AKP Banking & Finance Digest October 21, 2025

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1. Regulatory Updates

1.1. India

Reserve Bank of India (RBI)

1.1.1.RBI amends FEM (Borrowing and Lending) Regulations, 2018 and FEM (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015

The Reserve Bank of India ("RBI") announced two amendments: Authorised Dealer (AD) banks in India and their overseas branches may lend in Indian Rupees to persons resident in Bhutan, Nepal and Sri Lanka (including banks there) to facilitate cross-border trade under the Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations, 2025; and for exporter foreign-currency accounts maintained with a bank in an International Financial Services Centre ("IFSC") in India, the repatriation period for unutilised balances is extended to 3 (three) months via the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, with aligned changes to the Master Direction – Export of Goods and Services and Master Direction – Deposits and Accounts.

1.1.2.RBI cancels Certificate of Registration of 21 NBFCs

RBI, in exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934, has cancelled the Certificate of Registration ("CoR") of the following companies:

1.1.3.NBFCs and 1 HFC surrender their Certificate of Registration to RBI

The following 13 (thirteen) NBFCs and 1 (one) Housing Finance Company (HFC) have surrendered the CoR granted to them by the RBI. The RBI, in exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934 / Section 29A of National Housing Bank Act, 1987, has therefore cancelled their CoR:

1. i) Cancellation of CoR due to exit from Non-Banking Financial Institution (NBFI)

business

1. ii) Cancellation of CoR due to meeting the criteria prescribed for unregistered

Core Investment Company (CIC) that do not require registration

iii) Cancellation of CoR due to the company ceasing to be a legal entity due to amalgamation/ merger/dissolution/ voluntary strike-off, etc.

Securities and Exchange Board of India (SEBI)

1.1.4.SEBI proposes LODR exception for pre-2019 transfers and drops LOC

Securities Exchange Board of India ("SEBI") proposed amendments to the Listing Obligations and Disclosure Requirements (LODR) to allow, for a Board-specified sunset period, transfer of securities executed on stamped transfer deeds before April 1, 2019, with post-transfer credit only in dematerialised form after due diligence by Registrars to an Issue and Security Transfer Agents (RTAs) and listed entities (identity, signature checks, public notice, one-year lock-in, website disclosure), and invited public comments by November 7, 2025; SEBI also proposes to remove the Letter of Confirmation (LOC) step and enable direct credit to the investor's demat based on a Client Master List (CML) provided with the service request, eliminating Suspense Escrow Demat Account (SEDA) hassles and dual filings with the Depository Participant (DP), with the move informed by a special six-month window (July 7, 2025 – January 6, 2026) where 66 per cent (sixty-six per cent) of requests were fresh lodgements and by recurring investor difficulties such as deceased sellers and dissolved entities.

1.15. SEBI issues Master Circular for NCS with T+3 listings, EBP revamp, and GB-T for transition bonds

SEBI issued a consolidated Master Circular for issuance and listing of Non-Convertible Securities (NCS), securitised debt, security receipts and municipal debt, replacing prior instructions across topics including Electronic Book Provider ("EBP") workflows and sustainability-labelled debt. Public issues of debt securities must list within T+3 (three) working days for issues opening on or after November 1, 2025. Private placements get standardised timelines, including obtaining in-principal approval by T-2/T-3 (two/three) and listing within T+3 (three). SEBI also allows tranches under valid shelf documents at a face value of INR 10,000 (Indian Rupees Ten Thousand only) if at least one Merchant Banker conducts due diligence, and mandates trading lots equal to face value. The EBP regime is revised to improve efficacy and responsibilities. Environmental, Social & Governance ("ESG") rules add anti-greenwashing obligations and introduce a GB-T denotation with added disclosures for transition bonds and database tagging.

