Banking & Finance Digest September 21, 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
Reserve Bank of India
1.1.1. RBI cancels registration of eight NBFCs following voluntary surrender of CoR
The Reserve Bank of India ("RBI") has announced that eight Non-Banking Financial Companies ("NBFCs") have surrendered their Certificates of Registration ("CoR") and consequently exited the NBFC business. The cancellations were effected under the provisions of the Reserve Bank of India Act, 1934, following the entities’ decision to cease carrying on the business of a Non-Banking Financial Institution ("NBFI"). The action forms part of RBI’s ongoing regulatory oversight of the NBFC sector and ensures that entities no longer engaged in regulated financial activities are removed from the regulatory framework.
1.1.2. RBI cancels CoR of five NBFCs
RBI has cancelled the CoR of five NBFCs under Section 45-IA(6) of the Reserve Bank of India Act, 1934. The affected entities are Dar's Financial Services Pvt. Ltd., Rolta Holding and Finance Corporation Private Limited, Vasudeo Securities Pvt. Ltd., Parsoli Corporation Limited and A. C. Choksi Financial Services Pvt. Ltd. (now Deus Financial Capital Private Limited). Following cancellation of their CoRs, these entities are prohibited from carrying on the business of a NBFI as defined under the RBI Act, 1934.
Securities and Exchange Board of India (SEBI)
1.1.3. SEBI extends Samuhik Prativedan Manch to Clearing Corporation Members
The Securities and Exchange Board of India ("SEBI") has extended Samuhik Prativedan Manch, the technology-based common reporting platform, to members of Clearing Corporations (CCs) who are also stockbrokers. The platform, introduced in July 2025 for stockbrokers, enables submission of compliance reports through a single interface instead of multiple submissions to different exchanges and clearing corporations. Under the first phase, effective 30 September 2026, approximately 14 compliance reports, representing nearly 60 per cent (sixty per cent) of reporting requirements, will be routed through the common platform. The second phase, proposed from 31 December 2026, will cover the remaining reports and evaluate extension to Professional Clearing Members (PCMs). SEBI stated that the initiative is expected to reduce compliance costs and improve ease of doing business for approximately 1,066 clearing members with multiple exchange and clearing corporation memberships.
International Financial Services Centres Authority
1.1.4. IFSCA amends Fund Management Regulations Framework for IFSCs
The International Financial Services Centres Authority ("IFSCA") has notified amendments to the IFSCA (Fund Management) Regulations, 2025, with the objective of enhancing regulatory clarity, refining operational requirements and strengthening the fund management ecosystem in International Financial Services Centres ("IFSCs"). The amendments are aimed at facilitating ease of doing business, providing greater flexibility to Fund Management Entities (FMEs) and investment schemes, and aligning the regulatory framework with evolving market practices and industry requirements. The revised framework is expected to support the growth of fund management activities in IFSCs while maintaining robust governance, investor protection and regulatory oversight standards.
1.1.5. IFSCA amends Regulations on Manner of Payment and Receipt of Insurance Premium
IFSCA has notified the IFSCA (Manner of Payment and Receipt of Premium) (Amendment) Regulations, 2026, introducing changes to the framework governing payment and receipt of insurance premiums within IFSCs. The amendments are intended to enhance operational flexibility, provide greater regulatory clarity and align premium collection and payment processes with evolving market practices. The revised framework forms part of IFSCA’s continuing efforts to strengthen the ease of doing business, improve efficiency in insurance operations and support the growth of the insurance ecosystem in IFSCs.
1.1.6. IFSCA amends Master Circular for Distributors in IFSCs
IFSCA has amended the Master Circular for Distributors in IFSCs, introducing revisions aimed at strengthening the regulatory framework governing distribution activities. The amendments are intended to enhance regulatory clarity, streamline compliance requirements and align the distribution framework with evolving market practices and business needs within IFSCs. The revised framework forms part of IFSCA’s ongoing efforts to facilitate ease of doing business while maintaining robust governance, investor protection and regulatory oversight standards for distributors operating in IFSCs.
