1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI issues draft Master Direction on Business Authorisation for Co-operative Banks, 2025
The Reserve Bank of India (“RBI”) has released the draft Master Direction on Business Authorisation for Co-operative Banks (Directions), 2025. This draft is applicable to all co-operative banks, including Primary (Urban) Co-operative Banks (UCBs), State Co-operative Banks (StCBs), and District Central Co-operative Banks (DCCBs), it mandates board-approved policies for expansion, robust internal controls, and cyber security, stipulating reporting and compliance via RBI’s Central Information System for Banking Infrastructure (CISBI) and PRAVAAH portals and sets explicit procedures for shifting, closure, or renaming of business locations.
1.1.2. RBI disclosure on sectoral deployment of bank credit – June 2025
RBI has released data on sectoral deployment of bank credit for June 2025, covering 41 (forty-one) select scheduled commercial banks (“SCBs”) representing about 95 per cent (ninety-five per cent) of non-food credit. Non-food credit grew by 10.2 per cent (ten point two per cent) year-on-year as of June 27, 2025. Credit to agriculture and allied activities rose 6.8 per cent (six point eight per cent), industry credit grew 5.5 per cent (five point five per cent) with steady expansion in micro, small, and medium enterprises, while services sector credit moderated to 9.6 per cent (nine point six per cent), partly due to slower lending to Non-Banking Financial Company (“NBFCs”).
1.1.3. RBI has released the lending and deposit rates of Scheduled Commercial Banks
RBI has released data on lending and deposit rates of SCBs (excluding regional rural banks and small finance banks) for July 2025. The Weighted Average Lending Rate (WALR) on fresh rupee loans declined to 8.62 per cent (eight point six two per cent) in June 2025 from 9.2 per cent (nine point two per cent) in May 2025, while the WALR on outstanding rupee loans fell to 9.48 per cent (nine point four eight per cent) from 9.69 per cent (nine point six nine per cent) over the same period. The 1 (one) year median Marginal Cost of Funds based Lending Rate (MCLR) moderated to 8.75 per cent (eight point seven five per cent) in July 2025 from 8.9 per cent (eight point nine per cent) in June 2025. On the deposit side, the Weighted Average Domestic Term deposit rate (WADTDR) on fresh rupee term deposits stood at 5.75 per cent (five point seven five per cent) in June 2025, and on outstanding rupee term deposits, it was 6.99 per cent (six point nine nine per cent) in June 2025.
1.1.4. RBI issues Reserve Bank of India (Investment in AIF) Directions, 2025
RBI has issued the Reserve Bank of India (Investment in AIF) Direction 2025, effective from January 01, 2026, applicable to investment by Regulated Entities (“REs”) in Alternative Investment Funds (“AIFs”) including commercial banks, primary, state co-operative banks, all-India financial institutions, and NBFCs. It limits any single RE investment in an AIF to 10 per cent (ten per cent) of its corpus, and collective RE investments to 20 per cent (twenty per cent). If an RE invests over 5 per cent (five per cent) in an AIF with downstream non-equity exposure to debtor companies linked to the RE, it must make 100 per cent (hundred per cent) provision for its exposure, up to its direct loan or investment level.
The Securities and Exchange Board of India (SEBI)
1.1.5. SEBI releases consultation paper on amendment to the definition of Strategic Investor for REITs and InvITs
The Securities Exchange Board of India (“SEBI”) has released a consultation paper proposing amendments to the definition of “Strategic Investor” under the SEBI (Real Estate Investment Trusts) Regulations, 2014 and the SEBI (Infrastructure Investment Trusts) Regulations, 2014. The amendment aims to widen the range of eligible strategic investors by including all entities recognised as Qualified Institutional Buyers (“QIBs”) under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Additionally, the proposed changes specifically exclude Foreign Portfolio Investors (FPIs) who are individuals, corporate bodies, or family offices from being classified as strategic investors, maintaining alignment with the QIB definition. Public comments on these proposals are invited until August 22, 2025.
1.1.6. SEBI revises norms for appointment of an independent third-party reviewers / certifiers of green debt Security
SEBI has introduced revised norms mandating issuers of green debt securities to appoint independent third-party reviewers or certifiers both before and after bond issuance to enhance transparency and credibility within India’s sustainable finance framework. The third-party reviewer is required to evaluate and certify the issuer’s green framework before issuance, ensuring project selection and evaluation align with international standards to prevent greenwashing. Post-issuance, the reviewer must audit the management and allocation of proceeds, verify fund utilisation, and validate environmental impact reporting.