1.1.6.SEBI eases RPT disclosures for Audit Committees and shareholders

SEBI relaxed the "Minimum information" requirements for Related Party Transactions (RPTs), modifying the Master Circular so that listed entities may use a shorter Annexure-13A disclosure when a transaction, alone or aggregated in the financial year, does not exceed 1 per cent (one per cent) of annual consolidated turnover or INR 10,00,00,000 (Indian Rupees Ten Crore only), whichever is lower, while also clarifying that transactions up to INR 1,00,00,000 (Indian Rupees One Crore only) are exempt; the same thresholds apply to shareholder notices, and the changes take immediate effect.

1.1.7. SEBI extends Angel Funds' PPM allocation-methodology deadline

SEBI gave existing Angel Funds more time to disclose a defined methodology in their Private Placement Memoranda (PPMs) for allocating investments among approving angel investors, shifting the operative date from October 15, 2025, to January 31, 2026; any investment made after January 31, 2026, must follow the disclosed method, with all other provisions of the September 10, 2025 circular unchanged.

International Financial Services Centres Authority (IFSCA)

1.1.8.IFSCA issues International Financial Services Centres Authority (Listing) (Amendment) Regulations, 2025

The International Financial Services Centres Authority ("IFSCA") notified the International Financial Services Centres Authority (Listing) (Amendment) Regulations, 2025, effective on publication in the Official Gazette, to amend the International Financial Services Centres Authority (Listing) Regulations, 2024 by extending the limit from 135 (one hundred and thirty-five) to 180 (one hundred and eighty), and requiring listed entities to disclose first-half financial statements to recognised stock exchanges immediately after Board approval and in any case within 45 (forty-five) days after the end of the first half.

1.1.9. IFSCA issues public consultation on amendment to IFSCA Banking Handbook

The IFSCA has issued a public consultation to amend the Banking Handbook: Conduct of Business (COB) restrictions on the activity of providing credit for International Financial Services Centre Banking Units (IBUs), proposing Basel Committee on Banking Supervision (BCBS) aligned rules on advances to directors of the parent bank and their related parties, requiring a Board-approved related-party lending policy, conflict-of-interest safeguards, terms no more favourable than comparable loans, recusal of interested persons from approvals, adherence to home-regulator exposure thresholds, audits at intervals not exceeding 6 (six) months, and intimation to IFSCA's Department of Banking within 15 (fifteen) working days, while also permitting loans for companies' buy-back of securities where allowed by the law of incorporation, with comments due by November 7, 2025.

1.1.10.IFSCA issues consultation paper on Amendment to IFSCA (Fund Management) Regulations, 2025

IFSCA issued a consultation to amend the IFSCA (Fund Management) Regulations, 2025 for IFSC funds and Fund Management Entities ("FMEs"), proposing Ease of Doing Business, Safeguard and Clarification measures that: widen the definition of "associate" to beneficial ownership; allow repeated extensions to placement-memorandum validity; require pre–first close monies to be parked only in bank deposits; permit Venture Capital (VC) schemes to protect stakes via follow-on rounds even after the 10 (ten) year age limit while retaining the 80 per cent (eighty per cent) core-investment test; codify equal investor rights with permitted differential rights if fully disclosed; clarify that Net Asset Value (NAV) and portfolio disclosures commence from first close and allow annual NAV for certain Restricted Schemes ("RS") with investor approval. Comments are invited by November 6, 2025.

1.1.11.IFSCA sets PID appointment and review framework for MIIs

IFSCA issued a circular on the Governing Board of Market Infrastructure Institutions ("MIIs"), prescribing board skill mix, mandating at least one Public Interest Director ("PID") each with expertise in capital markets, finance and accountancy, legal and regulatory practice, and technology, and aligning governance with the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021; the Nomination and Remuneration Committee (NRC) must propose a slate per vacancy, the Governing Board must independently assess candidates, and the Authority will approve or nominate a PID, with reappointments filed at least 2 (two) months before term end; MIIs must adopt a documented performance-review policy with objective criteria and provide annual training for PIDs.