1.1.7. IFSCA notifies Electronic Trading Platforms Regulations, 2026
IFSCA has notified the IFSCA (Electronic Trading Platforms) Regulations, 2026, establishing a comprehensive regulatory framework for the authorisation, governance and operation of Electronic Trading Platforms (“ETPs”) in IFSCs. The Regulations prescribe requirements relating to registration, corporate governance, risk management, technology infrastructure, cybersecurity, business continuity, surveillance, audit and reporting obligations for ETP operators. The framework is intended to promote transparent, efficient and secure electronic trading of financial products while strengthening market integrity, investor protection and regulatory oversight within IFSCs.
Miscellaneous
Ministry of Finance
1.1.8. DFS issues FAQs on MDR Framework for select UPI merchant transactions
The Department of Financial Services ("DFS") has issued Frequently Asked Questions ("FAQs") clarifying the proposed Merchant Discount Rate ("MDR") framework for select Unified Payments Interface ("UPI") Person-to-Merchant ("P2M") transactions. Effective 15 October 2026, an MDR of 0.4 percent (zero point four per cent) will apply only to UPI P2M transactions above INR 2,000 (Indian Rupees Two Thousand only), subject to a cap of INR 300 (Indian Rupees Three Hundred only) per transaction for payments of INR 75,000 (Indian Rupees Seventy-Five Thousand only) and above. Consumers and Person-to-Person (P2P) transactions will continue to remain free of charge, while small merchants under the Person-to-Person-Merchant (P2PM) category, receiving up to INR 100,000 (Indian Rupees One Lakh only) per month through UPI, will continue to enjoy zero MDR. The FAQs also clarify concessional flat MDR of INR 5 (Indian Rupees Five only) per transaction for specified sectors such as insurance, telecom, fuel and railways, and an MDR of 0.02 per cent (zero point zero two per cent) for capital market transactions, including mutual funds and securities. The measure is intended to support long-term sustainability, innovation, cybersecurity and infrastructure development within the UPI ecosystem while preserving affordability and financial inclusion.
National Payments Corporation of India (NPCI)
1.1.9. NPCI issues Consolidated Circular for Unified Payments Interface (UPI)
The National Payments Corporation of India ("NPCI") has issued the UPI Consolidated Circular, Version 1.0, consolidating all Unified Payments Interface ("UPI") operating circulars issued up to 31 July 2026 into a single comprehensive framework applicable to banks, Payment Service Providers ("PSPs"), UPI Application Providers and other ecosystem participants. The circular codifies governance, operational, security, dispute resolution, settlement and compliance requirements across the UPI ecosystem and formalises rules relating to UPI Number, UPI Circle, UPI Lite, UPI International, UPI AutoPay, UPI Reserve Pay, biometric authentication, Credit Line on UPI, RuPay Credit Card on UPI, e-RUPI, Central Bank Digital Currency (CBDC) integration and interoperable cash deposit and withdrawal services. Key provisions include mandatory support for both mobile number-based and non-mobile number-based UPI IDs, enhanced safeguards for UPI Number onboarding and inactivity, interoperability requirements for all UPI-enabled services, annual CERT-In audit requirements for PSPs and Prepaid Payment Instrument ("PPI") issuers, strengthened data privacy controls, standardised merchant onboarding and verified merchant frameworks, and the implementation of AI-powered grievance redressal through UPI HELP and the Unified Dispute and Issue Resolution (UDIR) mechanism. The circular also formally withdraws a large number of legacy UPI operating circulars and establishes a unified compliance framework for the entire UPI ecosystem.