1.1.7. SEBI modifies conditions for reduction in denomination of debt securities and NCRPS
SEBI has released a draft circular proposing modifications to the conditions for the reduction in denomination of debt securities and Non-Convertible Redeemable Preference Shares (“NCRPS”). The objective is to make the corporate bond market more accessible, especially to non-institutional investors, by allowing smaller investment sizes, thereby enhancing liquidity and investor participation. The draft changes aim to relax or revise certain eligibility thresholds and operational conditions associated with the issuance and trading of such securities in smaller denominations. Public comments are invited by August 21, 2025.
1.1.8. SEBI issues mechanism for monitoring minimum investment threshold under Specialised Investment Funds
SEBI has issued a circular dated July 29, 2025, on a monitoring mechanism to ensure compliance with the minimum investment threshold of INR 10 Lakh (Indian Rupees Ten Lakh only) per investor across all investment strategies of Specialised Investment Funds (“SIFs”). If holdings fall below this threshold due to redemption, transfer, or sale, all SIF units are frozen for debit transactions, and the investor is given 30 (thirty) calendar days to restore compliance. If not rebalanced in time, the Asset Management Company (AMC) will auto-redeem frozen units at the applicable Net Asset Value after 30 (thirty) days.
1.1.9. SEBI extends implementation timeline for circular on safer retail participation in algorithmic trading
The SEBI has extended the implementation deadline for its February 04, 2025, circular on “Safer participation of retail investors in Algorithmic trading” from August 01, 2025, to October 01, 2025. This extension follows requests from stockbrokers and investment service providers, aiming to ensure a smooth and disruption-free transition. Stock exchanges have been directed to inform their members, set up necessary compliance systems, and amend relevant regulations to implement the circular effectively. The move is intended to protect investor interests and promote orderly market regulation
1.1.10. SEBI issues circular on operational efficiency in monitoring NRI position limits in exchange traded derivatives
On July 29, 2025, SEBI issued a circular to enhance operational efficiency in monitoring the position limits of Non-Resident Indians (“NRIs”) in exchange-traded derivatives contracts. The circular removes the mandatory requirement for NRIs to notify Clearing Members and for Exchanges to assign Custodial Participant (“CP”) Codes for exchange-traded derivatives. NRIs without CP Codes will have their position limits monitored like client-level limits by Exchanges and Clearing Corporations.
International Financial Services Centres Authority (IFSCA)
1.1.11. IFSCA has issued circular on framework for Transition Bonds
The International Financial Services Centres Authority (“IFSCA”) issued a circular on July 29, 2025, establishing the “Framework for Transition Bonds” under the IFSCA (Listing) Regulations, 2024. This framework aims to facilitate financing for “hard-to-abate” sectors critical to India’s net-zero ambitions, such as steel, cement, aviation, and shipping, which require a phased transition toward decarbonisation. It provides clear criteria, including eligibility based on recognised international and Indian taxonomies (ASEAN, EU, Climate Bonds Initiative, etc.), the need for a credible, science-based entity-level transition plan consistent with Paris Agreement goals.
1.1.12. IFSCA releases report on ILS and ART Arrangements
The IFSCA through its press release dated July 30, 2025, released a report of working group to study on Alternate Risk Transfer (“ART”) arrangements. The report addresses Insurance Linked Securities (“ILS”) as key ART solutions allowing insurers and reinsurers to transfer catastrophe and other insurance risks to capital markets via securitisation. It applies to (re)insurers, investors, and regulators involved in setting up Special Purpose Insurers (SPIs) under IFSCA’s purview, GIFT IFSC. The framework requires full collateralisation of risks, compliance with regulatory, disclosure, and tax provisions, and targets qualified institutional investors.
1.1.13. IFSCA releases report on expert committee on position GIFT IFSC as global commodity trading hub
The IFSCA through its press release dated August 01, 2025, released a report on expert committee on position GIFT IFSC as global commodity trading hub. The report presents a comprehensive roadmap for transforming India’s GIFT International Financial Services Centre (IFSC) into a leading global hub for commodity trading. The Committee recommends a broad definition of commodities, regulatory changes to enable trading (including merchanting and derivatives), tax incentives, infrastructure upgrades, and workforce development, alongside regulatory clarity and robust risk management. It proposes adopting international best practices, promoting warehousing and risk management solutions, leveraging technology, and amending restrictive policies to attract global traders and financial institutions.