Miscellaneous

Ministry of Corporate Affairs (MCA)

1.1.12. MCA extends fee waiver for director KYC filings

The Ministry of Corporate Affairs ("MCA") issued a General Circular extending the deadline to file the e-form DIR-3-KYC (Director Know Your Customer) and web-form DIR-3-KYC-WEB without any filing fee up to October 31, 2025. The DIR-3-KYC form is a mandatory annual filing through which every director with an active Director Identification Number (DIN) must update their personal information and contact details with the MCA to ensure the accuracy of its director database. This extension is made in continuation of General Circular No. 04/2025 dated September 29, 2025. Registrars of Companies will continue to accept these filings without any fee within the extended window.

Unique Identification Authoroty of India (UIDAI)

1.1.13. UIDAI launches new schemes to enhance Aadhaar technology

Unique Identification Authority of India (UIDAI) launched the Scheme for Innovation and Technology Association with Aadhaar (SITAA) and opened applications until November 15, 2025, seeking Artificial Intelligence (AI) solutions for real-time or near real-time detection of deepfakes, mask attacks and spoofing in Aadhaar Face Authentication. The pilot invites Software Development Kit (SDK) builds for face, liveness and contactless fingerprint authentication, plus academic research on Presentation Attack Detection (PAD), with solutions required to be accurate, privacy-compliant, interoperable with Aadhaar application programming interfaces and deployable across devices and environments. Additionally, there was an announcement of the MeitY Startup Hub (MSH) and the National Association of Software and Service Companies (NASSCOM) as strategic partners to drive secure, scalable, indigenised Digital Public Infrastructure (DPI) for identity.

Monetary Penalties

1.1.14.RBI imposes penalties on six banks for regulatory non-compliance

RBI has imposed monetary penalties on the following institutions:

2. Key Asian Markets

2.1.Bangladesh

2.1.Bangladesh Bank sets 1 per cent provisioning for short-term agri and CMS loans

Bangladesh Bank ("BB") issued Banking Regulation and Policy Department ("BRPD") Circular Letter No. 22 cutting provisions to 1 per cent (one per cent) for all unclassified, Standard and Special Mention Account ("SMA"), short-term agricultural credits and Cottage, Micro and Small (CMS) enterprise credits under the Cottage, Micro, Small and Medium Enterprises (CMSME) sector until December 31, 2026; this departs from the general 1 per cent (one per cent) for Standard and 5 per cent (five per cent) for SMA set by BRPD Circular No. 15 of November 27, 2024 and BRPD Circular No. 05 of June 25, 2025, with all other instructions unchanged.

2.2. Bangladesh Bank adds 'Commercial Invoice' reporting in OIMS

BB issued Foreign Exchange Operation Department (FEOD) Circular No. 01 introducing a new "Commercial Invoice" reporting tab in the Online Import Monitoring System ("OIMS"), which is integrated with National Board of Revenue (NBR) online systems via an Application Programming Interface (API); Authorised Dealers (ADs) must report information from commercial invoices and other relevant documents following the OIMS manual, effective November 1, 2025.

2.2. Indonesia

2.2.1.BI reports Indonesia's external debt growth slowing

Bank Indonesia ("BI") reported that in August 2025, Indonesia's external debt ("ULN") stood at USD 431.9 billion (United States Dollars Four Hundred Thirty-One Billion and Nine Hundred Million only). This marked a 2.0 per cent (two point zero per cent) year-on-year ("YoY") increase, compared to 4.2 per cent (four point two per cent) in July. Public sector ULN growth slowed, while private sector ULN contracted. Government ULN reached USD 213.9 billion (United States Dollars Two Hundred Thirteen Billion and Nine Hundred Million only), up 6.7 per cent (six point seven per cent) YoY. Around 99.9 per cent (ninety-nine point nine per cent) of this debt was long term. Government borrowing was mainly allocated to Health Services and Social Activities (23.4 per cent / twenty-three point four per cent), Education Services (17.2 per cent / seventeen point two per cent), Government Administration, Defence and Mandatory Social Security (15.7 per cent / fifteen point seven per cent), Construction (12.3 per cent / twelve point three per cent), Transportation and Warehousing (9.0 per cent / nine point zero per cent), and Financial Services and Insurance (8.0 per cent / eight point zero per cent). Private ULN fell to USD 194.2 billion (United States Dollars One Hundred Ninety-Four Billion and Two Hundred Million only), contracting 1.1 per cent (one point one per cent) YoY.

