Banking & Finance Digest July 13, 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 revises norms for utilisation of interest income from Depositories’ Investor Protection Fund

The Securities and Exchange Board of India (“SEBI”) has revised the utilisation framework for interest or income earned from the Investor Protection Fund (“IPF”) maintained by depositories. Under the revised norms, depositories must contribute at least 95 Per cent (Ninety-Five Per cent) of the annual interest or income generated from IPF investments back to the IPF corpus, replacing the earlier requirement of 100 Per cent (One Hundred Per cent) re-investment.

International Financial Services Centres Authority (IFSCA)

1.1.2.      IFSCA proposes mandatory use of FCSS for inter-IBU USD settlements in GIFT IFSC

The International Financial Services Centres Authority (“IFSCA”) has issued a consultation paper proposing a circular on the Foreign Currency Settlement System (“FCSS”) for International Banking Units (“IBUs”) operating in GIFT International Financial Services Centre (“GIFT IFSC”). The proposed framework seeks to enhance adoption of FCSS, which was launched on October 7, 2025 and currently enables settlement of United States Dollar (USD) transactions among member IBUs within approximately five to six seconds. Public comments on the draft circular have been invited until July 24, 2026.

Insurance Regulatory and Development Authority of India (IRDAI)

1.1.3.     IRDAI revises financial reporting formats for listed insurers under SEBI LODR framework

The Insurance Regulatory and Development Authority of India (IRDAI) has issued revised formats for publication of financial results by listed insurers and reinsurers to align with the adoption of Indian Accounting Standards (“Ind AS”) and disclosure requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations). The revised framework applies to listed life insurers, general insurers, health insurers and reinsurers preparing financial statements under Ind AS.  

Miscellaneous

National Payments Corporation of India (NPCI)

1.1.4.     NPCI enhances UPI biometric authentication transaction limit to INR 10,000

The National Payments Corporation of India (NPCI) has increased the per-transaction limit for on-device biometric authentication on the Unified Payments Interface (“UPI”) from INR 5,000 (Indian Rupees Five Thousand only) to INR 10,000 (Indian Rupees Ten Thousand only). The enhanced limit will be effective from August 7, 2026 and applies to transactions authenticated using biometric methods such as fingerprint and facial recognition in place of a UPI Personal Identification Number (U-PIN).   

2.               Key Asian Markets - Philippines and Vietnam

2.1.           Philippines

2.2.1.     BSP revises Discount Window Facility interest rates effective July 8, 2026

The Bangko Sentral ng Pilipinas (“BSP”) has announced revised interest rates for peso availments under its Discount Window Facility (“DWF”), effective July 8, 2026. The applicable rate for DWF loans with maturities of 1 to 90 days has been set at 6.1869 Per cent (Six Point One Eight Six Nine Per cent), while loans with maturities of 91 to 180 days will be subject to an interest rate of 6.6238 Per cent (Six Point Six Two Three Eight Per cent).

2.2.2.     BSP reports decline in headline inflation to 6.4 percent in June 2026

BSP reported that headline inflation moderated to 6.4 Per cent (Six Point Four Per cent) in June 2026 from 6.8 Per cent (Six Point Eight Per cent) in May 2026, driven primarily by lower fuel and food prices. Inflation for the first half of 2026 averaged 4.8 Per cent (Four Point Eight Per cent), remaining above the BSP’s full-year target of 3 Per cent (Three Per cent) and its tolerance range of ± 1 Per centage point. Inflation for households in the lowest 30 Per cent income group also eased to 8 Per cent (Eight Per cent) from 8.4 Per cent (Eight Point Four Per cent) in the previous month.

2.2.3      BSP promotes employer-sponsored PERA to strengthen retirement savings

BSP has urged employers to adopt the Personal Equity and Retirement Account (“PERA”) as a workplace benefit to enhance employees’ long-term financial security, BSP highlighted that PERA, established under the PERA Act of 2008, compliments existing retirement benefits provided through the Social Security System (SSS) and the Government Service Insurance System (GSIS), while encouraging greater retirement savings and investment participation. Employees in the Philippines can invest up to PHP 200,000 (Philippine Pesos Two Hundred Thousand only) annually in a PERA account, while overseas Filipinos may contribute up to PHP 400,000 (Philippine Pesos Four Hundred Thousand only) annually. Earnings and withdrawals made from the age of 55 onwards remain tax-free. BSP also highlighted enhanced incentives for employers, noting that contributions to employees’ PERA accounts are now eligible for a 150 Per cent (One Hundred Fifty Per cent) tax deduction under the Capital Markets Efficiency Promotion Act, 2025, up from the previous 100 Per cent (One Hundred Per cent) deduction. 

2.2.           Vietnam

2.2.1.   SBV issues Circular 28/2026/TT-NHNN on digitalisation of Periodic Reporting Framework

The State Bank of Vietnam ("SBV") has issued Circular 28/2026/TT-NHNN, amending Circular 09/2019/TT-NHNN on the periodic reporting regime applicable to SBV units. The circular introduces the use of information technology in the reporting process, requiring periodic reports to be submitted, received, consolidated and managed electronically through designated reporting systems and digital signatures, replacing paper-based reporting. Electronic reports signed by authorised personnel will have the same legal validity as hard-copy reports. The Circular also establishes the SBV Reporting System as a central platform for collecting, managing and sharing reporting data with relevant government systems and authorities. The amendments will take effect on 12 August 2026.

