AKP Banking & Finance Digest December 29, 2025

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1. Regulatory Updates

1.1.  India

Reserve Bank of India (RBI)

1.1.1.    RBI announces open market operation purchases and USD/INR swap to inject liquidity

Reserve Bank of India (“RBI”) announced liquidity injection measures after reviewing current liquidity and financial conditions. The RBI will conduct open market operation (OMO) purchase auctions of Government of India securities for an aggregate amount of INR 2,00,000 crore (Indian Rupees Two Lakh Crore only) in 4 (four) tranches of INR 50,000 crore (Indian Rupees Fifty Thousand Crore only) each on December 29, 2025, January 5, 2026, January 12, 2026, and January 22, 2026. It will also conduct a USD/INR buy/sell swap auction of USD 10 Billion (United States Dollar Ten Billion only) for a tenor of 3 (three) years on January 13, 2026, with detailed instructions for each operation to be issued separately.

1.1.2.    RBI postpones Phase 2 rollout for continuous clearing in Cheque Truncation System 

RBI has postponed Phase 2 (two) of the “Continuous Clearing and Settlement on Realisation” initiative in the Cheque Truncation System (“CTS”), until further notice, to give banks additional time to streamline operations, partially modifying its earlier circular dated August 13, 2025, under which Phase 1 (one) was implemented on October 4, 2025. RBI also revised CTS session timings by changing the presentation session to 09:00 AM to 03:00 PM and the confirmation session to 09:00 AM to 07:00 PM.

Securities and Exchange Board of India (SEBI)

1.1.3.     SEBI simplifies duplicate security certificate process and raises threshold for streamlined documentation

Securities and Exchange Board of India (“SEBI”) issued a circular on December 24, 2025, to further simplify and standardise documentation for issuance of duplicate security certificates, revising its earlier framework under the circular dated May 25, 2022, read with the master circular for Registrars to an Issue and Share Transfer Agents (RTAs) dated June 23, 2025. SEBI increased the threshold for simplified documentation from INR 5,00,000 (Indian Rupees Five Lakhs only) to INR 10,00,000 (Indian Rupees Ten Lakhs only) and prescribed a standardised Affidavit-cum-Indemnity bond format, while also removing notarisation for cases involving securities up to INR 10,000 (Indian The changes apply with immediate effect and also cover ongoing requests (without requiring re-submission of documents already filed).

1.1.4.     SEBI further expands Basic Services Demat Account facility by excluding Zero Coupon Zero Principal bonds and delisted holdings from eligibility threshold

SEBI, by circular dated December 24, 2025, introduced additional “ease of investments” and “ease of doing business” measures for the Facility for Basic Services Demat Account (“BSDA”). SEBI decided that Zero Coupon Zero Principal (“ZCZP”) bonds and delisted securities will be excluded for reckoning the BSDA threshold, and clarified that the value of suspended securities, delisted securities and ZCZP bonds will not be considered while determining BSDA eligibility, while illiquid securities will be valued at the last closing price. Depository Participants (DPs) must reassess BSDA eligibility every quarter and convert eligible demat accounts into BSDA unless the Beneficial Owner provides active consent through an authenticated and verifiable channel (as specified by Depositories) to open or continue a regular demat account. These changes will take effect from March 31, 2026, and Depositories have been directed to amend relevant byelaws and implement system changes within prescribed timelines.

International Financial Services Centres Authority (IFSCA)

1.1.5.     IFSCA releases stakeholder feedback on proposed CMI Regulations amendments

The International Financial Services Centres Authority (“IFSCA”) published public comments received on proposed amendments to the IFSCA (Capital Market Intermediaries) Regulations, 2025, covering (among other points) expanded qualification routes and reduced experience thresholds for Principal Officers and Compliance Officers, enhanced governance expectations where common Principal Officers are permitted across multiple registrations, and requests for clearer rules on “liquid assets” for net worth computation (including treatment of margins, valuation and haircuts, and reporting frequency). Stakeholders also commented on the proposed minimum custodian net worth of USD 1 million (United States Dollar One Million only), including how parent-level earmarking would work for branches, and supported an “umbrella registration” framework to allow a single application for multiple regulated activities, subject to conflict-of-interest safeguards and activity-specific checks. IFSCA noted that, after the public consultation, the draft IFSCA (CMI) (Amendment) Regulations were suitably modified and placed before the Authority at its meeting held on December 22, 2025.

