AKP Banking & Finance Digest June 16, 2025
- AK & Partners
- Jun 16
- 10 min read
We are delighted to share this week's AKP Banking & Finance Weekly Digest. Please feel free to write to us with your feedback at info@akandpartners.in. We shall now be hosting our weekly updates at Spotify!
1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI publishes updated FAQs on KYC compliance framework
The Reserve Bank of India (“RBI”) has released updated Frequently Asked Questions (“FAQs”) on the Master Direction on Know Your Customer (“KYC”) dated February 25, 2016. The revised FAQs clarify procedural aspects including the definition of “Walk-in Customer,” mandatory instances for KYC verification, and documentation norms for existing account holders.
1.1.2. RBI issues unified directions for lending against gold and silver collateral
RBI has issued the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025, with effect from June 6, 2025. These Directions consolidate over thirty earlier circulars to introduce a harmonised regulatory framework for loans secured by gold and silver across all Regulated Entities (“REs”), including Commercial Banks (excluding Payments Banks), Co-operative Banks, and Non-Banking Financial Companies (“NBFCs”), including Housing Finance Companies.
1.1.3. RBI announces phased reduction in CRR to three per cent
RBI has notified a phased reduction in the Cash Reserve Ratio (“CRR”) of all banks by one hundred basis points, bringing the CRR down to three per cent (3.0 per cent) of Net Demand and Time Liabilities (NDTL).
1.1.4. RBI revises penal interest rates following reduction in Bank Rate
RBI pursuant to the Monetary Policy Statement 2025–26, has reduced the Bank Rate by fifty basis points from 6.25 per cent (six point two five per cent) to 5.75 per cent (five point seven five per cent) with immediate effect. Consequently, penal interest rates on shortfalls in CRR and Statutory Liquidity Ratio (SLR) requirements linked to the Bank Rate stand revised.
1.1.5. RBI clarifies prudential treatment of PSL shortfall contributions by UCBs
RBI has exempted Primary (Urban) Co-operative Banks from exposure limits when contributing to eligible funds with NABARD, NHB, SIDBI, or MUDRA Ltd. for Priority Sector Lending (“PSL”) shortfalls. Such contributions will now attract a 100 per cent (one hundred per cent) risk weight under capital adequacy norms. The directions are effective immediately.
1.1.6. RBI expands LEF exemptions for PSL shortfall contributions
RBI has amended the Large Exposures Framework (“LEF”), extending the exemption from exposure limits to include contributions made by Scheduled Commercial Banks to NHB, SIDBI, MUDRA Ltd., and other RBI-specified entities for PSL shortfalls, in addition to NABARD. The revised exemption is effective immediately.
1.1.7. RBI lifts restrictions on use of BRIPL ratings under Basel III
RBI has removed restrictions on the use of Brickwork Ratings India Private Limited (“BRIPL”) for capital adequacy purposes under the Basel III Capital Regulations. Scheduled Commercial Banks may now fully utilise BRIPL ratings for risk weighting of claims. All other provisions in the Master Circular remain unchanged. The directions are effective immediately.
1.1.8. RBI eases KYC compliance for low-risk customers
RBI has issued the Reserve Bank of India (Know Your Customer (KYC)) (Amendment) Directions, 2025, amending the 2016 Master Direction. REs must now permit low-risk customers to transact and update KYC by June 30, 2026 or within one year of the due date. Banks may use Business Correspondents to collect self-declarations electronically. REs must also issue three advance and three post-due reminders for periodic KYC updation, with at least one reminder by letter. Full implementation is required by January 01, 2026.
1.1.9. RBI revises KYC update norms to ease compliance
RBI has issued revised instructions to address delays in periodic KYC updation, particularly for Direct Benefit Transfer (“DBT”) accounts, PMJDY accounts, and similar schemes. REs may now use Business Correspondents for facilitating KYC updates, as notified under the Amendment Directions. Banks are advised to hold intensive KYC camps, especially in rural and semi-urban areas with high pendency. Activation of inactive accounts must be approached empathetically. A consolidated set of onboarding and KYC update guidelines has been enclosed for operational clarity.
