AKP Banking & Finance Digest December 22, 2025

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1. Regulatory Updates

1.1.  India

Reserve Bank of India (RBI)

1.1.1.    RBI assigns lead bank responsibility for Gujarat’s newly created Vav-Tharad district

Reserve Bank of India (“RBI”) informed lead banks that the Government of Gujarat has notified the formation of a new district, Vav-Thara, and that Bank of Baroda will be the designated lead bank for this district, with district working code 02U. RBI also clarified that there is no change in the lead banks of other districts in Gujarat.

Securities and Exchange Board of India (SEBI)

1.1.2.     SEBI Board clears key reforms for brokers, mutual funds, IPO disclosures and listed-entity processes

At its 212th (two hundred and twelfth) meeting in Mumbai on December 17, 2025, the Securities and Exchange Board of India (“SEBI”) approved a set of major regulatory changes, including but not limited to (i) replacing the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 with the Securities and Exchange Board of India (Stock Brokers) Regulations, 2025 to simplify and streamline the framework, (ii) overhauling the SEBI (Mutual Funds) Regulations, 1996 into the SEBI (Mutual Funds) Regulations, 2026 with consolidation, clearer governance roles and changes to expense and brokerage-related provisions, and (iii) amending the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 to ease certain lock-in compliance issues for pledged non-promoter holdings and introduce a standardised draft abridged prospectus at the draft red herring prospectus stage to improve retail comprehension. SEBI also approved process changes under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to remove the Letter of Confirmation route for specified investor service requests (enabling direct demat credit and reducing timelines from about 150 (one hundred and fifty) days to 30 (thirty) days) and to facilitate transfer of certain legacy physical securities within a limited window, subject to safeguards.

1.1.3.     SEBI’s issues SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 2025

SEBI notified the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 2025, repealing and replacing the 1993 framework while preserving past actions taken under the earlier regulations. The new regime strengthens eligibility and ongoing compliance conditions for registrars to an issue and share transfer agents (“RTAs”), including a minimum net worth of INR 50,00,000 (Indian Rupees Fifty Lakhs only), with existing RTAs required to meet this threshold within 18 (eighteen) months from commencement. It also requires RTAs providing services to unlisted companies to segregate those activities into a separate business unit within 18 (eighteen) months from the date of notification and clarifies that such unlisted-company services are generally outside SEBI’s regulatory jurisdiction (subject to specified regulated servicing). SEBI has also reinforced operational and investor-protection expectations, including redressal of investor grievances within 21 (twenty-one) calendar days, prior SEBI approval for change in control, and the need for a legally binding agreement with clients. The regulations further prescribe governance and control measures such as record preservation for at least 8 (eight) years and enhanced compliance oversight.

1.1.4.     SEBI mandates half-yearly disclosures for listed securitised debt instruments

SEBI has mandated that the trustee of each special purpose distinct entity (SPDE) submit prescribed disclosures for Securitised Debt Instruments (“SDIs”) to SEBI and the stock exchange where the SDIs are listed, within 30 (thirty) days of the end of March or September. SEBI has specified two disclosure formats, Annexure I for SDIs backed by loans, listed debt securities, or credit facility exposures, and Annexure II for SDIs backed by other exposures covering, among other items, weighted average maturity, Minimum Retention Requirement (MRR), delinquency and security-cover metrics, rating and default history, prepayment and recovery performance, utilisation of credit enhancement and liquidity facilities, post-securitisation amendments, and Minimum Holding Period (MHP) compliance, with Annexure III providing worked illustrations for key calculations.

1.1.5.     SEBI amends LODR to standardise “Registrar to an Issue and Share Transfer Agent” terminology

SEBI has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2025, which primarily updates Regulation 7 and multiple schedules (including Schedule I, Schedule II, Schedule III, Schedule VI and Schedule VII) to replace references to “share transfer agent” with “registrar to an issue and share transfer agent”, and to align related phrasing across disclosure and compliance formats.

1.1.6.     Centre introduces Securities Markets Code Bill

A Bill introduced in Lok Sabha proposes the Securities Markets Code, 2025 (“SMC”) to repeal and consolidate 3 (three) principal securities laws, Securities Contracts (Regulation) Act, 1956, Securities and Exchange Board of India Act, 1992 and Depositories Act, 1996, into a single, principle-based framework intended to strengthen investor protection and capital mobilisation while reducing compliance burden and improving regulatory governance. The SMC designates SEBI as the “Board” and adds investor-redress and innovation features such as an Ombudsperson-based grievance platform and a regulatory sandbox for new financial products, contracts and services. It also enables inter-regulatory coordination for “other regulated instruments” and proposes consequential amendments to 4 (four) laws, including the Prevention of Money-laundering Act, 2002 and Mediation Act, 2023, as set out in the Schedules.