2.2.2. BI SKDU shows steady business activity; capacity use rises

BI reported via its Survey of Business Activity (Survei Kegiatan Dunia Usaha, SKDU) that activity stayed positive, with the Weighted Net Balance (Saldo Bersih Tertimbang, SBT) at 11.55 per cent (eleven point five five per cent), capacity utilisation at 73.84 per cent (seventy-three point eight four per cent), and the PMI-BI at 51.66 per cent (fifty-one point six six per cent); momentum was supported by Mining and Quarrying and Manufacturing, while corporate liquidity and profitability remained sound with easier credit access.

3. Trends

3.1.OMO watch as RBI defends rupee and liquidity tightens

Following heavy foreign-exchange intervention on October 16, 2025, to stabilise the rupee, market participants expect the RBI to offset liquidity drainage with durable tools such as Open Market Operations (OMOs) or variable-rate liquidity operations; this mirrors expectations from past playbooks, but no operation has been announced.

3.2.Insurance FDI push likely, composite licence may slip

Reports signal the Government of India will seek Winter Session passage of an Insurance Amendment Bill to permit 100 per cent (one hundred per cent) Foreign Direct Investment (FDI) in insurers, while composite licensing could be deferred; Finance Minister's earlier remarks indicate intent to table the Bill.

4. Sector Overview

4.1.CPI inflation drops to multi-year low

India's Consumer Price Index (CPI) inflation fell to 1.54 per cent (one point five four per cent) year-on-year in September 2025, with rural at 1.07 per cent (one point zero seven per cent) and urban at 2.04 per cent (two point zero four per cent); food inflation (CFPI) turned negative at −2.28 per cent (minus two point two eight per cent), the lowest headline pace since June 2017, per the Ministry of Statistics and Programme Implementation (MoSPI) National Statistical Office (NSO).

4.2.Trade gap widens as imports surge in September

September 2025 merchandise exports were USD 36.38 billion (United States Dollars Thirty-Six Billion and Three Hundred Eighty Million only) while imports were USD 68.53 billion (United States Dollars Sixty-Eight Billion and Five Hundred Thirty Million only), implying a goods trade deficit of USD 32.15 billion (United States Dollars Thirty-Two Billion and One Hundred Fifty Million only); on a combined basis, estimated exports of goods and services were USD 67.20 billion (United States Dollars Sixty-Seven Billion and Two Hundred Million only) and imports USD 83.82 billion (United States Dollars Eighty-Three Billion and Eight Hundred Twenty Million only) in September 2025.

5. Business Updates

5.1.Emirates NBD to acquire 60 per cent of RBL Bank

Emirates NBD agreed to acquire a 60 per cent (sixty per cent) stake in RBL Bank via a preferential issue for USD 3,000,000,000 (United States Dollars Three Billion only), alongside an open offer at INR 280 (Indian Rupees Two Hundred Eighty only) per share; the deal, also valued at INR 26,853 crore (Indian Rupees Twenty-Six Thousand Eight Hundred Fifty-Three Crore only), is subject to regulatory approvals by the RBI.

5.2. Axis Bank profit declines in Q2 while margins steady

Axis Bank posted second-quarter (Q2) FY 2025-26 standalone net profit of INR 5,090 crore (Indian Rupees Five Thousand Ninety Crore only), a 26.42 per cent (twenty-six point four two per cent) year-on-year decline, with Net Interest Income (NII) up 2 per cent (two per cent) to INR 13,744 crore (Indian Rupees Thirteen Thousand Seven Hundred Forty-Four Crore only) and Net Interest Margin (NIM) at 3.73 per cent (three point seven three per cent).

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