1.1.10. RBI introduces STRIPS in State Government Securities
RBI has operationalised Separate Trading of Registered Interest and Principal of Securities (“STRIPS”) in State Government Securities (“SGS”), effective June 12, 2025. All fixed coupon SGS with residual maturity up to fourteen years and minimum outstanding of INR 1,000 crore (Indian Rupees One Thousand Crore only) are eligible. Market participants may use the e-Kuber system; gilt account holders must route requests via custodians. STRIPS nomenclature will mirror that of Central Government securities. Existing guidelines on stripping/reconstitution will apply mutatis mutandis.
The International Financial Services Centres Authority (IFSCA)
1.1.11. IFSCA eases GRCTC staffing norms for initial year
IFSCA, vide circular dated June 09, 2025, has amended the Global/Regional Corporate Treasury Centre (“GRCTC”) Framework to allow the Chairperson to relax the requirement of appointing 5 (five) qualified personnel in IFSC—including Head of Treasury and Compliance Officer—for up to 1 (one) year from operations commencement, based on proposed activities and projected business volume.
1.1.12. IFSCA releases RFP for DPR platform
IFSCA has issued a Request for Proposal (“RFP”) for developing a Digital Regulatory Reporting (“DRR”) Solution. This initiative marks the foundational step toward building a robust Supervisory Technology (SupTech) infrastructure leveraging frontier technologies to enhance regulatory oversight.
Penalties
1.1.13. RBI extends regulatory directions on Pune Sahakari Bank Ltd.
RBI has extended the applicability of directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949, on Pune Sahakari Bank Ltd., Shivajinagar, Pune, from close of business on June 10, 2025, to September 10, 2025. The directions, originally imposed on March 10, 2023, restrict the bank's operations and continue unchanged. RBI clarified that this extension should not be construed as indicative of satisfaction with the bank’s financial health. RBI.
1.1.14. RBI extends restrictions on National Mercantile Co-operative Bank Ltd., Lucknow
RBI has extended the operational restrictions imposed under Section 35A read with Section 56 of the Banking Regulation Act, 1949, on National Mercantile Co-operative Bank Ltd., Lucknow, for a further period of three months—from close of business on June 10, 2025, to September 10, 2025. All existing terms remain unchanged. The extension, notified via directive dated June 10, 2025, is subject to review and does not imply RBI’s satisfaction with the bank’s financial position
1.1.15. RBI extends restrictions on Sikar Urban Co-operative Bank Ltd.
RBI has extended the Directions issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, on Sikar Urban Co-operative Bank Ltd., Sikar, Rajasthan, from close of business on June 09, 2025, to September 09, 2025. These Directions, initially imposed in October 2018 and extended periodically, remain unchanged in substance. The extension is subject to review and does not imply RBI’s satisfaction with the bank’s financial condition.
1.1.16. RBI extends restrictions on The Amanath Co-operative Bank Ltd., Bangalore
RBI has extended the Directions imposed under Section 35A read with Section 56 of the Banking Regulation Act, 1949, on The Amanath Co-operative Bank Ltd., Bangalore, for a further period of three months—from close of business on June 12, 2025, to September 12, 2025. The extension, issued via directive dated June 12, 2025, is subject to review. All existing conditions remain in force. This action should not be construed as RBI’s satisfaction with the bank’s financial soundness.
1.1.17. RBI extends restrictions on The Karwar Urban Co-operative Bank Ltd., Karwar
RBI has extended the Directions issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, on The Karwar Urban Co-operative Bank Ltd., Karwar, for a further period of three months—from close of business on June 12, 2025, to September 12, 2025. The extension is based on public interest considerations and is subject to review. Existing terms remain unchanged. This extension does not imply RBI’s satisfaction with the bank’s financial health.
1.1.18. RBI cancels Certificate of Registration of six NBFCs
RBI has cancelled the Certificate of Registration (“COR”) of the following NBFCs under Section 45-IA(6) of the Reserve Bank of India Act, 1934. Accordingly, these entities are no longer permitted to carry on the business of a Non-Banking Financial Institution as defined under Section 45-I(a) of the said Act.