1.1.7.     SEBI permits zero-coupon debt securities for reduced INR 10,000 denomination

SEBI modified the conditions for issuing privately placed listed debt securities and non-convertible redeemable preference shares at a reduced face value of INR 10,000 (Indian Rupees Ten Thousand only) under the Non-Convertible Securities (“NCS”) Master Circular. The earlier framework (introduced via SEBI’s circular dated July 3, 2024, and reflected in the NCS Master Circular dated October 15, 2025) required such securities to be interest or dividend bearing, which effectively excluded zero-coupon debt securities. SEBI has now amended clause 1.3 of Chapter V to expressly allow a zero-coupon debt security with a fixed maturity (without any structured obligations) to be issued at the reduced denomination, alongside the existing interest or dividend bearing option. The revised provisions apply to private placement issues of debt securities proposed to be listed from the date of the circular, and stock exchanges, clearing corporations and depositories have been directed to operationalise the changes through systems and, where necessary, by-law or rule amendments.

Insurance Regulatory and Development Authority of India (IRDAI)

1.1.8.     Centre passes Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025

The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, passed in Lok Sabha, proposes amendments to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999, including raising the foreign direct investment limit in Indian insurance companies to 100 per cent (one hundred per cent) from 74 per cent (seventy-four per cent), lowering the net-owned fund requirement for foreign reinsurers to INR 1,000,00,00,000 (Indian Rupees One Thousand Crore only) from INR 5,000,00,00,000 (Indian Rupees Five Thousand Crore only), and increasing the Insurance Regulatory and Development Authority of India approval threshold for registration of share transfers to 5 per cent (five per cent) of paid-up share capital from 1 per cent (one per cent). The Bill also proposes to broaden “insurance intermediaries” to include managing general agents and insurance repositories, extend certain Central Government exemption/modification powers for Special Economic Zones to International Financial Services Centres in Special Economic Zones and to intermediaries, and add powers for the Insurance Regulatory and Development Authority of India (“IRDAI”) to approve certain schemes of arrangement, supersede an insurer’s board where an administrator is appointed, regulate remuneration and commissions for agents/intermediaries, and inspect/investigate intermediaries, alongside creating a Policyholders’ Education and Protection Fund to be administered by the IRDAI.

1.1.9.     IRDAI issues Consultation on Insurers’ Investment in Infrastructure Special Purpose Vehicle

IRDAI has issued a consultation proposing a new provision to permit insurers to invest, as part of Approved Investments, up to 20 (twenty) per cent of the debt issued by a public limited Special Purpose Vehicle (“SPV”) engaged in the infrastructure sector where the project has commenced commercial operation and cash flows have stabilised, subject to an overall cap linked to existing limits. The proposal would allow such investment without requiring a parent company guarantee or reliance on the parent company’s net worth and rating, on the rationale that post-operations cash flows are more predictable and de-risk funding for the SPV. The draft conditions include that the issue proceeds must refinance existing SPV debt, the underlying debt/loan must be standard in the lender’s books, and the issued debt must carry a minimum credit rating of AA. IRDAI has invited stakeholder comments within 21 (twenty-one) days from December 18, 2025, including on whether the proposal adequately supports viable SPV funding structures and what disclosures should be mandated for risk mitigation.

Miscellaneous

Ministry of Corporate Affairs (MCA)

1.1.10.  Centre introduces the Companies (Amendment) Bill, 2025

The Companies (Amendment) Bill, 2025, introduced in Rajya Sabha on December 5, 2025, proposes to amend Section 135 of the Companies Act, 2013 to lower the thresholds for mandatory Corporate Social Responsibility (CSR) committee constitution to companies with net worth of INR 100,00,00,000 (Indian Rupees One Hundred Crore only) or more, turnover of INR 500,00,00,000 (Indian Rupees Five Hundred Crore only) or more, or net profit of INR 3,00,00,000 (Indian Rupees Three Crore only) or more in the immediately preceding financial year (as against the existing thresholds of INR 500,00,00,000 (Indian Rupees Five Hundred Crore only), INR 1,000,00,00,000 (Indian Rupees One Thousand Crore only), and INR 5,00,00,000 (Indian Rupees Five Crore only), respectively). It also proposes that the CSR Committee of the Board include, in addition to at least one independent director (where applicable), a director with extensive experience in planning and implementing CSR projects, while retaining the position that companies not required to appoint an independent director under should have two (two) or more directors on the CSR Committee. The Bill would come into force on a date to be notified by the Central Government in the Official Gazette, and the stated policy intent is to expand CSR applicability to more medium-sized companies to increase private-sector social-sector funding.

