltd., Jagtial, Telangana |
INR 10,00,000 (Indian Rupees Ten Lakh only) |
Non-compliance with certain directions issued by RBI on 'Marketing / Distribution of Mutual Fund / Insurance Products by Urban Cooperative Banks'. 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 Tamil Nadu Circle Postal Co-operative Bank Ltd., Tamil Nadu |
INR 50,000 (Indian Rupees Fifty Thousand only) |
Non-compliance with specific directions issued by RBI under 'Supervisory Action Framework (SAF)'. 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. |
The Guntur District Co-operative Central Bank Limited, Andhra Pradesh |
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. |
4. |
The South Canara District Central Cooperative Bank Ltd, Karnataka |
INR 1,50,000 (Indian Rupees One Lakh Fifty Thousand only) |
Non-compliance with certain directions issued by RBI on 'Housing finance' read with 'Enhancement in Individual housing loan limits and credit to Commercial Real Estate - Residential Housing (CRE-RH)' and contravention of provisions of Section 19 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. |
5. |
Makarpura Industrial Estate Co-operative Bank Ltd., Vadodara, Gujarat |
INR 2,00,000 (Indian Rupees Two Lakh only) |
Non-compliance with certain directions issued by RBI on 'Know Your Customer (KYC)' and 'Basic Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)', read with 'Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs) – A Graded Approach'. 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. |
Muthoot FinCorp Limited |
INR 2,70,000 (Indian Rupees Two Lakh Seventy Thousand only) |
Non-compliance with directions issued by RBI on 'Internal Ombudsman'. This penalty has been imposed in exercise of powers conferred on RBI under clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934. |
2. Key Asian Markets - Philippines and Vietnam
2.1. Philippines
2.2.1. BSP to close digital bank licence window by December 2025
Bangko Sentral ng Pilipinas ("BSP") said it will stop accepting new digital bank licence applications from December 1, 2025, following the Monetary Board's moratorium approved on September 18, 2025; complete applications filed by November 30, 2025 will be evaluated on a first-come, first-served basis, with incomplete or non-compliant submissions rejected after the deadline; the pause aims to balance innovation with financial stability by admitting only applicants with sound governance, robust risk management, and compelling value propositions; the Philippines currently has 6 (six) licensed digital banks, and in January 2025 the cap was raised to 10 (ten).
2.2.2. BSP consumer confidence improves in Q3 2025; outlook strengthens
BSP said its Consumer Expectations Survey (CES) showed the overall consumer confidence index ("CI") turned less negative to - 9.8 per cent (minus nine point eight per cent) in Q3 2025 from - 14.0 per cent (minus fourteen point zero per cent) in Q2 2025, with respondents citing new income sources, higher earnings, and more working family members; the CI for the next quarter and the next 12 (twelve) months also improved, and households expect inflation over the next 12 (twelve) months to stay within the National Government's target range, indicating anchored expectations that support spending and jobs.
2.2.3. BSP BES shows business confidence dips in Q3 2025, improves for Q4 2025
BSP reported from its Business Expectations Survey (BES) that the overall Business Confidence Index fell to 23.2 per cent (twenty-three point two per cent) in Q3 2025 from 28.8 per cent (twenty-eight point eight per cent) in Q2 2025, with firms citing weak demand during the "ghost month," rainy or typhoon season, and global headwinds; sentiment for Q4 2025 strengthened with a Confidence Index of 49.5 per cent (forty-nine point five per cent) while the outlook for the next 12 (twelve) months softened to 48.1 per cent (forty-eight point one per cent), and businesses expect inflation over the next 12 (twelve) months to stay within the National Government's target range.
2.3. Indonesia
2.3.1. Bank Indonesia says M2 growth quickened to 7.6 per cent in August 2025
Bank Indonesia ("BI") reported that broad money supply (M2) grew 7.6 per cent (seven point six per cent) year-on-year in August 2025 to IDR 9,657.1 trillion (Indonesian Rupiah Nine Thousand Six Hundred and Fifty-Seven Trillion and One Hundred Billion only), up from 6.6 per cent (six point six per cent) in July 2025, driven by faster narrow money supply (M1) at 10.5 per cent (ten point five per cent) and quasi-money at 5.6 per cent (five point six per cent); supporting factors included net foreign assets rising 10.7 per cent (ten point seven per cent) to IDR 2,024.9 trillion (Indonesian Rupiah Two Thousand and Twenty-Four Trillion and Nine Hundred Billion only), credit disbursement up 7.0 per cent (seven point zero per cent), and net receivables to the Central Government improving to 5.0 per cent (five point zero per cent) after a 6.2 per cent (six point two per cent) contraction in July 2025.