1.1.6.     IFSCA Authority approves key regulatory relaxations for FMEs and CMIs and clears draft GIC framework

IFSCA approved amendments to the IFSCA (Fund Management) Regulations, 2025 to ease operational challenges for Fund Management Entities (“FMEs”), including relaxing Key Managerial Personnel (KMPs) eligibility through a certification-based alternative and broader recognition of relevant work experience, permitting multiple 6 (six) month extensions for Private Placement Memoranda (“PPMs”) of Venture Capital Schemes and Restricted Schemes, providing a one-time 3 (three) month extension window for certain expired PPMs, and granting eligible FMEs a 24 (twenty-four) month migration window to appoint an IFSCA-registered custodian.  The IFSCA also approved the draft IFSC Authority (Global-In-House Centre) Regulations, 2025 to provide an updated framework for Global In-House Centre (GIC) units in Gujarat International Finance Tec-City International Financial Services Centre (GIFT-IFSC), including allowing services to group entities in India up to 10 per cent (ten per cent) of annual revenue and easing the earlier 20 per cent (twenty per cent) cap on employee transfers. Further, the IFSCA approved deletion of the minimum office space requirement of 60 (sixty) sq. ft. per employee for Book-keeping, Accounting, Taxation and Financial Crime Compliance Services (BATF) service providers, and amendments to the IFSCA (Capital Market Intermediaries) (Amendment) Regulations, 2025 covering qualifications and experience thresholds, liquid net worth computation, and custodian net worth of USD 1 million (United States Dollar One Million only) with existing custodians given time until June 30, 2026 to comply.  It also approved an amendment to the IFSCA (Registration of Business) Regulations, 2021 expanding the definition of “Lloyd’s Service Company”, with notifications to be issued separately.

Miscellaneous

Unique Identification Authority of India (UIDAI)

1.1.7.     UIDAI revises SOP for Aadhaar Date of Birth updates and fraud-linked reactivation

Unique Identification Authority of India (“UIDAI”) issued a revised Standard Operating Procedure (“SOP”) on December 24, 2025, superseding earlier instructions (including the SOP dated July 19, 2021) on updating Date of Birth (“DoB”) in the Aadhaar database. The SOP reiterates that an Aadhaar Number Holder (ANH) should ordinarily have no need to change DoB, treats a Birth Certificate as the primary legal proof, and provides that once a Birth Certificate has been submitted as Proof of Date of Birth (“PDB”), further DoB updates should not be considered under normal circumstances. It also sets out rule-based handling under the Aadhaar (Enrolment and Update) Regulations, 2016, including stricter conditions where DoB is already “verified”, and age-linked requirements where for 0–5 (zero to five) years and 5–18 (five to eighteen) years, only a Birth Certificate is permitted for DoB updates. UIDAI states that cases involving false or fraudulently obtained documents may lead to deactivation of Aadhaar, with a “last opportunity” approach where reactivation may be considered only with a genuine online-verifiable PDB document and prescribed affidavits, and an FIR may also be lodged depending on circumstances.

2.            Key Asian Markets - Philippines and Vietnam

2.1.         Philippines

2.1.1.     BSP flags shift to BOP deficits amid persistent external headwinds

On December 25, 2025, Bangko Sentral ng Pilipinas (“BSP”) projected that the balance of payments (BOP) will move from a modest surplus in 2024 to deficits in 2025 and 2026, mainly due to a sustained trade-in-goods gap and weaker services receipts, alongside softer foreign direct investment inflows and external borrowing amid global policy uncertainty. Goods trade is expected to remain subdued due to weaker global demand, easing commodity prices and slower domestic growth, despite some temporary export support from frontloading ahead of anticipated United States tariffs. Services export growth is also expected to moderate as cost pressures rise in business process outsourcing and tourism, while overseas Filipino remittances are projected to remain resilient, with the proposed United States tax on remittances expected to have minimal impact.  BSP further noted that reforms and new initiatives could support investment over the medium term, gross international reserves are expected to remain adequate, and early warning indicators suggest the Philippines remains resilient to external shocks, with BSP continuing to monitor external sector risks.

2.1.2.     BSP mandates ISO 20022 adoption for all retail payment systems

BSP issued Circular No. 1223, requiring all retail payment systems in the Philippines to adopt the ISO-20022 standard to enable more seamless, efficient and secure domestic and cross-border retail payments, aligned with specifications of the Bank for International Settlements–Committee on Payments and Market Infrastructures (BIS-CPMI) and the G20’s objectives on remittance affordability, speed and transparency. The BSP noted that while InstaPay and PESONet participants have adopted ISO 20022, implementation has been inconsistent, and the circular now requires consistent practice of the standard to improve transaction monitoring, compliance checks and consumer redress. The circular provides a 2-year phased implementation period and establishes an ISO-20022 Harmonisation Industry Project Team to coordinate industry-wide transition, with the BSP working closely with the payments industry for timely implementation.

