Banking & Finance Digest March 09, 2026

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1.              Regulatory Updates

1.1.          India

Reserve Bank of India (RBI)

1.1.1.      RBI alerts Regulated Entities to UNSC 1267/1989 Delisting and Sanctions-Screening Actions

Reserve Bank of India (“RBI”) issued a communication to banks, non-banking financial companies and other Regulated Entities (“REs”) on implementing the Unlawful Activities (Prevention) Act, 1967, noting that the United Nations Security Council (“UNSC”) Committee under the 1267 (1999) / 1989 (2011) / 2253 (2015) sanctions regime has, delisted 1 (one) entity: AL NUSRAH FRONT FOR THE PEOPLE OF THE LEVANT (including multiple aliases, such as Hay’at Tahrir al-Sham), and consequently the related asset-freeze, travel-ban and arms-embargo measures no longer apply to that entry. RBI has directed all REs to take action as per the Reserve Bank of India – Know Your Customer Directions, 2025, including updating screening against UNSC sanctions lists and following the procedure in the Unlawful Activities (Prevention) Act, 1967.

1.1.2.      RBI issues Draft Amendment Directions for Review of Framework of Limiting Customer Liability in Digital Transactions

RBI issued draft amendment directions for public comments to revise the framework on limiting customer liability in unauthorised and other fraudulent electronic banking transactions, noting that the digital payments and banking landscape has evolved since the 2017 instructions. The proposed changes seek to widen the scope of the existing framework, reduce the time taken by banks to process fraud complaints, and introduce a compensation mechanism for small-value fraudulent electronic banking transactions. The draft amendments have been issued across multiple categories of regulated entities, including commercial banks, small finance banks, payments banks, local area banks, regional rural banks, urban co-operative banks and rural co-operative banks. RBI has stated that the proposed compensation mechanism will remain in force for 1 (one) year from the effective date and will thereafter be reviewed with the objective of increasing banks’ share and reducing or eliminating RBI’s share in compensation paid to victims. Comments and feedback may be submitted on or before April 6, 2026.

1.1.3.      RBI cancels the licence of Shimsha Sahakara Bank Niyamitha, Maddur, Mandya District, Karnataka

RBI stated that its speaking order dated July 5, 2024, cancelling the banking licence of Shimsha Sahakara Bank Niyamitha, Maddur, Mandya District, Karnataka stands revived and in force after the High Court of Karnataka dismissed the related writ petition as withdrawn on February 17, 2026. RBI noted that a directive imposed on February 23, 2023, had been extended during the pendency of the proceedings (most recently up to close of business on May 24, 2026) pursuant to an interim order dated July 25, 2024, but that the withdrawal restores the effect of the licence-cancellation order. RBI further stated that the bank is prohibited with immediate effect from conducting the business of banking and other banking-related business under the Banking Regulation Act, 1949.

Securities and Exchange Board of India (SEBI)

1.1.4.      SEBI introduces Voluntary Lock‑In / Debit Freeze Facility for Mutual Fund Investors

The Securities and Exchange Board of India (“SEBI”) has announced the launch of a voluntary lock‑in or debit freeze facility for mutual fund folios, applicable to both demat and non‑demat accounts. This initiative aims to enhance digital security by preventing any debit of units from an investor’s folio until it is deliberately unlocked by the holder. In the initial phase, the feature will be offered through the MF Central platform and will be available only to fully KYC‑compliant investors with valid email and mobile details. AMFI will define the detailed procedures for locking and unlocking folios, along with clarifying which financial and non‑financial transactions remain permissible during the freeze period. All AMCs and RTAs will be required to publish these processes on their websites and within the Statement of Additional Information. The circular becomes effective from 30 April 2026.

