Banking & Finance Digest August 24, 2026

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.

1.              Regulatory Updates

1.1.          India

Securities and Exchange Board of India (SEBI)

1.1.1.     SEBI proposes Revised Advertisement Code for Online Bond Platform Providers

The Securities and Exchange Board of India ("SEBI") has issued a consultation paper proposing revisions to the Advertisement Code applicable to Online Bond Platform Providers ("OBPPs") in response to the rapid growth of digital bond distribution and online investor participation. The proposed framework seeks to strengthen investor protection by mandating standardised disclosures in advertisements, including issuer details, tenor, credit rating, Credit Risk-o-meter, security type, Clean Price, Dirty Price and Yield to Maturity (YTM). SEBI has also proposed permitting the use of terms such as fixed returns, predictable returns and passive income, subject to prominent risk disclosures and disclaimers clarifying that returns are not guaranteed. The proposals further prohibit vague promotional expressions such as “high returns” or “high yield” and seek to curb advertisements that create urgency, fear of missing out or misleading impressions. Public comments on the consultation paper may be submitted until 11 September 2026.

1.1.2.     SEBI proposes Fixed Income Channel Partner Framework for Bond distribution through OBPPs

SEBI has issued a consultation paper proposing the introduction of Fixed Income Channel Partners ("FICPs") to facilitate the distribution of fixed income securities through OBPPs. The proposed framework seeks to expand retail participation in the corporate bond market, particularly in Tier II, Tier III and rural regions, by creating a distribution network similar to the Mutual Fund Distributor (MFD) model. Under the proposal, eligible individuals and entities meeting prescribed qualifications, including National Institute of Securities Markets (NISM) certification requirements, may be enlisted by stock exchanges and appointed by one or more OBPPs. FICPs will be permitted to assist investors with onboarding, Know Your Customer ("KYC") procedures and transaction facilitation, but will be prohibited from handling client funds or securities. SEBI has also proposed enhanced supervision and due diligence obligations for OBPPs, with public comments invited until 11 September 2026.

1.1.3.     SEBI releases studies on Retail Participation and Profitability in Equity Derivatives Trading

SEBI has released two studies analysing the profitability and trading behaviour of individual investors in the Equity Derivatives Segment (EDS) during FY25-FY26. The studies found that active individual traders declined by 20 per cent (twenty per cent) to 78.6 lakh in FY26. At the same time, aggregate net losses narrowed to approximately INR 91,685 crore (Indian Rupees Ninety-One Thousand Six Hundred Eighty-Five Crore only) from INR 1.12 lakh crore (Indian Rupees One Lakh Twelve Thousand Crore only) in FY25. However, 87.7 per cent (eighty-seven point seven per cent) of individual traders continued to incur losses, with around 92 per cent (ninety-two per cent) of aggregate losses arising from options trading. SEBI also observed that trading remained heavily concentrated in short-dated options contracts, loss rates were significantly higher among younger and small-portfolio investors, and increased trading experience did not necessarily improve profitability. The studies aim to support informed policy discussions and enhance understanding of retail participation in the derivatives market. 

1.1.4.     SEBI revises regulatory framework for Online Bond Platform Providers

SEBI has modified the regulatory framework applicable to OBPPs to promote ease of doing business and broaden investment offerings. Under the revised framework, OBPPs will be permitted to offer products, securities and services regulated by the International Financial Services Centres Authority ("IFSCA"), as well as bonds issued under Section 54EC of the Income-tax Act, 1961 and Section 85 of the Income-tax Act, 2025. SEBI has also introduced changes relating to compliance officer requirements for OBPPs. The amendments are intended to enhance operational flexibility, expand product availability for investors and further develop India’s digital bond market ecosystem.

1.1.5.     SEBI permits acceptance of Digitally Signed Power of Attorney for FPIs

SEBI has permitted the acceptance of digitally signed Powers of Attorney (“PoAs”) from Foreign Portfolio Investors (“FPIs”) in accordance with the Information Technology Act, 2000, as part of its ongoing efforts to digitise and streamline the FPI onboarding process. Under the revised framework, digitally signed PoAs furnished to custodians will now be accepted without the need for notarisation, apostillisation or consularisation, thereby reducing onboarding timelines and improving ease of doing business for FPIs. The amendment to the FPI Master Circular came into effect on 20 August 2026.

1.1.6.     SEBI enables KRA information sharing with IFSCA-Regulated Entities

SEBI has authorised KYC Registration Agencies ("KRAs") to share KYC information with entities regulated by IFSCA, with immediate effect. The move seeks to enhance interoperability and facilitate seamless access to KYC records across the financial sector. SEBI has clarified that IFSCA-regulated entities accessing KRA systems must comply with the provisions of the SEBI KRA Regulations, relevant KYC guidelines, and, in the case of FPIs, data security requirements prescribed under the applicable FPI framework.