Ministry of Electronics and Information Technology (MeitY)

1.1.11.  Centre introduces Artificial Intelligence (Ethics and Accountability) Bill, 2025

The Artificial Intelligence (Ethics and Accountability) Bill, 2025, introduced in Lok Sabha, proposes a statutory framework to govern the use of Artificial Intelligence (“AI”) in decision-making, surveillance, and algorithmic systems, with stated objectives of fairness, transparency, and accountability. It proposes an Ethics Committee for AI, to be constituted by the Central Government, to issue ethical guidelines, monitor compliance, review misuse and bias, and support awareness and capacity-building, and it would require prior approval of the Committee for the use of AI in surveillance, while subjecting “critical decision-making” systems (including law enforcement, financial credit, and employment) to stringent ethical reviews. Developers would be required to make specified disclosures on purpose, limitations, data sources and methodologies, and reasons for impactful decisions, conduct audits to identify and mitigate algorithmic bias, and maintain compliance records, with a complaint mechanism for affected individuals or groups. Non-compliance may attract a fine up to INR 5,00,00,000 (Indian Rupees Five Crore only) and suspension or revocation of licences, with potential criminal liability for repeat violations, and the Bill also contemplates annual reporting to Parliament and rulemaking by the Central Government.

1.1.12.  MeitY issues corrigendum to DPDP Rules, 2025

MeitY issued a corrigendum to the Digital Personal Data Protection Rules, 2025 (DPDP Rules). The corrigendum clarifies and fixes minor drafting errors across the DPDP Rules, including but not limited to pluralising “Department” to “Departments” in the committee composition, and correcting “everybody corporate” to “every body corporate” in Consent Manager rules, as well as the Companies Act, 2013 (18 of 2013) citation and certain punctuation/cross-references in the Fourth Schedule definitions.

National Payments Corporation of India (NPCI)

1.1.13.  NPCI prescribes an adjustment-based settlement process for UPI duplicate TRAN ID cases

National Payments Corporation of India (“NPCI”) issued an addendum to its Unified Payments Interface (UPI) operating circulars (OC-193 and OC-193A) on Transaction ID (“TRAN ID”) compliance, to operationalise how residual duplicate TRAN-ID transactions will be settled and reconciled where such duplicates continue to be generated despite prior directions. Earlier guidance under OC-193 required TRAN IDs to be 35 (thirty-five) alphanumeric characters and mandated that no duplicate TRAN IDs be generated, alongside a liability shift to the defaulting payment service provider or bank for such transactions with effect from October 1, 2024. The new addendum states that NPCI will, on a best-effort basis, settle duplicate TRAN-ID transactions through an adjustment entry, with the impact reflected under a “NET ADJUSTED AMOUNT” line item in the settlement file, and the duplicate TRAN-ID details made available in the adjustment report (Adjtype: “Duplicate TRAN ID”; Dispute Flag: “DTI”; Reason Code: 601).

Telecom Regulatory Authority of India (TRAI)

1.1.14.  TRAI issues Direction mandating adoption of 1600-series by entities regulated by IRDAI

On December 16, 2025, the Telecom Regulatory Authority of India (“TRAI”) issued a Direction requiring entities regulated by the Insurance Regulatory and Development Authority of India (“IRDAI”) to shift service and transactional calls to 1600 series numbers by February 15, 2026. The stated objective is to enhance consumer trust, curb spam and prevent fraudulent activity through voice calls. The 1600 numbering series has been assigned by the Department of Telecommunications for use by the banking, financial services and insurance (BFSI) sector and government organisations to help consumers distinguish legitimate service and transactional calls from other commercial communications. TRAI has also issued a structured implementation schedule to move entities still using standard ten-digit numbers onto the 1,600 series to reduce impersonation-based fraud risks.