1.1.14. IFSCA issues key requirements and processes under the TechFin and Ancillary Services Regulations, 2025
The IFSCA Common Application Form (‘CAF”) serves as the foundation for entities seeking registration under the IFSCA (TechFin and Ancillary Services) Regulations, 2025, for operations in GIFT IFSC. The regulation applies to all applicants seeking registration to set up an IFSC Unit in GIFT IFSC under IFSCA (TechFin and Ancillary Services) Regulations, 2025. Applicants must submit detailed corporate, management, financial and compliance information, including declarations on fit and proper criteria for key personnel. The form mandates disclosure of business plans, risk management, AML/CFT measures, and internal audit arrangements.
Miscellaneous
Ministry of Finance
1.1.15. Banking Laws (Amendment) Act 2025 to come into effect from August 01, 2025
The Central Government has notified that key provisions of the Banking Laws (Amendment) Act, 2025, will come into force from August 01, 2025. This Act, notified on April 15, 2025, amends 19 provisions across five legislations – Reserve Bank of India Act, 1934; Banking Regulation Act, 1949; State Bank of India Act, 1955; and Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. The amendments aim to strengthen governance standards in the banking sector, enhance depositor and investor protection, improve audit quality in public sector banks, and extend the tenure of directors (except chairperson and whole-time directors) in cooperative banks.
1.1.16. Launch of new digital credit assessment model for MSMEs
The New Digital Credit Assessment Model for MSMEs, announced in the Union Budget 2024-25 and launched by the Union Finance Minister dated March 06, 2025, enables Public Sector Banks (“PSBs”) to develop in-house digital capabilities for MSME credit assessment, moving away from reliance on external assessments. It leverages digitally fetched and verifiable data such as PAN authentication through National Securities Depository Limited (“NSDL”), mobile/email OTP verification, API access to GST data, bank statement analysis via account aggregators, ITR uploads, credit bureau fetches, and fraud checks. The model automates loan appraisal using objective decision-making and model-based limit assessments for both Existing to Bank (ETB) and New to Bank (NTB) MSME borrowers.
Ministry of Corporate Affairs
1.1.17. Mandatory filing of form IEPF-1A by August 30, 2025
The Investor Education and Protection Fund Authority (“IEPFA”) has mandated companies to file Form IEPF-1A with the prescribed excel template by August 30, 2025, to comply with Rule 5(4A) of the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016. Over 3,000 (three thousand) companies have yet to comply, and failure to do so by the deadline will invite regulatory action.
Insurance Regulatory Authority and Development Authority of India (IRDAI)
1.1.18. IRDAI issues amendments to Revised Guidelines on Insurance Repositories and Electronic Issuance of Insurance Policies
The Insurance Regulatory and Development Authority of India (“IRDAI”) has amended Clause 15(a) of its “Revised Guidelines on Insurance Repositories and Electronic Issuance of Insurance Policies”. The amendment requires insurance repositories to conduct an annual review of their controls, systems, procedures, and safeguards by an external auditor at their own cost. The auditor must be a Certified Information System Auditor (CISA), a Chartered Accountant with Diploma in Information System Audit (ICAI) qualification, or a CERT-IN certified expert. This regulation aims to ensure stricter compliance and security within insurance repositories and is effective immediately.
Monetary Penalties
1.1.19. RBI imposes penalties on two banks for regulatory non-compliance
RBI imposes monetary penalties on the following institutions:
| Name of the Financial Institution | Amount of Penalty Imposed | Reasons |
| Batlagundu Co-operative Urban Bank Limited, Tamil Nadu | INR 1 Lakh (Indian Rupees One Lakh only) | The bank sanctioned loans without complying with the norm that loans should be linked to shares when the Capital to Risk-weighted Assets Ratio (“CRAR”) was below the regulatory minimum. Additionally, the bank sanctioned fresh loans that carried risk weights exceeding 100 per cent (hundred per cent), and it breached the limits prescribed for single borrower exposures in certain cases. |
| Smriti Nagrik Sahakari Bank Maryadit, Mandsaur, Madhya Pradesh | INR 2.50 Lakh (Indian Rupees Two Lakh Fifty Thousand only) | The bank failed to implement the prescribed cybersecurity controls as mandated in the comprehensive cybersecurity framework for urban cooperative banks. It also did not carry out periodic updates of Know Your Customer (“KYC”) details for certain customers as required by regulatory guidelines. |
2. Key Asian Markets- Philippines and Vietnam
2.1. Philippines
2.2.1. BSP projects July 2025 inflation to range between 0.5 per cent and 1.3 per cent
The Bangko Sentral ng Pilipinas (“BSP”) forecasted that inflation for July 2025 would settle within the 0.5 per cent (point five per cent) to 1.3 per cent (one point three per cent) range, reflecting a slowdown compared to previous months. Upward price pressures during the month are expected due to higher meat and vegetable prices caused partly by unfavourable weather, increased electricity rates, elevated domestic fuel costs, and peso depreciation. These pressures may be partly offset by a continued decline in rice prices, supported by government interventions. Looking ahead, the BSP will continue to closely monitor inflation and growth developments, adhering to its data-dependent approach for monetary policy decisions. This projection indicates a benign inflation outlook, which may allow the central bank to maintain accommodative policies.