1.1.5.      SEBI Issues Comprehensive Guidelines for Custodians

The SEBI has issued detailed operational and governance guidelines for Custodians under the amended SEBI (Custodian) Regulations, 1996 ("Custodian Regulations"). The circular outlines requirements on segregation of financial services activities, outsourcing of functions, vault specifications for physical securities, strengthened governance structures, enhanced risk management frameworks and mandatory Business Continuity Planning ("BCP") and Disaster Recovery ("DR") protocols. It also discontinues several duplicate reporting requirements to streamline compliance. Most provisions take effect from 24 March 2026, with additional timelines for implementation of orderly winddown frameworks and Disaster Recovery Site ("DRS") standards.

1.1.6.      SEBI Revises Reporting Framework for Alternative Investment Funds

SEBI has updated the regulatory reporting framework for Alternative Investment Funds ("AIFs") under the SEBI (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations"). Under the revised structure, AIFs will now submit a comprehensive Annual Activity Report ("AAR") each financial year through the SEBI Intermediary Portal (SI Portal) within 30 calendar days from the end of March, with the first AAR due by 31 May 2026. Additionally, AIFs must file a limited Quarterly Activity Report ("QAR") within 15 calendar days of each quarter‑end, starting with the quarter ending June 2026. The AAR will replace the QAR submission for the March quarter. Updated reporting formats will be published by the Indian Venture and Alternate Capital Association (IVCA) within three days, which will also support AIFs in meeting the revised requirements. These changes aim to streamline compliance and ease operational burden while ensuring regulatory oversight.

Miscellaneous

International Financial Services Centres Authority (IFSCA)

1.1.7.      IFSCA sets fee structure for IFSC activities and Informal Guidance Scheme

The International Financial Services Centres Authority (“IFSCA”) has issued a circular detailing the fees applicable to entities undertaking or planning permissible activities in International Financial Services (“IFSC”), as well as to individuals seeking guidance under the Informal Guidance Scheme. The fees cover a range of categories, including application, recurring, activity-based, processing, charges for delays in submissions and informal guidance. Payments are to be made in USD, with INR accepted for application and registration fees, into designated IFSCA bank accounts. The Authority may grant exemptions or relaxations either on its own initiative or upon application, provided reasons are formally recorded. The new fee structure will come into effect from FY 2026-27.

1.1.8.      IFSCA issues Consultation Paper on Draft Regulations prohibiting Market Abuse in IFSC Securities Markets

IFSCA has released a consultation paper seeking public comments on the proposed IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026, which are intended to establish a dedicated regulatory framework governing market conduct in securities markets operating within IFSCs. The proposed regulations aim to replace the continued applicability of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 in IFSCs with a new framework tailored for the IFSC ecosystem. The draft regulations seek to prohibit insider trading, market manipulation, fraudulent trading practices and other forms of market abuse in order to promote fair, efficient and transparent securities markets and strengthen investor protection. The IFSCA has invited public comments on the proposed regulations until March 27, 2026. 

1.1.9.      IFSCA issues Consultation Paper on proposed Regulatory Framework for Rights issues by Listed Entities in IFSCs

IFSCA has released a consultation paper seeking public comments on a proposed regulatory framework governing rights issues by listed entities on recognised stock exchanges in IFSCs. The proposed framework is intended to supplement the provisions of the IFSCA (Listing) Regulations, 2024 (“Listing Regulations”), which provide the overarching framework for issuance and listing of financial products in IFSCs and enable the IFSCA to prescribe detailed requirements for rights issues by listed entities. The consultation paper outlines the proposed regulatory structure for rights issues by issuers that have undertaken their primary issuance in the IFSC. The framework is intended to provide listed entities with a streamlined mechanism for raising capital through rights issues in IFSC securities markets. The IFSCA has invited public comments on the proposed framework until March 27, 2026.