Sr. No | Name of the Company | Registered Office Address | CoR No. | CoR Issued On | Cancellation Order Date |
1 | Wofin Leasing and Finance Private Limited | 7 Ganesh Chandra Avenue, PS: Bowbazar, Kolkata, West Bengal 700013 | B-05.06747 | March 13, 2008 | May 16, 2025 |
2 | Outram Properties Pvt Ltd | 23A, NS Road, 10th Floor, Kolkata, West Bengal 700001 | 05.03224 | September 09, 1999 | May 16, 2025 |
3 | SCM Holding Private Limited | 11/1A Sarojini Naidu Sarani, Lowdon Street, Kolkata, WB 700017 | 05.03245 | September 24, 1999 | May 16, 2025 |
4 | Kalash Vyapaar Private Limited | 75C, Park Street, 3rd Floor, Kolkata, West Bengal 700016 | N.05.06592 | December 30, 2005 | May 16, 2025 |
5 | Everest Vinimay Private Limited | 3A, Garstin Place, 6th Floor, Kolkata, West Bengal 700001 | N.05.06604 | February 06, 2006 | May 16, 2025 |
6 | Adhikar Microfinance Private Limited | Plot No-77/180/970, Subudhipur, Tomando, Bhubaneswar, Odisha 752054 | 04.00021 | October 22, 2013 | May 20, 2025 |
1.1.19. RBI cancels CoR of four NBFCs upon surrender
RBI has cancelled the CoR of four NBFCs under Section 45-IA(6) of the Reserve Bank of India Act, 1934, following the voluntary surrender of their CoRs. The reasons for surrender include both exit from the Non-Banking Financial Institution (“NBFI”) business and legal dissolution via merger or strike-off.
i) Exit from NBFI Business:
Sr. No. | Name of the Company | Registered Office Address | CoR No. | CoR Issued On |
1 | Benco Finance and Investments Private Limited | Room No-1-2, Kapadia Chambers, 51 Bharuch Street, Masjid Bunder (E), Mumbai – 400009 | B-13.01738 | February 05, 2004 |
2 | Pamnani Capita Private Limited | A/3 1603, 16th Floor, Lok Nirman Building, Dr Ambedkar Road, Khar (West), Mumbai – 400052 | B-13.02350 | June 12, 2019 |
ii) Legal Dissolution (Amalgamation/Merger/Strike-off):
Sr. No. | Name of the Company | Registered Office Address | CoR No. | CoR Issued On |
1 | Parrys Investments Limited | 234, NSC Bose Road, Dare House, Parrys Corner, Chennai, Tamil Nadu – 600001 | B.07.00129 | December 05, 2006 |
2 | Synergy Synthetics Private Limited | 84-A, Mittal Court, 8th Floor, 224, Nariman Point, Mumbai – 400021 | N-13.01332 | September 22, 2000 |
2. Key Asian Markets – Indonesia & Vietnam
2.1. Indonesia
2.1.1. Indonesia’s Net IIP liability declines in Q1 2025
Bank Indonesia reported a decrease in net International Investment Position (“IIP”) liability to USD 224.5 Billion (United States Dollar Two Hundred Twenty-Four Billion Five Hundred Million only), driven by a rise in Foreign Financial Assets and a decline in Foreign Financial Liabilities. The IIP-to-GDP ratio improved to 16 per cent (sixteen per cent), reflecting stronger external resilience amid sustained investor confidence and favourable global conditions.
2.2. Vietnam
2.2.1. Vietnam proposes establishing International Financial Centre with global ambitions
At the 9th National Assembly session, the Government introduced a draft resolution for developing an International Financial Centre (“IFC”) in Ho Chi Minh City, focusing on a modern, competitive, and globally integrated financial ecosystem. The proposal outlines breakthrough institutional reforms and infrastructure upgrades to attract global investors. Products will include traditional, green, and digital financial instruments. Government of Vietnam.
3. Trends
3.1. India to develop indigenous 2nm GPU by 2030 to reduce AI dependency
The Centre for Development of Advanced Computing (“C-DAC”) has initiated efforts to design a 2 (two) nanometre GPU by 2030, targeting self-reliance in Artificial Intelligence (“AI”) hardware. The project has received a funding commitment of USD 200 Million (United States Dollar Two Hundred Million only). To achieve scale and cost-efficiency—reportedly at 50 per cent less cost—the Centre is expected to collaborate with Taiwan Semiconductor Manufacturing Company Limited (TSMC) for fabrication.
