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1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI updates master direction on Risk Management and Inter-Bank Dealings
The Reserve Bank of India (“RBI”) has amended the Master Direction – Risk Management and Inter-Bank Dealings to update provisions for Standalone Primary Dealers (“SPD”) and improve reporting standards for Over the Counter (OTC) foreign exchange derivative contracts. Key updates include aligning SPD provisions with the Foreign Exchange Management Act, 1999 and revising definitions and reporting requirements to enhance transparency. The amendments aim to clarify terminology, streamline compliance, and strengthen regulatory oversight across authorised dealer categories. RBI
1.1.2. RBI issues master direction on Deposits and Accounts (April 2025)
RBI has issued the Master Direction on Deposits and Accounts dated April 16, 2025. Instructions issued on the maintenance of deposits and accounts have been compiled in this Master Direction under the Foreign Exchange Management Act, 1999. The present amendment in this Master Direction is aimed at consolidating the directions pertaining to Vostro accounts of non-resident banks. RBI
1.1.3. RBI maintains status quo on CCyB activation
RBI has decided not to activate the Counter-Cyclical Capital Buffer (“CCyB”) at present, following a review of key indicators, including the credit-to-Gross Domestic Product (“GDP”) gap. As per the February 5, 2015, guidelines, CCyB activation is contingent on evolving financial conditions and would be pre-announced when warranted. The RBI noted that current empirical analysis does not necessitate activation at this time. RBI
1.1.4. RBI releases ECB/FCCB/RDB data for February 2025
RBI has published data on External Commercial Borrowings (“ECB”), Foreign Currency Convertible Bonds (“FCCB”), and Rupee Denominated Bonds (“RDB”) for February 2025, covering both the automatic and approval routes. The disclosure provides insights into India’s foreign borrowing trends and the composition of cross-border debt instruments utilised during the month. RBI
1.1.5. RBI launches 110th round of IOS
RBI has initiated the 110th (one hundred ten) round of the Industrial Outlook Survey (“IOS”) for Q1:2025–26 (April–June 2025) to gauge business sentiments in the manufacturing sector. Conducted by Genesis Management & Market Research Pvt. Ltd., the survey captures qualitative feedback on demand, finance, employment, and price outlook for Q1 and expectations for Q2, Q3, and Q4 of FY 2025–26. Manufacturers may participate by submitting the questionnaire available on the RBI website. RBI
International Financial Services Centres Authority (IFSCA)
1.1.6. IFSCA expands trusteeship services under the ancillary services framework
The International Financial Services Centres Authority (“IFSCA”) has amended clause 4.3 of the IFSCA (Ancillary Services) Framework, 2021, expanding the scope of “Trusteeship Services”. Entities may now provide services related to Alternative Investment Funds (AIFs), Investment Trusts, Family Investment Funds (FIFs), Security Trusts, and act as escrow agents. Additionally, trusteeship services may be extended to retail schemes by Fund Management Entities (FMEs) registered under the IFSCA (Fund Management) Regulations, 2025, subject to compliance. IFSCA
1.1.7. IFSCA notifies KYC registration agency regulations, 2025
IFSCA has notified the IFSCA (KYC Registration Agency) Regulations, 2025, effective April 16, 2025, to govern Key Registration Agencies (“KRAs”) in the International Financial Services Centre (“IFSC”). The Regulations, issued under the IFSCA Act, 2019, stipulate that applicants must be incorporated in an IFSC and maintain a minimum net worth of USD 1 Million (United States Dollar One Million only). The framework outlines key definitions, scope of application, control norms, and regulatory expectations for KRAs, strengthening identity verification infrastructure within India’s international financial ecosystem. IFSCA
1.1.8. IFSCA notifies Capital Market Intermediaries Regulations, 2025
IFSCA has issued the IFSCA (Capital Market Intermediaries) Regulations, 2025 to regulate entities operating within India’s IFSCs. Effective upon Gazette publication, the Regulations provide for the registration, supervision, and conduct of broker-dealers, clearing members, custodians, credit rating agencies, and debenture trustees. They prescribe perpetual validity of registration, subject to suspension or cancellation, and mandate adherence to a code of conduct, cybersecurity norms, risk management, and compliance audits. Net worth requirements and compliance obligations are detailed in the Schedules, ensuring market integrity and investor protection. IFSCA
1.1.9. Monetary Penalties