1.1.7.     SEBI revises and consolidates Mutual Fund Registration Application Process

SEBI has revised the application framework for registration of Mutual Funds by introducing a consolidated application form that replaces the existing multi-form process. Previously, sponsors were required to submit separate forms for in-principle approval and final registration; however, following the overhaul of the SEBI (Mutual Funds) Regulations, 2026 and the SEBI (Intermediaries) Regulations, 2008, SEBI has merged these requirements into a single comprehensive registration form. The revised framework aims to streamline the registration process, enhance regulatory efficiency and simplify compliance requirements for entities seeking to establish Mutual Funds and Asset Management Companies ("AMCs"). The circular is effective immediately, while all other provisions of the existing Mutual Fund Master Circular remain unchanged.

International Financial Services Centres Authority

1.1.8.     IFSCA issues consultation paper on Leasing of GPUs and Data Centre Equipment in GIFT IFSC

The IFSCA has issued a consultation paper proposing to recognise operating leases, including hybrid operating and financial leases, of Graphics Processing Units (GPUs) and connected data centre equipment as a financial product within GIFT International Financial Services Centre (“GIFT IFSC”). The proposal aims to support India's growing Artificial Intelligence ("AI") ecosystem by facilitating access to high-value computing infrastructure through leasing arrangements rather than outright ownership. IFSCA noted that India's AI GPU capacity is expected to increase from 38,000 as of October 2025 to 1,00,000 by the end of 2026, while AI-driven demand could create a USD 23 billion investment opportunity over the next five years. The regulator believes that enabling GPU leasing could strengthen GIFT IFSC's leasing ecosystem, attract global leasing activity and improve access to critical AI infrastructure. Stakeholder comments have been invited until 28 August 2026.

1.1.9.     IFSCA issues updated SEZ compliance FAQs for IFSC units

IFSCA has released Version 2.0 of its SEZ Compliance FAQs Booklet to provide comprehensive guidance on compliance requirements applicable to units operating in GIFT IFSC under the Special Economic Zones Act, 2005 (SEZ Act). The booklet consolidates key procedural and compliance requirements relating to Letters of Approval ("LOAs"), Bond-cum-Legal Undertakings (BLUTs), lease deeds, commencement of operations, reporting obligations, broad-banding of services, renewals, exits and penal provisions. It also clarifies that various compliance processes, including LOA applications, amendments, extensions, and reporting, must be submitted through the SEZ Online portal, and it highlights timelines, documentation requirements, and the consequences of non-compliance. The guidance is intended to enhance regulatory clarity and ease of doing business for IFSC units.

Monetary Penalty

Reserve Bank of India imposes a monetary penalty on:

S. No.	Name of Bank	Amount of Penalty	Contravention
1.	Shri Ram Finance Corporation Private Limited	INR 8,10,000/-  (Indian Rupees Eight Lakh Ten Thousand only)	Non-compliance with RBI directions relating to governance and KYC requirements, including: (i) failure to obtain prior written RBI approval for appointment of a director resulting in a change in management through change in more than 30 percent (thirty percent) of directors (excluding independent directors); (ii) failure to categorise customers into low-, medium- and high-risk categories; and (iii) failure to upload KYC records of certain customers to the Central KYC Records Registry within the prescribed timeline.
2.	Progfin Private Limited	INR 2,70,000/-  (Indian Rupees Two Lakh Seventy Thousand only)	Non-compliance with the Reserve Bank of India KYC Directions by failing to put in place a system for periodic review of customer risk categorisation, with such reviews required to be conducted at least once every six months.

2.                Key Asian Markets – Philippines and Indonesia

2.1.             Philippines

2.1.1.        BSP Announces Achievement of Digital Payments Target for 2025

The Bangko Sentral ng Pilipinas (BSP) has announced that digital payments accounted for 64.7 per cent (sixty-four point seven per cent) of total retail payment transactions in 2025, up from 57.4 per cent (fifty-seven point four per cent) in 2024, thereby achieving the Philippine Development Plan target range of 60 percent (sixty per cent) to 70 per cent (seventy per cent) for 2023-2028. Growth in digital payments was supported by a 69.4 per cent (sixty-nine point four per cent) increase in digital payment accounts and a 36.3 per cent (thirty-six point three per cent) rise in merchant locations accepting digital payments. The BSP further noted that QR Ph transactions surpassed debit and credit card transactions for the first time, with 2.47 billion transactions valued at PHP 1.16 trillion, while PESONet transactions exceeded cheque payments, reflecting increased adoption of electronic fund transfers. The BSP attributed this progress to enhanced interoperability across payment systems and expects continued growth, supported by measures aimed at improving the accessibility and affordability of digital payments.

