India: FinTech

The Reserve Bank of India's latest amendment on digital fraud fundamentally reshapes liability in India's financial ecosystem by mandating that banks immediately credit fraud victims before determining fault, effectively ending the long-standing practice of institutional finger-pointing. This decisive regulatory intervention forces banks to absorb third-party breach losses upfront and recover separately from responsible intermediaries, prioritizing consumer protection over institutional convenience.

The RBI presented a set of proposals in early February 2026 which when taken together created major changes to the regulatory framework governing non-bank finance companies (NBFCs). The headline change is a proposed exemption from registration and scale based regulation for a defined class of low risk, "Type 1" NBFCs, but this relief is paired with sharper conduct standards on mis selling and a harmonised recovery agent framework across all lenders.

On the capital markets front, the Securities and Exchange Board of India ("SEBI") intensified its regulatory agenda through a series of governance, compliance, and investor protection measures.