1. Regulatory Updates
1.1. India
1.1.1. RBI introduces Framework for AI enablement in the Financial Sector
The Reserve Bank of India (“RBI”) has constituted a Committee on the Framework for Responsible and Ethical Enablement of Artificial Intelligence in the financial sector, as announced in the December 6, 2024, Monetary Policy Statement. The committee, chaired by Dr. Professor Pushpak Bhattacharyya of the Indian Institute of Technology, Bombay, includes members from academia, government, law, and industry. The committee’s responsibilities include evaluating the adoption of Artificial Intelligence (“AI”) in financial services, reviewing global regulatory practices, identifying associated risks, and proposing frameworks for the ethical deployment of AI. RBI
1.1.2. Premature redemption under the Sovereign Gold Bond (SGB) Scheme
The premature redemption of Sovereign Gold Bonds (“SGB”) can be made after the fifth year of issuance, with redemption allowed on the interest payment date. For the SGB 2017-18 Series XIII (issued on December 26, 2017), the premature redemption date is December 26, 2024. The redemption price will be determined based on the simple average of the closing gold price of 999 (Nine Hundred Ninety-Nine) purity for the three business days prior to redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA). The redemption price for this tranche will be INR 7,573/- (Indian Rupees Seven Thousand Five Hundred and Seventy-Three only) per unit. RBI
1.1.3. Extension of Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 for Colour Merchants Co-operative Bank Ltd., Ahmedabad
The Reserve Bank of India (“RBI”) has extended the directive issued to Colour Merchants Co-operative Bank Ltd., Ahmedabad, under Section 35A of the Banking Regulation Act, 1949. Initially valid until December 25, 2024, the directive is extended for an additional three months, until March 25, 2025, in the public interest. An extension is issued in exercise of RBI’s powers under the Banking Regulation Act and is subject to review. All other terms and conditions of the directive remain unchanged. RBI
1.1.4. Unified Payments Interface (UPI) access for Prepaid Payment Instruments (PPIs) through third-party applications
PPI (Prepaid Payment Instrument) holders can only be onboarded for UPI by their respective PPI issuer, which is responsible for linking the customer’s wallet to the UPI handle issued. The PPI issuer, in its capacity as a Payment Service Provider (PSP), is not permitted to onboard customers from other banks or PPI issuers. In terms of UPI transactions, authentication is carried out using the existing wallet credentials, ensuring pre-approval before the transaction reaches the UPI system. Furthermore, PPI issuers can enable the discovery of their full-KYC PPIs on third-party UPI applications, facilitating the linking of the wallet to the UPI handle and authenticating transactions using UPI credentials. RBI
1.1.5. Monetary Penalties
RBI imposes monetary penalties on the following financial institutions:
| Name of the Financial Institution | Penalty Imposed | Reasons |
| Manappuram Finance Limited | INR 20,00,000/- (Indian Rupee Twenty Lakh only) | Non-compliance with the Know Your Customer (KYC) Directions, 2016. |
| IndusInd Bank Ltd | INR 27,30,000 lakh/- (Indian Rupees Twenty-Seven Lakh and Thirty Thousand only) | Non-compliance with the Interest Rate on Deposits Directions, 2016, issued by the Reserve Bank of India (“RBI”), on opening of savings deposit accounts for ineligible entities. |
| Shree Dhandhuka Janta Sahakari Bank Ltd. | INR 2,50,000 lakh/- (Indian Rupees Two Lakh Fifty Thousand only) | Non-compliance with the Reserve Bank of India (“RBI”) directions on ‘Investment by Primary Co-operative Banks’ and ‘Know Your Customer (KYC)’ |