2.2.             Indonesia

BI reports Continued Growth in Broad Money in July 2026

Bank Indonesia (BI) has reported that broad money ("M2") increased by 8.3 Per cent (eight point three per cent) year-on-year in July 2026, reaching IDR 10,371.1 trillion, although at a slower pace compared to the 8.7 per cent (eight point seven per cent) growth recorded in June 2026. The growth was driven by an expansion in narrow money ("M1"), which grew by 10.0 per cent (ten point zero per cent), and quasi-money, which increased by 5.6 per cent (five point six per cent). BI attributed the latest M2 growth primarily to stronger disbursed loans, which accelerated to 13.0 per cent (thirteen point zero per cent) year-on-year from 12.1 per cent (twelve point one per cent) in June 2026, while growth in net claims on the central government moderated to 4.6 per cent (four point six percent) from 10.1 percent (ten point one percent) in the previous month.

3.              Trends

3.1.          RBI Swap Facility Drives Surge in Overseas Fund-Raising by Indian Banks

Indian banks have raised approximately USD 12 billion through overseas debt issuances in 2026, driven by the RBI one-time swap facility and strong global investor appetite for Indian banking sector debt. Of this amount, around USD 10 billion was raised after the RBI announced the special facility in June 2026 to support foreign currency inflows, including Foreign Currency Non-Resident (Bank) (“FCNR (B)”) deposits. During the past week alone, several major lenders, including HDFC Bank Limited, ICICI Bank Limited, Kotak Mahindra Bank Limited, IDFC First Bank Limited and Bank of Baroda, collectively raised USD 4.4 billion. Market participants noted that demand for Indian bank bonds remained robust despite increased issuance volumes, highlighting investor confidence in the sector and supporting banks’ efforts to diversify funding sources and strengthen liquidity.

3.2.       Government receives presidential assent for amendments to Payment Systems and Taxation Framework

The President of India has granted assent to the amendments to the Payment and Settlement Systems Act, 2007 ("PSS Act") and the Taxation and Other Laws (Amendment) Act, 2026. The amendments to the PSS Act provide statutory backing for the Government to modify the existing zero Merchant Discount Rate (MDR) framework applicable to Unified Payments Interface (UPI) and RuPay transactions through future notifications. While UPI payments will continue to remain free for consumers, any future MDR is expected to apply only to specified categories of merchant transactions. Separately, the taxation amendments seek to attract foreign investment, facilitate relocation of fund managers to India, and promote domestic electronics manufacturing through extended tax incentives and greater regulatory certainty.

3.3.          RBI reports sharp increase in India’s Foreign Exchange Reserves

RBI has reported that India’s foreign exchange reserves increased by USD 9.9 billion to USD 716.90 billion for the week ended 14 August 2026, marking the second consecutive week of significant growth. The increase was primarily driven by a rise in foreign currency assets, which grew by USD 7.2 billion to USD 581.85 billion, and gold reserves, which increased by USD 2.67 billion to USD 111.41 billion. The growth reflects inflows under the FCNR (B) deposit scheme announced by the RBI and further strengthens India’s external sector position and resilience against global economic uncertainties.

4.              Sector Overview

4.1.        Startup Funding Round-Up Highlights Diverse Capital Raises Across Sectors

Several Indian start-ups secured fresh funding during the week ended 23 August 2026, underscoring continued investor interest across technology, fintech, healthcare, mobility and consumer sectors. Notable transactions included NeoGeo’s USD 20 million Series A funding from Neev II Fund and Aavishkaar Capital to expand its geospatial technology platform, and Resolv’s USD 12.5 million Series A round led by Norwest, Vertex Ventures Southeast Asia and India, and 3one4 Capital to strengthen its Artificial Intelligence ("AI")-enabled lending technology solutions for banks and Non-Banking Financial Companies ("NBFCs").

5.              Business Updates

5.1.          Navi secures USD 100 million funding from Prosus ahead of planned IPO

Navi Technologies Limited ("Navi"), the fintech company founded by Flipkart co-founder Sachin Bansal, has secured USD 100 million in its first institutional funding round from Dutch technology investor Prosus N.V. ("Prosus"). The investment comes ahead of Navi's planned initial public offering ("IPO") and is subject to regulatory approvals, including clearance from the Competition Commission of India ("CCI"). Navi, which offers digital payments, lending, mutual funds and insurance products through its digital platform, is reportedly targeting a valuation of approximately USD 2 billion for its proposed IPO. The transaction highlights continued investor confidence in India's fintech sector and is expected to support Navi's next phase of growth and expansion.

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