2.2.2. Philippine other financial corporations’ domestic assets and liabilities grow significantly in quarter one in 2025
The domestic assets of other financial corporations (OFCs) in the Philippines reached P 10.6 Trillion (Philippine Pesos Ten Trillion Six Hundred Billion only) at the end of quarter one of 2025, representing a 4.9 per cent (four point nine per cent) increase from the previous quarter and a 14.6 per cent (fourteen point six per cent) rise over the previous year. The sector’s liabilities totalled P 11.2 Trillion (Philippine Pesos Eleven Trillion Two Hundred Billion only).
2.3. Vietnam
2.3.1. State Bank of Vietnam announces upward revision of 2025 credit growth quotas and monetary policy measures
On July 31, 2025, the State Bank of Vietnam (“SBV”) announced a proactive upward adjustment to the credit growth quotas for 2025 across credit institutions, aiming to boost national economic growth. As of July 28, 2025, system-wide credit had already increased by 9.64 per cent (nine point six four per cent) compared to the end of 2024, surpassing previous years’ growth. The new credit allocations are based on each lender’s performance and compliance, with SBV targeting total credit growth of about 16 per cent (sixteen per cent) for the year to help achieve at least 8 per cent (eight per cent) GDP growth.
2.3.2. Amendments to debt rescheduling and risk provisions for Vietnam Airlines
On July 11, 2025, SBV issued Circular No. 16/2025/TT-NHNN, which amends and supplements certain provisions of the earlier Circular No. 04/2021/TT-NHNN dated April 5, 2021 concerning refinancing and debt relief measures for credit institutions that have lent to Vietnam Airlines JSC. The new circular updates guidelines for rescheduling debt payments, maintaining existing debt classifications, and setting risk provisions for these loans, taking into account the ongoing effects of the COVID-19 pandemic on the airline. It also addresses changes in organisational responsibilities within the SBV, clarifies and abolishes certain previous provisions, and lays out arrangements for implementation. The circular came into effect from the date of its issuance.
3. Trends
3.2. Key upcoming IPOs to watch in August 2025 in India
August 2025 is set to witness a busy initial public offering (“IPO”) calendar with several noteworthy IPOs expected to launch. Some prominent upcoming IPOs include SME segment offerings like Jyoti Global Plast, BLT Logistics, Aaradhya Disposal Industries, Essex Marine, Parth Electricals and Engineering, and Bhadora Industries opening between August 04 to 06. On the mainboard, notable IPOs include Highway Infrastructure and Knowledge Realty Trust slated for August 05 to 07. Major companies like Tata Capital, Hero Fincorp, PhonePe, LG Electronics, BMW Ventures, CarDekho, Meesho, Cult.fit, JSW Cement, Milky Mist, Pine Labs, Shadowfax, Zetwerk, PayU, Urban Company, Flipkart, and others have announced plans to launch IPOs later in the year with dates yet to be announced.
3.3. Kotak Mahindra bank expects stabilisation in microfinance sector amid rising vehicle credit risks
Kotak Mahindra Bank expects its microfinance (MFI) portfolio to stabilise and start recovering in the second half of fiscal year 2026 after credit costs peaked in quarter one of financial year 2026. The bank has selectively resumed disbursements in microfinance while closely monitoring rising stress in its retail commercial vehicle (CV) loans, which are tied to broader economic slowdowns.
4. Sector Overview
4.2. UPI users to face new guidelines starting August 01, 2025
Starting August 01, 2025, new Unified Payments Interface (UPI) guidelines by National Payments Corporation of India (NPCI) will limit daily balance checks to 50 (fifty) times per app and linked bank account views to 25 (twenty-five) times per app. AutoPay recurring payments will only process during fixed time slots to reduce server load. Failed transaction status checks are capped at three attempts per day with 90 (ninety) seconds gap. Recipient names will be displayed before payment confirmation to prevent fraud.