RBI imposes monetary penalties on the following financial institutions:
| Name of the Financial Institution | Penalty Imposed | Reasons |
| RBI imposes monetary penalty on Kotak Mahindra Bank Limited | INR 61,40,000 (Indian Rupees Sixty-One Lakhs Forty Thousand only) | Contravention/ non-compliance with the RBI directions on ‘Guidelines on Loan System for Delivery of Bank Credit’ and ‘Loans and Advances – Statutory and Other Restrictions’, thereby contravening provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. |
| RBI imposes monetary penalty on IDFC First Bank Limited | INR 38,60,000 (Indian Rupees Thirty-Eight Lakhs Sixty Thousand only) | Contravention/ non-compliance with RBI directions on ‘Know Your Customer (KYC)’, thereby contravening provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. |
| RBI imposes monetary penalty on Punjab National Bank | INR 29,60,000 (Indian Rupees Twenty-Nine Lakhs Sixty Thousand only) | Contravention/ non-compliance with RBI directions on ‘Customer Service in Banks’, thereby contravening provisions of Section 47A (1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. |
1.2. Vietnam
1.2.1. Apple Pay expands to NAPAS domestic cards in Vietnam
Apple Pay now supports National Payment Corporation of Vietnam (“NAPAS”) domestic cards, enabling secure, convenient contactless payments in stores, apps, and online. Customers authenticate with Face ID, Touch ID, or a passcode, eliminating the need for Personal Identification Number (PINs) or One Time Password (OTPs). Apple Pay protects card information with encryption and Secure Element storage. SBV
1.2.2. SBV initiates a plan to streamline administrative procedures in 2025
The State Bank of Vietnam (“SBV”) Governor approved a plan to simplify administrative processes for businesses, aiming to eliminate at least 30 per cent (thirty per cent) of unnecessary investment conditions, reduce processing time and compliance costs by 30 per cent (thirty per cent), and ensure 100 per cent (one hundred per cent) online administrative transactions. The plan also focuses on decentralisation and efficiency in intra-government procedures. SBV
1.3 Philippines
1.3.1. Parañaque launches Paleng-QR Ph Plus for cashless payments
Parañaque City launched the Paleng-QR Ph Plus program to promote digital payments in public markets, transport, and businesses. Led by city officials and Bangko Sentral ng Pilipinas (“BSP”), the initiative aims to onboard vendors and transport operators into the formal financial system. Bangko Sentral ng Pilipinas
1.3.2. OFs remittances continue steady growth in early 2025
Overseas Filipinos (“OFs”) recorded a 2.6 per cent (two point six per cent) increase in personal remittances to USD 3.02 Billion (United States Dollar Three Billion Twenty Million only) in February 2025 compared to USD 2.95 Billion (United States Dollar Two Billion Nine Hundred Fifty Million only) in February 2024, driven by both land-based and sea-based workers. Bangko Sentral ng Pilipinas
1.3.3. Borongan city leads region VIII in launching Paleng-QR Ph Plus Program
Borongan City, the first in Eastern Samar and Region VIII, introduced the Paleng-QR Ph Plus program on 19 March 2025 at the city transport terminal. The launch, led by Borongan 1st Councillor Victor Franco and BSP Tacloban Area Director Victorio-III M. Tingcang, promotes QR Ph adoption in markets, transportation, and businesses. Bangko Sentral ng Pilipinas
1.3.4. BSP and IFC partner to expand movable finance market for MSMEs
BSP and International Finance Corporation (“IFC”) have partnered to boost the movable finance market, enhancing credit access for Micro, Small and Medium Enterprises (“MSMEs”) and the agricultural sector. The initiative, based on Movable Asset Finance (MAF), enables loans secured by assets like equipment and receivables, aiding those without real property for collateral. Bangko Sentral ng Pilipinas
2. Trends
2.1. NPCI eyes 300 million new UPI users with inclusive initiatives
The National Payments Corporation of India (“NPCI”) is planning to add 300 (three hundred) million new users to the Unified Payment Interface (“UPI”) ecosystem. Initiatives include delegated accounts for children and household staff, as well as enhanced multilingual and conversational features to boost accessibility. Bloomberg
2.2. NPCI plans “UPI META” feature to enable saving UPI handles on merchant platforms
The National Payments Corporation of India (“NPCI”) is exploring a new feature, “UPI Meta”, to allow customers to save their preferred UPI IDs on merchant websites or apps, similar to card tokenisation. This initiative aims to streamline digital payments but awaits RBI approval. INC42
3. Sector Overview
3.1. Embedded lending, the future of seamless credit in India