Court Updates
1.1.10. The Hon’ble Delhi High Court refers PayU–visa interchange fee dispute to RBI-Led Mediation
The Delhi High Court, in a dispute between PayU Payments Private Limited and Yes Bank Limited & others, has referred issues relating to Interchange Reimbursement Fee (IRF) claims and alleged Merchant Category Code (MCC) misclassification to a mediation process to be facilitated by the RBI. PayU challenged deductions aggregating INR 688,188,850 (Indian Rupees Sixty-Eight Crore Eighty-One Lakh Eighty-Eight Thousand Eight Hundred Fifty only) from settlement amounts and questioned the validity of Visa’s private IRF compliance mechanism under Section 24 of the Payment and Settlement Systems Act, 2007 (PSS Act). Pending mediation, the Court directed the parties to maintain status quo, restrained further deductions, debits or netting relating to past IRF claims, and directed that no final IRF determinations be issued in respect of the disputed claims. The Court clarified that the RBI’s role would be limited to mediation and facilitating a practical resolution without affecting the parties’ substantive legal rights or future transactions in the ordinary course of business.
1.1.11. The Hon’ble Supreme Court of India upholds SARFAESI proceedings despite prior DRT decree
The Supreme Court of India, in K.K. Praveen v. J.M. Financial Asset Reconstruction Company Pvt. Ltd. & Ors., dismissed a writ petition challenging recovery actions initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act"). The petitioner had contended that, once a decree had been passed by the Debt Recovery Tribunal ("DRT"), the original cause of action merged with the decree and no further proceedings could be initiated under the SARFAESI Act. Rejecting the contention, the Supreme Court relied on Section 35 of the SARFAESI Act, which grants overriding effect to the Act over inconsistent provisions contained in any other law. The Court held that SARFAESI proceedings could continue notwithstanding the existence of a prior DRT decree and dismissed the petition along with all pending applications.
Telecom Regulatory Authority of India
1.1.12. TRAI notifies Third Amendment Regulations to Strengthen Anti-Spam Framework
The Telecom Regulatory Authority of India ("TRAI") has notified the Telecom Commercial Communications Customer Preference (Third Amendment) Regulations, 2026, strengthening the framework for curbing Unsolicited Commercial Communications ("UCC") through technology-driven enforcement and enhanced consumer safeguards. The amendments mandate Telecom Service Providers ("TSPs") to use Artificial Intelligence and Machine Learning ("AI/ML")-based systems for identifying suspected spam senders and sharing information across operators. Action may be initiated where multiple Calling Line Identifiers ("CLIs") are flagged within a ten-day period, including Know Your Customer ("KYC") re-verification, physical verification and disconnection of telecom resources in cases of repeated misuse.
2. Key Asian Markets – Sri-Lanka & Bangladesh
2.1. Sri-Lanka
2.1.1. CBSL reports expansion in manufacturing and services activity in August 2026
The Central Bank of Sri Lanka (“CBSL”) has reported continued expansion in both manufacturing and services activity during August 2026, based on the Sri Lanka Purchasing Managers’ Index (PMI) survey. The PMI for Manufacturing stood at 53.0 (fifty-three point zero), indicating continued growth, although at a slower pace than the previous month, supported by increases in employment and stock of purchases despite moderation in production. Meanwhile, the PMI for Services rose to 65.6 (sixty-five point six) from 61.4 (sixty-one point four) in July 2026, reflecting accelerated growth in business activity driven by transportation, wholesale and retail trade, professional services, and financial services. CBSL noted that business expectations for the coming quarter remain positive, supported by anticipated economic improvements and tourism growth, although global economic uncertainties continue to pose downside risks.
2.2. Bangladesh
2.2.1. BB welcomes Moody’s upgrade of Bangladesh’s Sovereign Rating Outlook to Stable
Bangladesh Bank (“BB”) has welcomed the decision of Moody’s Ratings to upgrade Bangladesh’s sovereign credit rating outlook from “Negative” to “Stable”. The rating agency cited improvements in external sector resilience, stronger foreign exchange reserves, political and policy stability, ongoing banking sector reforms and positive long-term economic growth prospects. Foreign exchange reserves increased to approximately USD 32.9 billion by mid-2026 from USD 21.4 billion at the end of 2024, supported by record remittance inflows, improvements in the banking channel and enhanced exchange-rate flexibility. Moody’s also recognised reforms aimed at strengthening the banking sector, including asset quality reviews, proposed distressed asset management measures and initiatives to improve financial stability. Bangladesh Bank stated that the revised outlook reflects growing international confidence in Bangladesh’s macroeconomic stability and reform agenda and is expected to support investor confidence and sovereign creditworthiness.