2.2.         Vietnam

2.2.1.   SBV issues circular amending banking supervision procedures to simplify administrative processes

State Bank of Vietnam (“SBV”) issued Circular No. 48/2025/TT-NHN, amending and supplementing provisions across multiple circulars in the banking management and supervision framework, to reduce and simplify administrative procedures and to reflect changes in organisational structure. The Circular contains 4 (four) chapters, covering amendments on dossiers, sequence and procedures for approving foreign investors’ purchase of shares in Vietnamese credit institutions; on dossiers and procedures for revocation of licences and liquidation of assets of credit institutions and foreign bank branches, and revocation of licences for representative offices in Vietnam of foreign credit institutions and other foreign organisations conducting banking activities; and on dossiers and procedures for approving proposed personnel lists of commercial banks, foreign bank branches and non-bank credit institutions. The Circular will come into force on January 30, 2026.

2.2.2.     SBV reports November deposit and lending rate ranges

The table below captures the key Vietnamese Dong and USD interest rate ranges published by SBV for November 2025.

A. Vietnamese Dong Deposit Rates

Tenor Category	Rate Range (per annum) in per cent
Demand deposits & < 1 month	0.1 – 0.2
1 to < 6 months	3.5 – 4.3
6 to 12 months	4.6 – 5.6
> 12 to 24 months	4.9 – 6.2
> 24 months	6.7 – 7.4

B. Vietnamese Dong Lending Rates

Loan Type	Rate Range (per annum) in per cent
New & outstanding loans	6.6 – 8.9
Short‑term loans for priority sectors	3.9 (below max 4)

C. USD Lending Rates

Currency	Rate Range (per annum)
USD loans	4.0 – 4.9

3.             Trends

3.1.    Government to reboot general insurer privatisation after 100 per cent FDI liberalisation

Government of India is expected to restart the selection process in the next financial year to privatise a state-run general insurer, following Parliament’s move to raise foreign direct investment (FDI) in insurance to 100 per cent (one hundred per cent) from 74 per cent (seventy-four per cent). The report said the government expects wider investor interest and improved valuations, and that the choice of insurer is still under consideration, with a performance review of the state-owned insurers planned after the December-quarter results.

3.2.         Fintech IPO pipeline builds for 2026 listings

Multiple fintechs are positioning for initial public offerings (IPOs) in 2026 (two thousand and twenty-six), with managements at Innoviti, PayU, PayNearby and Niyo confirming listing plans even though draft papers are yet to be filed. The article also said Acko is reportedly in early discussions for a USD 300 million (United States Dollar Three Hundred Million only) to USD 400 million (United States Dollar Four Hundred Million only) listing, and that market confidence has been supported by favourable receptions to recent fintech listings.

4.             Sector Overview

4.1.         India’s forex reserves rise, boosting external buffers

India’s foreign exchange reserves increased by USD 4.36 billion (United States Dollar Four Billion Three Hundred and Sixty Million only) to USD 693.32 billion (United States Dollar Six Hundred and Ninety-Three Billion Three Hundred and Twenty Million only) for the week ended December 19, 2025. The report added that foreign currency assets rose to USD 559.42 billion (United States Dollar Five Hundred and Fifty-Nine Billion Four Hundred and Twenty Million only) and gold reserves increased to USD 110.36 billion (United States Dollar One Hundred and Ten Billion Three Hundred and Sixty Million only), underscoring a stronger reserve position that is closely tracked by BFSI participants for currency and liquidity conditions.

4.2.         RBI flags resilient demand and upgrades growth outlook

RBI, in its monthly bulletin, said India’s growth momentum held up in November on the back of strengthening urban and private consumption. The RBI noted that gross domestic product (“GDP”) expanded by 8.2 per cent (eight point two per cent) in the July–September quarter, and that it had cut the policy rate by 125 (one hundred and twenty-five) basis points in 2025, including a 25 (twenty-five) basis points cut in December. The RBI also raised its GDP forecast for the current financial year to 7.3 per cent (seven point three per cent) from 6.8 per cent (six point eight per cent), while lowering its inflation projection to 2 per cent (two per cent) from 2.6 per cent (two point six per cent).

5.             Business Updates

5.1.         Unity Small Finance Bank wins bid for Aviom India Housing Finance

Unity Small Finance Bank emerged as the winning bidder to acquire bankrupt Aviom India Housing Finance under a National Company Law Tribunal-monitored process, with an upfront offer of INR 977.5 crore (Indian Rupees Nine Hundred Seventy Seven Crore and Fifty Lakh only). The bid is expected to imply lender recovery of about 71 per cent (seventy-one per cent) and would expand Unity Small Finance Bank’s footprint in housing finance, as the resolution moves towards closure through the administrator-led process.

5.2.         Canara HSBC Life enters bancassurance partnership with Equitas Small Finance Bank

Canara HSBC Life Insurance Company Limited entered into a bancassurance partnership with Equitas Small Finance Bank to distribute life insurance products through Equitas’ network of 994 (nine hundred and ninety-four) banking outlets and 365 (three hundred and sixty-five) automated teller machines across 18 (eighteen) states and Union Territories. The tie-up is positioned as a distribution-led growth move aimed at widening insurance access through the bank’s customer base and branch network. 

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