| Chanasma Commercial Co-operative Bank Ltd., Chanasma, dist. Patan, Gujarat | INR 3,00,000/- (Indian Rupees Three Lakh only) | Non-compliance with certain directions issued by the Reserve Bank of India (“RBI”) on ‘Loans and Advances to Directors, Their Relatives, and Firms/Concerns in Which They Are Interested’ and ‘Know Your Customer (KYC)’. |
| The Thasra People’s Co-operative Bank Ltd., Thasra, dist. Kheda, Gujarat | INR 3,00,000/- (Indian Rupees Three Lakh only) | Non-compliance with certain directions issued by the Reserve Bank of India (“RBI”) on ‘Loans and Advances to Directors, Their Relatives, and Firms/Concerns in Which They Are Interested’ and ‘Management of Advances – UCBs’ |
| Shri Janata Sahakari Bank Ltd., Halol, Dist. Panchmahal, Gujarat | INR 2,00,000/- (Indian Rupees Two Lakh only) | Non-compliance with the Reserve Bank of India (“RBI”) regulations on ‘Loans and Advances to Directors, Their Relatives, and Firms/Concerns in Which They Are Interested’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. |
| Shree Laxmi Mahila Sahakari Bank Limited, Mehsana, Gujarat | INR 1,60,000/- (Indian Rupees One Lakh Sixty Thousand only) | Non-compliance with the Reserve Bank of India (“RBI”) regulations on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’, ‘Know Your Customer (KYC)’, and ‘Membership of Credit Information Companies (CICs)’ |
| Manjra Mahila Urban Co-operative Bank Limited, Bidar, Karnataka | INR 50,000/- (Indian Rupees Fifty Thousand only) | Non-compliance with the Reserve Bank of India (“RBI”)’s ‘Know Your Customer’ (KYC) guidelines |
| Sri Basaveshwara Pattana Sahakara Bank Niyamit, Sindgi, Karnataka | INR 100,000/- lakh (Indian Rupees One Lakh only) | Non-compliance with directions under the Reserve Bank of India (“RBI”)’s ‘Supervisory Action Framework (SAF)’. |
| Swami Vivekanand Sahakari Bank Niyamit, Nidagundi, Karnataka | INR 100,000/- (Indian Rupees One Lakh only) | Non-compliance with the Reserve Bank of India (“RBI”) directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Know Your Customer (KYC)’. |
| Bharat Co-operative Bank Ltd., Bengaluru | INR 3,00,000/- (Indian Rupees Three Lakh only) | Non-compliance with directions issued under the Reserve Bank of India (“RBI”)’s ‘Supervisory Action Framework (SAF)’. |
1.2. Bangladesh
1.2.1. Businesses face hurdles after EC cancels NID data deal
The Election Commission (“EC”) has revoked the Bangladesh Computer Council’s (“BCC”) access to the National Identification Database (NID), affecting businesses adversely dependent on third-party identity verification. The suspension of the Porichoy service by Digicon Global Services has hindered customer onboarding. This follows allegations of legal violations in a data-sharing agreement, with businesses urging a coordinated response to reduce disruptions. Concerns have also been raised over discrepancies in the revenue-sharing model between the BCC, EC, and Digicon. The Daily Star
1.3. Philippines
1.3.1. The Philippines’ External Debt Increases in Q3 2024, Remains Sustainable
The Philippines’ external debt reached USD 139.64 billion (United States Dollars One Hundred Thirty-Nine Billion and Six hundred Forty Million only) in Q3 2024, a 7.3 percent (seven point three percent) increase from June 2024. The debt-to-GDP ratio stands at 30.6 percent (thirty point six percent). This increase was driven by public and private sector borrowing, including USD 4.17 billion (United States Dollars Four Billion and One Hundred Seventy Million only) raised by the National Government. Long-term debt constitutes 79.4 percent (seventy-nine point four percent) of the total, with the public sector accounting for 62.2 percent (sixty-two point two percent). Major creditors include Japan, the Netherlands, and the UK, with US dollar-denominated debt making up 74.5 percent (seventy-four point five percent). Bangko Sentral Ng Pilipinas
2. Trends
2.1. AP Chambers urges RBI to include tourism in priority sector lending framework
The Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) has urged the Reserve Bank of India (RBI) to include tourism in the Priority Sector Lending (PSL) framework. In a formal representation to RBI Governor Sanjay Malhotra, AP Chambers highlighted tourism’s potential to drive economic growth, create jobs, and boost foreign exchange earnings. The sector, significantly impacted by the COVID-19 pandemic and global disruptions, requires strategic financial support to unlock its potential. AP Chambers emphasized that prioritizing tourism under PSL would foster inclusive development, support infrastructure, and align with India’s goal of becoming a USD 5 trillion (United States Dollars Five Trillion Dollars only) economy by 2025. New Indian Express
3. Sector Overview
3.1. IFC invests USD 75 mn in NDR InvIT’s sustainability-linked bonds
The International Finance Corporation (IFC) has invested USD 75 million (United States Dollars Seventy-Five Million only) in NDR InvIT’s sustainability-linked bonds, marking India’s first SLB by a warehousing InvIT. The funding will support the expansion of warehousing operations and enhance sustainability practices, including EDGE Certification. IFC will also assist in achieving ESG targets and promoting gender-inclusive work practices. NDR InvIT, with 16.99 million sq ft in assets (Sixteen Million Nine Hundred Thousand Square Feet), is India’s first perpetual warehousing InvIT listed on the NSE. Economic Times
4. Business Updates
4.1. Moneycontrol concludes India Fintech Conclave 2024 with key insights and vision for the future
Moneycontrol’s ‘India Fintech Conclave’ on December 18, 2024, gathered industry leaders to discuss India’s fintech growth. Ananth Narayan (SEBI) emphasized balancing market stability with growth. K. V. Kamath (Jio Financial Services) and Kunal Shah (CRED) highlighted fintech’s transformative role, while Ritesh Shukla (NPCI) discussed UPI’s global expansion. Parag Rao (HDFC Bank) noted fintech’s surge in financial inclusion, with investments reaching USD 31 billion. The conclave reaffirmed India’s fintech sector’s commitment to innovation and global competitiveness. Media Infoline
4.2. IndiQube Spaces files for IPO to raise Rs 850 crore
IndiQube Spaces Limited, a Bengaluru-based managed workplace solutions provider founded in 2015, has filed its draft red herring prospectus (DRHP) with SEBI for an initial public offering (IPO). The company plans to raise INR 750 crores (Indian Rupees Seven Hundred Fifty crores only) through a fresh issue of equity shares and INR 100 crores (Indian Rupees One Hundred Crores only) via an offer for sale by promoters Rishi Das and Meghna Agarwal. Backed by WestBridge Capital and Ashish Gupta, IndiQube offers tech-driven, sustainable office spaces. It also expanded its board with four independent directors. ICICI Securities and JM Financial are the book-running lead managers for the IPO, which will be listed on BSE and NSE. Business Today
4.3. SaaS Fintech Zaggle raises ₹595 crore via QIP
Zaggle Prepaid Ocean Services raised ₹595 crore through QIP and plans two acquisitions in the next 12 months, targeting merchant card software, accounts receivables, and FASTag solutions. The company aims for billion-dollar revenue in 5-6 years, with acquisitions expected to drive 70-75% growth. Institutions like BOI AXA MF and ICICI Prudential MF participated, with Bank of India ELSS tax saver acquiring a 16.8% stake. The Hindu
4.4. BillMart Fintech partners with EQARO to Boost Trade Finance with Credit Guarantee Solutions
BillMart Fintech has partnered with Eqaro Guarantees to integrate credit guarantee solutions into its platform, enhancing secure financing options for businesses. The collaboration aims to reduce lending risks and support MSMEs and corporates in managing financial needs. By leveraging AI-driven solutions, BillMart and Eqaro seek to address key financial challenges and promote growth in India’s evolving trade finance market. ANI News
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.