Monetary Penalties

1.1.15.  RBI imposes penalties on four 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.	The Kovilpatti Co-operative Urban Bank Limited, Tamil Nadu	(Indian Rupees One lakh only)	Non-compliance with certain directions issued by RBI on 'Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs)'. 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 Tamilnadu Circle Postal Co-operative Bank Limited, Tamil Nadu	(Indian Rupees Fifty thousand only)	Non-compliance with certain directions issued by RBI on 'Exposure Norms and Statutory / Other Restrictions – UCBs'. 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 Arakonam Co-operative Urban Bank Limited, Tamil Nadu	(Indian Rupees Two Lakh Fifty Thousand only)	Contravention of provisions of Section 17 read with Section 56 of the Banking Regulation Act, 1949 and non-compliance with certain directions issued by RBI on 'Exposure Norms and Statutory / Other Restrictions – UCBs', 'Management of Advances – UCBs' and '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.	Kotak Mahindra Bank Limited	(Indian Rupees Sixty One Lakh Ninety Five Thousand only)	Non-compliance with certain directions issued by RBI on ‘Access to Banking Services - Basic Savings Bank Deposit Account’ and ‘Scope of activities to be undertaken of Business Correspondents (BCs)’ and contravention of provisions of Credit lnformation Companies Rules, 2006 (ClC Rules). This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47A(1)(c) read with section 46(4)(i) of the BR Act and section 25(1)(iii) read with section 23(4) of the Credit Information Companies (Regulation) Act, 2005.

2.             Key Asian Markets - Philippines and Indonesia

2.1.         Philippines

2.2.1.     Philippines’ cash remittances reach USD 3.17 billion in October

Bangko Sentral ng Pilipinas (“BSP”) reported that cash remittances from overseas Filipinos totalled USD 3.17 billion (United States Dollars Three Billion One Hundred and Seventy Million only) in October 2025 and USD 29.20 billion (United States Dollars Twenty-Nine Billion Two Hundred Million only) for January–October 2025, i.e., 10 (ten) months. It also reported that personal remittances (including cash sent through banks and informal channels, and remittances in kind) amounted to USD 3.52 billion (United States Dollars Three Billion Five Hundred and Twenty Million only) in October 2025 and USD 32.49 billion (United States Dollars Thirty-Two Billion Four Hundred and Ninety Million only) for January–October 2025. The United States remained the top recorded source of remittances during January–October 2025, followed by Singapore and Saudi Arabia, while noting that routing practices through correspondent banks and money couriers can cause remittances to be attributed to the most immediate source (often the United States) rather than the actual originating country.

2.2.2.     BSP survey finds Philippine business confidence improves in Q4, but outlook softens into 2026

BSP published results of its Business Expectation Survey (“BES”) showing the overall business confidence index rose to 29.7 per cent (twenty-nine point seven per cent) in the fourth quarter of 2025 from 23.2 per cent (twenty-three point two per cent) in the previous quarter, supported by expected holiday-related consumer spending, improved productivity and efficiency, new product and service rollouts, and a favourable inflation environment. Confidence remained positive but moderated for the next quarter and the next 12 (twelve) months, with the quarter-ahead index at 23.7 per cent (twenty-three point seven per cent) (down from 49.5 per cent (forty-nine point five per cent)) and the year-ahead index at 40.4 per cent (forty point four per cent) (down from 48.1 per cent (forty-eight point one per cent)), with respondents citing recent natural calamities and corruption allegations as weighing on sentiment. Firms also continued to expect inflation over the next 12 (twelve) months to remain within the National Government’s target range for the fifth consecutive quarter, indicating well-anchored expectations relevant to investment and hiring decisions, and the BES fieldwork covered October 7, 2025, to November 13, 2025, with 1,521 (one thousand five hundred and twenty-one) firms surveyed across 17 (seventeen) regions.

2.3.         Indonesia

2.3.1.     Indonesia’s external debt dips in October 2025, with long-term maturities still dominant

Bank Indonesia (“BI”) reported that Indonesia’s external debt fell to USD 423.9 billion (United States Dollars Four Hundred and Twenty-Three Billion Nine Hundred Million only) in October 2025, down from USD 425.6 billion (United States Dollars Four Hundred and Twenty-Five Billion Six Hundred Million only) in September 2025, while recording 0.3 per cent (zero and three tenths per cent) year-on-year growth. Government external debt was USD 210.5 billion (United States Dollars Two Hundred and Ten Billion Five Hundred Million only), with 4.7 per cent (four and seven tenths per cent) year-on-year growth.