2.3.2. Bank Indonesia releases the Rupiah stability indicator development
BI released its Rupiah stability indicators for late September 2025, showing the rupiah closing at Rp 16,735 per USD (Rupiah Sixteen Thousand Seven Hundred Thirty-Five only) on September 25, 2025, and opening slightly weaker at Rp 16,750 (Rupiah Sixteen Thousand Seven Hundred Fifty only) on September 26, 2025. The yield on 10-year Government Securities (SBN) rose from 6.40 per cent (six point four zero per cent) to 6.43 per cent (six point four three per cent), while the 10 (ten) year US Treasury note yield increased to 4.170 per cent (four point one seven zero per cent).
3. Trends
3.1. RBI policy: hold seen at 5.50 per cent on October 1, 2025
Most economists expect the RBI to hold the repo rate at 5.50 per cent (five point five zero per cent) on October 1, 2025, while a cut of 25 basis points (twenty-five basis points) remains a minority risk.
3.2. Liquidity relief likely after October 4, 2025, Cash Reserve Ratio adjustment
Analysts judge the current system liquidity tightness as tax outflow driven and temporary, with improvement likely after the Cash Reserve Ratio (CRR) adjustment due on October 4, 2025, as government spending resumes.
3.3. Government weighs higher foreign investment limit in public sector banks
The Government of India is considering raising the foreign investment cap in public sector banks to ease capital raising and improve valuations, though timing and thresholds remain under deliberation.
3.4. Faster foreign portfolio investor onboarding under discussion at market regulators
SEBI and RBI are discussing faster Foreign Portfolio Investor (FPI) onboarding that could compress registration timelines to 30–60 (thirty to sixty) days through process simplification and data re-use.
3.5. Unified Payments Interface instalments under evaluation by payments body
The National Payments Corporation of India (NPCI) is evaluating Equated Monthly Instalment (EMI) functionality on the Unified Payments Interface (UPI) so bank and fintech apps can convert purchases into instalments at checkout, subject to pilots, risk controls, and issuer adoption.
4. Sector Overview
4.1. Core industries up 6.3 per cent in Aug, six sectors grow
The Index of Eight Core Industries rose 6.3 per cent (six point three per cent) year-on-year in August 2025, with Steel, Coal, Cement, Fertilisers, Electricity and Refinery Products posting gains; cumulative April–August growth printed 2.8 per cent (two point eight per cent).
4.2. Forex reserves at USD 702.57 Billion after weekly dip
Foreign-exchange reserves stood at USD 702.57 Billion (United States Dollars Seven Hundred Two Billion and Five Hundred Seventy Million only) as on September 19, 2025, down USD 396 million (United States Dollars Three Hundred Ninety-Six Million only) week-on-week, per the RBI weekly data.
4.3. RBI sold net USD 2.54 Billion in spot forex in July
RBI reported net sales of USD 2.54 billion (United States Dollars Two Billion and Five Hundred Forty Million only) in the spot foreign-exchange market in July 2025, indicating continued intervention to manage rupee volatility.
5. Business Updates
5.1. SMBC lifts Yes Bank stake to 24.22 per cent
Sumitomo Mitsui Banking Corporation (SMBC) acquired 132.39 crore shares via off-market trade on September 22, 2025, raising its holding in Yes Bank to 24.22 per cent (twenty-four point two two per cent) and becoming the largest shareholder; State Bank of India (SBI) now holds just over 10 per cent (ten per cent).
5.2. SBI MF announces specialised multi-asset fund NFO
SBI Mutual Fund unveiled a specialised multi-asset scheme with an "NFO" window from October 1–15, 2025, minimum investment INR 10,00,000 (Indian Rupees Ten Lakhs only), allocating mostly to hedged equities with debt and REITs (Real Estate Investment Trust) / InvITs (Infrastructure Investment Trust) components.
5.3. Zerodha Fund House launches two Nifty 50 passive schemes
Zerodha Mutual Fund introduced the Zerodha Nifty 50 ETF and the Zerodha Nifty 50 Index Fund, offering broad-market exposure aligned to the Nifty 50 Total Returns Index, as announced on September 26, 2025.
5.4. Kotak MF rolls out Nifty 200 Momentum 30 ETF
Kotak Mutual Fund launched an Exchange-Traded Fund (ETF) tracking the Nifty 200 Momentum 30 Index, providing low-cost momentum exposure within the Nifty 200 universe; the product opened for investors during this window.
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