1.1.10.   IFSCA issues Consultation Paper on the Regulatory Framework for Preferential Issues and Qualified Institutions Placements

IFSCA has released a consultation paper seeking public comments on a proposed regulatory framework governing preferential issues and qualified institutions placements by issuers listed on recognised stock exchanges in IFSCs. The proposed framework is intended to supplement the Listing Regulations, which provide the overarching regulatory framework for issuance and listing of financial products in IFSCs and enable the IFSCA to prescribe detailed norms for capital raising by listed entities. The framework is intended to facilitate capital raising by listed entities through a streamlined process while ensuring transparency, fair pricing and protection of shareholder interests. The IFSCA has invited public comments on the proposed framework until March 27, 2026.

Insurance Regulatory and Development Authority of India (IRDAI)

1.1.11.   IRDAI issues Exposure Draft proposing amendments to align Insurance Regulatory Framework with Ind AS

IRDAI has issued an exposure draft of the IRDAI (Actuarial, Finance and Investment Functions of Insurers) (Amendment) Regulations, 2026, proposing amendments to align the regulatory framework governing insurers with the adoption of Indian Accounting Standards (“Ind AS”). The proposal follows the notification of Ind AS 117 (Insurance Contracts) and Ind AS 109 (Financial Instruments) by the Ministry of Corporate Affairs and forms part of the transition towards financial reporting standards converged with International Financial Reporting Standards for the insurance sector. IRDAI has proposed implementation of Ind AS by all insurers with effect from April 1, 2026. In connection with the proposed transition, the IRDAI has released draft amendments, along with a consultation paper outlining the objectives of the transition, industry preparedness, policy considerations, proposed implementation approach, transitional arrangements and the amendments required to existing regulations. Stakeholders have been invited to submit comments on the proposed regulations and consultation paper by March 24, 2026.

Monetary Penalties

1.1.12.   RBI imposes penalties on two 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.	Maanaveeya Development & Finance Private Limited	INR 3,10,000/- (Indian Rupees Three Lakh and Ten Thousand only)	This penalty has been imposed for non-compliance with certain directions issued by RBI on 'Governance' in exercise of powers conferred on RBI under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934.
2.	Samruddhi Sahakari Bank Ltd., Nandgaon, Nashik, Maharashtra	INR 10,000 (Indian Rupees Ten Thousand only)	This penalty has been imposed for non-compliance with certain directions issued by RBI on ‘Submission of Data by Credit Institutions’ in exercise of powers conferred on RBI under the provisions of Section 25 of the Credit Information Companies (Regulation) Act, 2005.

2.              Key Asian Markets - Philippines and Indonesia

2.1.          Philippines

2.2.1.      Philippines inflation rises to 2.4 per cent in February

Year-on-year headline inflation rose to 2.4 per cent (two point four per cent) in February, up from 2.0 per cent (two point per cent) in January and within the 2.3–3.1 per cent (two point three per cent to three point one per cent) forecast range of the Bangko Sentral ng Pilipinas (“BSP”). Average inflation for the first two months of the year stood at 2.2 per cent (two point two per cent), remaining below the central bank’s full-year target of 3 per cent (three per cent) but within the tolerance band of ±1 per cent (one per cent) point.  Rice inflation continued to ease, although the pace of decline slowed as supply tightened during the lean season following import restrictions introduced in late 2025.

2.2.2.      Philippines Gross International Reserves reaches record high in February 2026

The Philippines’ Gross International Reserves (“GIR”) reached a record high of USD 112.7 Billion (United States Dollar One Hundred Twelve Billion Seven Hundred Million only) as of end-February 2026, according to preliminary data from the BSP. The latest reserve level provides a strong external liquidity buffer, equivalent to 7.5 (seven point five) months’ worth of imports of goods and payments of services and primary income, well above the conventional adequacy benchmark. It also represents about 4.2 (four point two) times the country’s short-term external debt based on residual maturity. GIR is composed of foreign-denominated securities, foreign exchange, gold, and other reserve assets, which collectively help cushion the economy against external shocks. These reserves support the country’s ability to finance imports, meet foreign debt obligations, and maintain currency stability during periods of external stress.