Embedded finance is revolutionising how Indians borrow money by seamlessly integrating financial services like loans, payments, and insurance into everyday digital platforms. Users access pre-approved credit options at the point of need, powered by real-time data, AI, and APIs. This approach enhances accessibility, serves underserved segments, and personalises lending. DqIndia
3.2. Varthana raises INR 75 Crore to expand education loans
Education-focused Non-Banking Finance Company (NBFC) Varthana raised INR 75 Crore (Indian Rupees Seventy-Five Crore only) in debt funding, led by OfBusiness and Oxyzo, to enhance its loan offerings for private schools and students. With a 48 per cent (forty-eight per cent) Year-on-Year (YoY) loan book growth to INR 1,896 Crore (Indian Rupees One Thousand Eight Hundred Ninety-Six Crore only) in FY25, the Bengaluru-based company plans to expand by 50 per cent (fifty per cent) by 2026. INC42
3.3. IndiaAI mission to pause new proposals for indigenous AI Models after April 22
The Government of India (“GOI”) will stop accepting fresh applications to build foundational Artificial Intelligence (“AI”) models post April 22, 2025, under the IndiaAI Mission. This extension of the Phase 3 deadline (initially April 15) follows an influx of proposals, 197 (one hundred ninety-seven) total across three phases. The Mission received 67 (sixty-seven) applications in Phase 1 and 120 (one hundred twenty) in Phase 2, spanning large language models and small language models. INC42
3.4. Centre plans USD 4 Billion DLI scheme to boost domestic electronics design
GOI is reportedly planning a USD 4 Billion (United States Dollar Four Billion only) Design-Linked Incentive (“DLI”) scheme to strengthen India’s electronics ecosystem. The scheme will support companies across 30 (thirty) semiconductor and 30 (thirty) electronics product categories, including modems, Wireless Fidelity (WiFi) chips, Near Field Communication (NFC) chips, 5G receivers, and power electronics for Electric Vehicles (EVs). Incentives will be linked to capital expenditure and turnover, aiming to push domestic value addition to 60 per cent (sixty per cent). Communications Today
3.5. UNCTAD projects India to lead global growth in 2025 with 6.5 per cent rate
The United Nations Conference on Trade and Development (“UNCTAD”) forecasts that India will remain the fastest-growing major economy in 2025 with a 6.5 per cent (six point five per cent) growth rate, driven by higher government expenditure and monetary policy stimulus. AIR
3.6. Moody’s cuts India’s 2025 GDP forecast to 5.5–6.5 per cent due to trade turmoil
Moody’s Ratings has revised its 2025 GDP growth projection for India to a range of 5.5–6.5 per cent (five point five to six point five per cent), down from its earlier forecast of 6.6 per cent (six point six per cent). Business Standard
3.7. RBI cancels Certificate of Registration of 11 NBFCs
RBI has cancelled the Certificate of Registration of the following 11 NBFCs under Section 45-IA(6) of the Reserve Bank of India Act, 1934: (i) The following businesses exited from NBFC business: Ekagrata Finance Private Limited, Ezcred Private Limited, Lamina Leasing and Finance Limited, Hinduja Finance Limited, Whitegold Holdings Private Limited, Trident Microfin Private Limited, Digikredit Finance Private Limited, Rutgers Investment and Trading Company Private Limited. (ii) The following businesses ceased to be legal entities due to merger/dissolution: Joindre Finance Private Limited, Jasol Investment & Trading Co Pvt Ltd, S. M. Management Private Limited. RBI
3.8. No GST on UPI transactions above INR 2,000
The Ministry of Finance has clarified that claims regarding the levy of Goods and Services Tax (“GST”) on UPI transactions exceeding INR 2,000 (Indian Rupees Two Thousand only) are entirely false and baseless. No such proposal is under Government consideration. Since January 2020, no Merchant Discount Rate (MDR) has been charged on P2M UPI transactions, eliminating any GST applicability. The Government’s UPI Incentive Scheme, active since FY 2021–22, continues to promote low-value P2M digital payments, with allocations increasing from INR 1,389 Crore (Indian Rupees One Thousand Three Hundred Eighty-Nine Crore only) in FY21–22 to INR 3,631 Crore in FY23–24. PIB
3.9. Indian startups raise USD 3.1 Billion in Q1 2025 as fintech leads
Indian startups secured USD 3.1 billion (United States Dollar Three Billion One Hundred Million only) in Q1 2025, consistent with Q4 2024 figures. The fintech sector led with six funds worth USD 1.18 Billion (United States Dollar One Billion One Eighty Million only), alongside USD 739 Million (United States Dollar Seven Hundred Thirty Nine Million only) raised across 33 deals. Debt funding saw increased activity, led by Stride Ventures and Alteria Capital, backing 27 (twenty seven) and 26 (twenty six) startups, respectively. TECHINASIA