3. Trends
3.1. RBI reports 8.2 Per cent growth in software services exports during 2025-26
RBI has released the results of its annual survey on computer software and Information Technology Enabled Services (ITES) exports, reporting that India’s software services exports increased by 8.2 per cent (eight-point two per cent) year-on-year to USD 221.4 billion during 2025-26. Computer services continued to account for more than two-thirds of total software exports, while Business Process Outsourcing (BPO) services remained the largest component of ITES exports. The United States of America remained the largest export destination with a 54.1 per cent (fifty-four point one per cent) share, followed by Europe at 31.8 percent (thirty-one point eight per cent). Software exports were predominantly delivered through the off-site mode, accounting for 91.7 per cent (ninety-one point seven per cent) of total exports. Including services delivered through overseas commercial presence, India’s total software services exports rose by 9.5 per cent (nine point five per cent) to USD 239.3 billion in 2025-26.
3.2. UPI MDR may support wider adoption of Digital Rupee for targeted use cases
The introduction of MDR on select UPI P2M transactions is expected to provide a potential boost to the adoption of the RBI’s Central Bank Digital Currency ("CBDC"), or e-Rupee, particularly for specialised and programmable payment use cases. From 15 October 2026, an MDR of 0.4 per cent (zero point four per cent) will apply to specified UPI P2M transactions above INR 2,000 (Indian Rupees Two Thousand only), subject to a cap of INR 300 (Indian Rupees Three Hundred only) per transaction. However, over 95 per cent (ninety-five per cent) of UPI P2M transactions will remain unaffected, limiting the immediate impact on payment behaviour. The report notes that the stronger opportunity for CBDC lies in programmable applications such as Direct Benefit Transfers (DBTs), where digital rupee-based subsidies are already being deployed in selected regions. RBI is expected to continue expanding CBDC pilots across government benefit schemes and retail payment use cases, leveraging programmability, traceability and targeted fund utilisation features.
4. Sector Overview
4.1. Indian Start-up ecosystem attracts funding across AI, DeepTech, Mobility and Consumer Sectors
Indian start-ups continued to attract investor interest during the week ended 20 September 2026, with funding activity spanning Artificial Intelligence (“AI”), semiconductors, aerospace, mobility, consumer brands and healthcare. Notable transactions included VerifAIX, which raised USD 5 million in a seed round for AI-driven semiconductor verification solutions; Disha (formerly Curelink), which secured INR 44 crore (Indian Rupees Forty-Four Crore only) in a Series A round for its AI-powered health coaching platform; DheyaTech, which raised INR 43 crore (Indian Rupees Forty-Three Crore only) to develop advanced small gas turbine engines; Carrum Mobility, which attracted additional growth capital for its fleet management business; Firi, which secured USD 3 million for its beauty-focused quick commerce platform; Enlight Metals, which raised USD 1.5 million for its AI-enabled metal procurement platform; and TRUE ARTIS, which secured INR 11.4 crore (Indian Rupees Eleven Crore Forty Lakh only) to expand its technology-enabled aesthetic surgery platform. The funding activity reflects sustained investor appetite for AI, deep technology, healthcare, consumer commerce and advanced manufacturing ventures.
5. Business Updates
5.1. India’s Bank of Maharashtra raises USD 500 Million in Debut Dollar Debt
Bank of Maharashtra has successfully raised USD 500 million (United States Dollar Five Hundred Million only) through its inaugural five-year U.S. dollar-denominated bond issuance, reflecting robust investor demand that enabled the bank to tighten pricing from its initial guidance. The bonds were issued with a coupon of 6.1120 per cent (six point one one two zero per cent) and priced at a spread of 130 basis points (one hundred and thirty basis points) over U.S. Treasury yields, representing a reduction of 25 basis points (twenty-five basis points) from the initial guidance of 155 basis points (one hundred and fifty-five basis points). The proceeds will be utilised to meet funding requirements at the bank's India head office and overseas branches, as well as for general corporate purposes.
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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