4.3. Historic low savings deposit rates at PSBs
Savings deposit rates at some PSBs are at a historic low since their deregulation in 2011, according to the Reserve Bank of India’s July 2025 bulletin. The RBI bulletin highlights that the average domestic term deposit rates for fresh deposits have declined sharply for both PSBs and private sector banks. This drop is linked to policy repo rate cuts, a 100 (one hundred) basis point reduction since February 2025, which led banks to decrease lending rates and adjust deposit rates downward. The decline in lending rates has been more pronounced for PSBs compared to private banks.
4.4. Trump signs new order on tariffs – India and its neighbouring countries
United States President Donald Trump has signed a new executive order imposing revised tariffs for 70 (seventy) countries, including India and its neighbours, in a move expected to intensify global trade tensions. The new tariffs set India’s rate at 25 per cent (twenty-five per cent), Pakistan at 19 per cent (nineteen per cent), Bangladesh and Sri Lanka at 20 per cent (twenty per cent), Afghanistan and Japan at 15 per cent (fifteen per cent), and Myanmar at 40 per cent (forty per cent). These duties, effective from 12:01 a.m. EDT on August 07, 2025, aim to address a declared national emergency and replace previous rates for the affected countries. Goods already en route to the US before August 07 and arriving by October 05, 2025, are exempt from the revised tariffs and will be charged under the earlier rates.
4.5. Indian Rupee remains weak amid RBI dollar purchases and external pressures
The Indian rupee remains weak despite a global dollar slide due to the RBIs ongoing dollar buying to manage reserves and forward obligations. Subdued capital inflows and a weak balance of payments offer little support for appreciation. Geopolitical tensions and crude oil price volatility drive import bills higher and pressure the rupee. Limited policy space means the RBI prioritises liquidity management over rupee support.
5. Business Updates
5.2. NSDL to increase tech investment beyond INR 100 Crore in financial year 26 with automation in focus ahead of IPO
National Securities Depository Limited (NSDL), India’s largest securities depository, has secured board approval to increase its technology investment beyond INR 100 Crore (Indian Rupees One Hundred Crore only) for financial year 2026, with a primary focus on automation, enhanced cybersecurity, and capacity building. The tech roadmap includes four strategic pillars: operational automation, expanding capacity, strengthening resilience and cybersecurity, and improving customer experience at the depository participant level. NSDL, set to launch INR 4,011.6 Crore (Indian Rupees Four Thousand Eleven Crore Sixty Lakh only) Initial Public Offering (IPO) via offer-for-sale.
5.3. Ambani faces LOC in ED’s INR 17,000 crore loan fraud probe
The Enforcement Directorate (“ED”) has issued a Look Out Circular (“LOC”) against industrialist Anil Ambani in connection with an alleged INR 17,000 Crore (Indian Rupees Seventeen Thousand Crore only) loan fraud case involving the Reliance Group. The ED has summoned him for questioning on August 5 under the Prevention of Money Laundering Act (PMLA).
5.4. PSBs allowed to transfer unclaimed amounts to IEPF
Effective from August 01, 2025, recent amendments to the Banking Laws (Amendment) Act, 2025, empower PSBs to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (“IEPF”), aligning PSBs with provisions that already apply to companies under the Companies Act. This regulatory change brings transparency and uniformity in handling of unclaimed financial assets, helping centralise and track such funds more effectively. In addition to this, the amendments also raise the threshold of ‘substantial interest’ in companies from INR 5 Lakh (Indian Rupees Five Lakh only) to INR 2 Crore (Indian Rupees Two Crore only), and extend the maximum tenure for directors (other than chairpersons and whole-time directors) in cooperative banks from 8 (eight) – 10 (ten) years, in line with the 97th (ninety-seventh) constitutional amendment.
5.5. India surpasses 65,000 crore digital transactions worth over INR 12,000 Lakh Crore in last six financial year
Over 65,000 (sixty-five thousand) crore digital transactions have taken place in India from financial year 2020 to 2025, amounting to more than INR 12,000 Lakh Crore (Indian Rupees Twelve Thousand Lakh Crore only) in value. This surge highlights the rapid expansion and nationwide adoption of digital payment systems, supported by collaborative efforts among the Government, National Payments Corporation of India (NPCI), banks, and fintechs. As of May 31, 2025, more than 4 (four) crore digital touch points have been established to enable cashless transactions, enhancing financial inclusion across both urban and rural regions.
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.