3.2. RBI Governor raises red flag on cryptocurrencies impacting financial stability
RBI, Mr. Sanjay Malhotra, flagged concerns regarding cryptocurrencies, stating they may hamper financial stability and impede effective conduct of monetary policy. This follows the Supreme Court’s observation questioning the Centre’s delay in enacting a dedicated regulatory framework for cryptocurrencies, especially in light of the existing 30 per cent (thirty per cent) tax on profits from trading Bitcoin, which, according to the Court, may imply legal recognition.
3.3. Meesho to file IPO papers via confidential route: E-commerce major
Meesho is set to file its draft red herring prospectus (“DRHP”) in the coming weeks through the confidential route, targeting a public issue size of USD 700 Million to USD 800 Million (United States Dollar Seven Hundred Million to Eight Hundred Million only). The move follows board approval for conversion into a public company. Meesho has appointed Citigroup, Kotak Mahindra Capital, and Morgan Stanley as its investment bankers. This development comes amidst a wave of confidential filings by Indian startups such as Groww, Shiprocket, boAt, and PhysicsWallah.
3.4. Centre to reinitiate consultations on National E-commerce Policy
The Ministry of Commerce and Industry has confirmed that deliberations on the proposed National E-commerce Policy and Retail Trade Policy have resumed. As per Commerce and Industry Minister Piyush Goyal, earlier proposals are being revised to ensure alignment with evolving market realities and technological advancements. The original 2019 draft policy addressed six core areas: data governance, infrastructure development, e-commerce marketplaces, regulatory frameworks, domestic digital economy, and e-commerce exports.
4. Sector Overview
4.1. Centre notifies SEZ reforms to promote semiconductor, electronics manufacturing
The Central Government has amended key provisions of the Special Economic Zone (“SEZ”) Rules, 2006 to support high-tech sectors. Key changes include lowering land requirements for semiconductor SEZs to 10 hectares, easing norms on encumbered land, permitting free-of-cost supplies in NFE calculations, and allowing DTA sales on payment of duties. These reforms aim to bolster India’s semiconductor and electronics component ecosystem. Ministry of Commerce and Industry.
4.2. Centre approves Micron’s INR 13,000 Crore semiconductor SEZ in Gujarat
The Government of India has granted approval to Micron Technology to establish a SEZ in Sanand, Gujarat, spread across 37.6 (thirty seven point six) hectares, with a proposed investment of INR 13,000 Crore (Indian Rupees Thirteen Thousand Crore only) for semiconductor manufacturing. In parallel, Aequs received approval for setting up an SEZ in Dharwad, Karnataka, with an INR 100 Crore (Indian Rupees One Hundred Crore only) investment to manufacture electronic components. These developments follow the recent SEZ regulatory liberalisation aimed at catalysing India’s electronics and semiconductor ecosystem.
4.3. BOPT enables AI apprenticeship tagging on NATS 2.0 portal
The Board of Practical Training (“BOPT”), Eastern Region, has introduced a new feature on the NATS 2.0 portal, allowing establishments to designate apprentices as “AI Apprentices.” This enables integration of AI training modules into apprenticeship contracts, aligning with India’s AI skill development goals. Organisations are encouraged to post AI apprenticeship opportunities and tag relevant contracts accordingly.
5. Business Updates
5.1. RBI announces Decision on an application received under Guidelines for ‘on tap’ Licensing of Universal Banks
RBI has completed the examination of the application of Annapurna Finance Private Limited for setting-up a universal bank. Based on the assessment of the application as per the procedure laid down under extant guidelines, the applicant was not found suitable for granting of in-principle approval to set up a universal bank.
5.2. CCPA directs e-commerce platforms to eliminate dark patterns
The Central Consumer Protection Authority (“CCPA”) has issued an advisory requiring e-commerce platforms to self-audit for ‘Dark Patterns’, i.e., deceptive design practices, within three months. Platforms are encouraged to submit self-declarations affirming compliance with the 2023 Guidelines. A Joint Working Group has also been constituted to monitor violations and raise consumer awareness.
5.3. PhonePe acquires GSPay to expand UPI access to feature phone users
PhonePe has acquired GSPay, the proprietary UPI technology developed by conversational AI platform Gupshup, in an undisclosed deal. Built on NPCI’s UPI 123PAY framework, GSPay enables Unified Payments Interface (“UPI”) functionality for feature phones. With this acquisition, PhonePe intends to customise and relaunch the platform under its own ecosystem, thereby extending digital payment access to India’s large base of feature phone users.
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
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