2.2.2.   SBV issues new regulations on financial leasing activities

SBV has issued Circular No. 31/2026/TT-NHNN governing the financial leasing activities of finance companies and financial leasing companies, effective August 15, 2026. The Circular comprises 36 articles across five chapters and sets out the framework for financial leasing, sale-and-leaseback transactions, electronic financial leasing and implementation requirements.

3.               Trends

3.1.        GIFT City signed a strategic partnership with Vietnam’s VIFC-DN and other institutions

Gujarat International Finance Tec-City (“GIFT City”), India’s International Financial Services Centre (“IFSC”), has signed a Memorandum of Understanding (MoU) with the Vietnam International Financial Center – Da Nang (VIFC-DN) to support the development of Vietnam’s emerging international financial centre through knowledge sharing and exchange of best practices. The collaboration will focus on financial services, fintech, digital innovation, capacity building, financial sector development and cross-border investment opportunities, while also facilitating joint research, professional exchanges and stakeholder engagement between India and Vietnam.

3.2.        GIFT City received regulatory boost for maritime leasing and financing activities

GIFT IFSC, has received a significant regulatory boost after the Government of India (GoI) exempted eligible IFSC units from obtaining licences to charter foreign vessels for export-import and international trade operations under the Coastal Shipping Act, 2025. The exemption removes the requirement to obtain approval from the Director General of Shipping and is expected to simplify maritime business operations within GIFT City.

4.               Sector Overview

4.1.        RBI reports stronger NBFC credit growth in May 2026

The Reserve Bank of India (“RBI”) reported that credit extended by Non-Banking Financial Companies (NBFCs) grew by 14.2 Per cent (Fourteen Point Two Per cent) year-on-year in May 2026, compared to 11.4 Per cent (Eleven Point Four Per cent) a year earlier. Retail lending remained the primary driver of overall growth, expanding by 19.5 Per cent (Nineteen Point Five Per cent) year-on-year, supported by robust growth in housing loans, vehicle loans and loans against gold jewellery.

4.2.        IRDAI reports 10.9 Per cent growth in non-life insurance premiums for FY 2026–27

The Insurance Regulatory and Development Authority of India (IRDAI) has released provisional flash figures showing that the non-life insurance industry’s gross direct premium underwritten reached INR 878.74 Billion (Indian Rupees Eight Hundred Seventy-Eight Billion Seven Hundred Forty Million only) for the period up to June 2026 in FY 2026–27, representing a growth of 10.9 Per cent (Ten Point Nine Per cent) compared to INR 792.53 billion (Indian Rupees Seven Hundred Ninety-Two Billion Five Hundred Thirty Million only) in the corresponding period of the previous financial year. I  

4.3.        Indian FinTech sector attracted USD 935.5 million in funding during June 2026

Indian financial technology (FinTech) companies raised USD 935.5 million (United States Dollar Nine Hundred Thirty-Five Point Five Million) across 10 funding deals in June 2026, making it the strongest funding month of the year. The funding activity spanned digital payments, cyber insurance, credit insurance, wealth management, financial planning, artificial intelligence-enabled banking and financial services technology, agritech finance and real estate risk management solutions.

4.4       RBI reports increase in foreign exchange reserves and continued growth in banking activity

RBI, in its Weekly Statistical Supplement dated July 10, 2026, reported that India’s total foreign exchange reserves stood at USD 674.19 Billion (United State Dollar Six Hundred Seventy-Four Point One Nine Billion only) as on July 3, 2026, reflecting a weekly increase of USD 7.26 Billion (United State Dollar Seven Point Two Six Billion only). The increase was driven mainly by growth in foreign currency assets and gold reserves. The RBI also reported that aggregate deposits of Scheduled Commercial Banks reached INR 265.38 Trillion (Indian Rupees Two Hundred Sixty-Five Point Three Eight Trillion only) as on June 30, 2026, recording year-on-year growth of 13.3 Per cent (Thirteen Point Three Per cent). Bank credit stood at INR 219.28 Trillion (Indian Rupees Two Hundred Nineteen Point Two Eight Trillion only), reflecting year-on-year growth of 18.6 Per cent (Eighteen Point Six Per cent).

5.           Business Updates

5.1.        Ujjivan SFB launched wealth management services with INR 200 crore AUM target

Ujjivan Small Finance Bank (Ujjivan SFB) has entered the wealth management and affluent banking segment, aiming to achieve approximately INR 200 crore (Indian Rupees Two Hundred Crore only) in mutual fund assets under management (AUM) during its first year of operations. As part of this initiative, the bank has commenced mutual fund distribution and is expanding its offerings to cater to affluent customers seeking investment and wealth creation solutions.

5.2      Indian banks accelerated pursuit of global credit ratings to strengthen overseas fundraising

Indian banks are increasingly obtaining international credit ratings as they seek to diversify funding sources, access global debt markets and mobilise foreign-currency deposits. The trend has gained momentum following recent measures by the RBI to encourage Foreign Currency Non-Resident (Bank) deposits (“FCNR (B) deposits”) and overseas borrowings. Recently, Federal Bank secured an inaugural investment-grade rating of BBB-/Stable from S&P Global Ratings, while YES Bank also obtained an international issuer rating to strengthen its overseas funding profile.

5.3        Punjab & Sind Bank received approval to establish IFSC Banking Unit at GIFT City

Punjab & Sind Bank has received a licence from the IFSCA to establish an IFSC IBU at GIFT City, Gandhinagar. The approval marks a significant step in the bank’s international expansion strategy and follows the earlier permission granted by the RBI for setting up the unit.

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