4. Business Updates
4.1. PhonePe retains market leadership
UPI recorded 18.30 (eighteen point three zero) billion transactions in March 2025, reflecting a 13.6 per cent (thirteen point six per cent) increase from February. PhonePe led the market with 864.7 (eight hundred sixty-four point seven) crore transactions, despite a 0.28 per cent (zero point two eight per cent) dip in market share. It processed INR 12.57 Lakh Crore (Indian Rupees Twelve Lakh Fifty-Seven Thousand Crore only) in value, accounting for 50.74 per cent (fifty point seven four per cent) of the total UPI value. Outlook Business
4.2. NPCI reviews UPI outages with banks and TPAPs
NPCI convened a meeting on April 15, 2025, with major banks and Third Party Application Providers (“TPAPs”) to address repeated UPI outages—four in the past three weeks. While two incidents stemmed from banking system overload, the others, including a March 26 glitch, were caused by NPCI infrastructure upgrades, as per internal Root Cause Analysis. NPCI has urged ecosystem participants to exercise caution in public disclosures and is exploring fallback mechanisms to avoid future disruptions. UPI handles over 550 (five hundred fifty) million daily transactions, stressing both NPCI switches and bank core systems. Moneycontrol
4.3. Lack of API throttling caused the April 12 UPI downtime
NPCI experienced a significant UPI outage on April 12, 2025, due to the absence of a transaction status check limiter in its system architecture. As per NPCI norms, banks are allowed to make only three transaction success checks, with a 90 (ninety) second interval between each. However, continuous and excessive Application Programming Interfaces (“APIs”) calls by banks overwhelmed the system, resulting in a five-hour disruption—the longest in over three years. TOI
4.4. UPI faced 282 minutes of downtime since 2022 despite 99 per cent uptime
UPI experienced 282 (two hundred eighty-two) minutes of outage across two major incidents—in January 2022 (one hundred eighty-seven minutes) and March 2025 (ninety-five minutes), per updated data from the NPCI. While NPCI attributed the recent April 12, 2025, failure to intermittent technical issues, it reaffirmed that monthly uptime consistently exceeds 99 per cent (ninety-nine per cent), highlighting the system’s resilience. Business Standard
4.5. Zaggle secures TPAP approval and has entered into the UPI ecosystem
Zaggle has received approval from the NPCI to operate as a TPAP, enabling it to offer UPI services directly to over 3 (three) million users across its digital platform. The TPAP licence allows Zaggle to integrate UPI payments with its multi-wallet prepaid cards and offer embedded financial services such as credit lines, loans, mutual funds, utility bill payments, and healthcare wallets. INC42
4.6. PhonePe converts into a public limited company ahead of the proposed IPO
PhonePe Limited (formerly PhonePe Private Limited) has officially transitioned into a public entity, a key procedural step towards its anticipated Initial Public Offering (“IPO”). PhonePe is among the several fintech startups lined up for IPO this year. While Razorpay converted into a public entity yesterday, Pine Labs also recently got the NPCI’s nod to ‘reverse flip’ to India for its IPO. The Economics Times
4.7. PB Pay receives RBI approval to operate as a payment aggregator
RBI has granted in-principle authorisation to PB Pay Private Limited, a wholly owned subsidiary of PB Fintech, to function as an online Payment Aggregator under the Payment and Settlement Systems Act, 2007. Incorporated in April 2024, PB Pay was established following board approval in March 2024 to undertake domestic and/or cross-border payment aggregation services, both offline and online. The authorisation marks a key regulatory milestone in PB Fintech’s digital payments strategy. Business Standard
4.8. Banking Laws (Amendment) Act, 2025 notified
The Banking Laws (Amendment) Act, 2025 has amended five statutes, including the Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949. Key changes include: (i) redefining ‘fortnight’ for uniform reporting; (ii) allowing certain cooperative bank directors dual board positions; (iii) raising ‘substantial interest’ thresholds to INR 2 crore (Indian National Rupees Two Crore only); and (iv) permitting up to four simultaneous or successive nominees for deposits, safe custody, and lockers. Banks must now report as of the last day of a calendar fortnight, instead of alternate Fridays. The reporting window has also been shortened from seven to five days. The special return required on the last Friday of the month has been removed. AK & Partners
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.