2.3.2.     BI holds policy rate at 4.75 percentage

BI Board of Governors decided to hold the BI-Rate at 4.75 per cent (four and seventy-five hundredths per cent), while maintaining the Deposit Facility (DF) rate at 3.75 per cent (three and seventy-five hundredths per cent) and the Lending Facility (LF) rate at 5.50 per cent (five and fifty hundredths per cent), citing the need to preserve Rupiah exchange-rate stability amid high global uncertainty and to strengthen transmission of accommodative monetary and macroprudential policy to support growth.

3.             Trends

3.1.         Government tests investor appetite for GIC minority stake sale

Government of India conducted investor road shows in London to gauge interest in a proposed minority stake sale in General Insurance Corporation of India. The sale is being explored as part of a plan to dilute up to 10 per cent (ten per cent) over time to meet the minimum public shareholding requirement of 25 per cent (twenty-five per cent) for listed companies. The Government of India was reported to hold about 82.4 per cent (eighty-two point four per cent) in General Insurance Corporation of India, and the broader divestment plan for the current financial year includes a target of INR 470,000,000,000 (Indian Rupees Four Hundred Seventy Billion only) through stake sales and asset monetisation.

3.2.         Mizuho’s planned majority buyout of Avendus signals further consolidation in Indian investment banking

Mizuho Securities announced a plan to acquire a majority stake in Avendus from KKR for up to JPY 81,000,000,000 (Japanese Yen Eighty-One Billion only). Mizuho Securities said it expects to buy between 61.6 per cent (sixty-one point six per cent) and 78.3 per cent (seventy-eight point three per cent) of Avendus, which would make Avendus a consolidated subsidiary. The transaction reflects a continuing push by large overseas financial groups to deepen their presence in India through buyouts of established local platforms, subject to completion of the deal on agreed terms.

4.             Sector Overview

4.1.         RBI minutes signal further easing bias amid low inflation

The minutes of the RBI rate-setting meeting indicated that subdued inflation and an expected moderation in growth could create space for additional policy-rate cuts. The Monetary Policy Committee cut the repo rate by 25 (twenty-five) basis points to 5.25 per cent (five point two five per cent) earlier in December 2025, taking cumulative cuts in 2025 to 125 (one hundred twenty-five) basis points. The RBI also raised its gross domestic product forecast for the current fiscal year to 7.3 per cent (seven point three per cent) and lowered its inflation projection to 2 per cent (two per cent). The next policy meeting is scheduled for February 4, 2026, to February 6, 2026, and the RBI indicated the decision will be data dependent.

4.2.         India’s forex reserves rise, supporting external stability for banks

RBI data showed India’s foreign exchange reserves increased by USD 1.68 billion (United States Dollar One Billion Six Hundred Eighty Million only) to USD 688.94 billion (United States Dollar Six Hundred Eighty-Eight Billion Nine Hundred Forty Million only) for the week ended December 12, 2025. Foreign currency assets rose to USD 557.79 billion (United States Dollar Five Hundred Fifty-Seven Billion Seven Hundred Ninety Million only), while gold reserves increased to USD 107.74 billion (United States Dollar One Hundred Seven Billion Seven Hundred Forty Million only).

5.             Business Updates

5.1.       ICICI Prudential AMC debuts at premium, becomes India’s most valuable listed asset manager

Shares of ICICI Prudential Asset Management Company, an asset management company (AMC) jointly owned by ICICI Bank and Prudential plc, rose 23 per cent (twenty-three per cent) on their trading debut, implying a market value of USD 14,400,000,000 (United States Dollar Fourteen Billion Four Hundred Million only). The initial public offering was sized at USD 1,200,000,000 (United States Dollar One Billion Two Hundred Million only) and drew bids of about USD 33,000,000,000 (United States Dollar Thirty-Three Billion only). The debut made it India’s most valuable listed asset manager, reflecting continued investor appetite for domestic savings-led capital flows.

5.2.         RBI clears HDFC group entities to buy up to 9.5 per cent of IndusInd Bank

RBI approved various HDFC Bank group entities (including HDFC Mutual Fund, HDFC Life Insurance Company Limited, and HDFC Pension Fund Management Limited) to acquire an aggregate holding of up to 9.5 per cent (nine and a half per cent) of IndusInd Bank’s paid-up share capital or voting rights. HDFC Bank said the approval was issued via a letter dated December 15, 2025, and remains valid for 1 (one) year. The approval provides regulatory headroom for the group’s investment entities to build or maintain exposure to IndusInd Bank within the prescribed limit.

Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details, you may contact:

Mr Anuroop Omkar

Partner, AK & Partners

info@akandpartners.in