2.2.          Indonesia

2.2.3.      Indonesia reserve assets remain high in February 2026

Indonesia’s official reserve assets stood at USD 151.9 Billion (United States Dollars One Hundred Fifty‑One Billion Nine Hundred Million only) at the end of February 2026, down slightly from USD 154.6 Billion (United States Dollars One Hundred Fifty‑Four Billion Six Hundred Million only) in January but still at a strong level, according to Bank Indonesia (“BI”). The modest decline mainly reflected external debt repayments and the central bank’s efforts to stabilise the rupiah amid ongoing uncertainty in global financial markets, even as tax and services revenues and government foreign loan withdrawals provided support. At the end of the month, the reserve position was equivalent to 6.1 (six point one) months of imports, or 5.9 (five point nine) months of imports and government external debt servicing, comfortably above the international adequacy benchmark of around three months of imports. Bank Indonesia noted that the current level of reserves continues to provide a solid buffer for the external sector and helps safeguard macroeconomic and financial stability. Looking ahead, the central bank expects external resilience to remain supported by adequate reserves, continued foreign capital inflows, and positive investor sentiment toward Indonesia’s economic outlook.

2.2.4.      Fitch affirms Indonesia’s BBB rating but revises outlook to negative

Fitch Ratings has affirmed the Republic of Indonesia’s sovereign credit rating at BBB while revising the outlook to Negative on 4 March 2026, citing the country’s strong macroeconomic fundamentals and solid medium-term growth prospects alongside a relatively low government debt-to-GDP ratio and adequate external resilience. The outlook revision reflects Fitch’s concerns about rising policy uncertainty and the consistency of Indonesia’s policy framework. In response, the Governor emphasised that the decision highlights confidence in the country’s economic fundamentals, pointing to well-controlled inflation, a stable rupiah supported by exchange rate stabilisation policies, and a resilient financial system with ample liquidity and strong banking capital levels. Looking ahead, Bank Indonesia expects medium-term growth to remain solid, with 2026 GDP projected at 4.9–5.7 per cent (four point nine per cent to five point seven per cent) and inflation staying within target. External resilience is expected to remain strong, supported by a sound Balance of Payments and foreign exchange reserves of USD 154.6 Billion (United States Dollars One Hundred Fifty‑Four Billion Six Hundred Million only) at the end of January, equivalent to 6.3 (six point three) months of imports, well above international adequacy standards. The central bank will continue coordinating with the government and the Financial System Stability Committee to maintain macroeconomic and financial stability while supporting sustainable growth.

3.              Trends

3.1.          PhonePe and Razorpay among major Fintech IPOs expected in 2026 as pipeline gathers pace

India’s Fintech IPO Pipeline is gaining momentum, with Walmart-backed PhonePe preparing for public listing that could value the company between USD Nine billion and USD 10 Billion (United States Dollar Ten Billion only) and raise up to approximately USD 1 Billion (United States Dollar One Billion only) through the share sale; the company filed confidential IPO papers in 2025 and is targeting a listing in 2026 subject to market conditions. Payment’s infrastructure provider Razorpay has also initiated IPO groundwork, engaging investment banks for a potential fresh issue of around INR 4,500 Crores (Indian Rupees Four Thousand Five Hundred Crore only), while Mumbai-based digital lender OnEMI Technology Solutions (Kissht) has already filed its DRHP with SEBI for INR 1000 Crores (Indian Rupees One Thousand Crore only) issue. Investor appetite, however, remains cautious, with sustained geopolitical uncertainty, including Middle East tensions, flagged as a potential risk that could delay timelines or temper valuations for premium-priced new-age fintech listings

3.2.          KreditBee Eyes USD 120 Million Pre-IPO Fundraise at Unicorn Valuation

Fintech lending platform KreditBee is reportedly in discussions to secure approximately USD 120 Million (United States Dollar One Hundred and Twenty Million only) in a pre-IPO funding round, aiming for a "unicorn" valuation exceeding USD 1 Billion (United States Dollar One Billion only). The primary objective of this capital infusion is to strengthen the company’s balance sheet and scale its diverse lending portfolio ahead of a planned stock market debut in the next 12-18 months (twelve to eighteen months). While this is a commercial milestone, the company must ensure continued adherence to the RBI’s Digital Lending Guidelines and Fair Practices Code, specifically regarding capital adequacy and transparent disclosure of "all-in cost" of loans to maintain regulatory favour during the transition to a public entity.

4.              Sector Overview

4.1.         West Asia conflict and rising global yields stall India Inc's overseas fundraising plans

Escalating hostilities in West Asia and the consequent hardening of global yields have effectively paused near-term overseas fundraising by Indian corporates, with ten-year US benchmark bond yields climbing above 4 per cent (four per cent) rising approximately twenty basis points in a single week and spreads for top-rated Indian issuers widening by around ten basis points since the conflict intensified. The pressure is more acute for lower-rated issuers, where spreads have widened by up to twenty-five basis points, as global investors factor in India's vulnerability as a major oil importer with critical supply exposure through the Strait of Hormuz; Brent crude has risen close to 19 per cent (nineteen per cent) to approximately USD 83 (United States Dollar Eighty-Three only) per barrel as a result. Companies with active External Commercial Borrowing programmes, including Sammaan Capital, have confirmed a wait-and-watch approach, and the impact is visible in secondary markets, with spreads on Exim Bank's ten-year bonds widening from seventy-five to eighty-five basis points.

4.2.          Private banks cede ground to Non-Banking Financial Companies in consumer durable loans as strategies diverge

The Non-Banking Financial Companies (“NBFCs”) have been steadily capturing market share from private sector banks in consumer durable lending, with private banks' disbursements in the segment declining approximately 28 per cent (twenty-eight per cent) year-on-year while NBFCs recorded 15 per cent (fifteen per cent) growth over the same period, according to data from CRIF and JM Financial. The shift is driven by NBFCs' willingness to serve smaller-ticket borrowers, faster credit decisioning, and deeper relationships with retail and trade channels, advantages that private banks, which have been consciously recalibrating towards higher-ticket and credit card-based financing, are choosing not to compete on directly. Private banks have not entirely exited the space but have repositioned their consumer credit strategies, effectively ceding the mass-market, small-ticket segment to agile NBFCs, a structural realignment that is reshaping competitive dynamics across unsecured retail lending. Industry analysts expect NBFCs to consolidate this lead through Financial Year 2027 as rate cycle tailwinds further improve their cost of funds and enable more competitive product pricing.

5.              Business Updates

5.1.      Central Bank of India Gets Approval to Increase Stake in Generali Central Insurance Ventures

The Competition Commission of India (“CCI”) has officially cleared the Central Bank of India proposal to acquire additional stake in Generali Central Insurance Ventures. This transaction is a critical step in the bank’s strategy to strengthen its foothold in the life and non-life insurance segments through its existing joint venture.

5.2.          Moneyview files DRHP to raise INR 1,500 Crore via IPO

Fintech lending platform MoneyView has filed its Draft Red Herring Prospectus (“DRHP”) with SEBI to raise approximately INR 1,500 Crore (Indian Rupee One Thousand Five Hundred Crore only) through an initial public offering. The proposed issue reportedly comprises a fresh issue of equity shares and an offer-for-sale by existing shareholders, as the company seeks to leverage its robust digital-first credit model to scale operations. For compliance purposes, this transition to a public entity will require heightened adherence to SEBI (Issue of Capital and Disclosure Requirements) Regulations (“ICDR”) and consistent alignment with the RBI’s Digital Lending Guidelines, particularly regarding data privacy and the reporting of systemic credit risks.

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