1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI sets up working group for market timings review
RBI has established a working group to conduct a comprehensive review of trading and settlement timings across RBI-regulated markets. The committee is led by Shri Radha Shyam Ratho (Executive Director, RBI), the group comprises senior executives from major banks, industry associations, and financial institutions. It will assess current market hours, cross-country practices, and potential revisions to enhance liquidity, efficiency, and price transmission. The group will submit its report by April 30, 2025. RBI
1.1.2. RBI proposes AFA for cross-border CNP transactions
The RBI has released draft directions mandating the Additional Factor Of Authentication (“AFA”) for non-recurring cross-border Card Not Present (“CNP”) transactions. Card issuers must validate AFA when requested by overseas merchants or acquirers. This move aims to enhance payment security and reduce fraud in international digital transactions. Public comments on the draft directions are invited until March 10, 2025. RBI
1.1.3. RBI grants NDS-OM access to non-bank brokers
The RBI has revised access norms for the Negotiated Dealing System – Order Matching (NDS-OM) platform, now permitting Securities and Exchange Board of India (SEBI)-registered non-bank brokers to facilitate retail investor trades in Government securities. Effective immediately, the Master Direction – RBI (Access Criteria for NDS-OM) Directions, 2025 supersedes the 2024 guidelines. This move, part of the RBI’s developmental policies, aims to enhance market participation and liquidity. RBI
International Financial Services Centres Authority (IFSCA)
1.1.4. IFSCA issues notification on LES for bullion exchange
The International Financial Services Centres Authority (“IFSCA”) has released a notification permitting the bullion exchange in IFSC to introduce Liquidity Enhancement Schemes (“LES”) for illiquid commodity derivatives. These schemes require prior approval from the Governing Board and must adhere to principles of transparency, non-discrimination, and market integrity. Incentives under LES may include fee discounts, cash payments, or issuance of shares, provided they do not exceed 25 per cent (twenty-five per cent) of net profits, free reserves, or net worth as per audited financial statements. IFSCA
National Payment Corporation of India (NPCI)
1.1.5. NPCI issues guidelines on merchant acquiring in UPI by Co-operative banks
The National Payments Corporation of India (“NPCI”) has issued guidelines permitting Cooperative banks to act as Unified Payments Interface (“UPI”) merchant acquirers. Eligible banks must be direct UPI members and comply with the Reserve Bank Of India (“RBI”) and NPCI regulations for seamless participation in the digital payments ecosystem. Additionally, all UPI-related guidelines, circulars, and notifications will also apply. NPCI
Other Developments
1.1.6. MeitY expands Aadhaar authentication scope to allow access by private entities
The Ministry of Electronics and Information Technology (“MeitY”) has notified the Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Amendment Rules, 2025. The amendment expands Aadhaar authentication to non-government entities, enabling seamless access to services in e-commerce, tourism, healthcare, and more. A streamlined approval process has been introduced, with the Unique Identification Authority of India (UIDAI) reviewing applications before MeitY’s approval. The initiative aims to enhance transparency, innovation, and ease of living for residents. UIDAI
1.1.7. Monetary Penalties
RBI imposes monetary penalties on the following financial institutions:
| Name of the Financial Institution | Penalty Imposed | Reasons |
| Karur Vysya Bank Limited | INR 8,30,000/- (Indian Rupees Eight Lakh Thirty Thousand only) | Contravention of/non-compliance with certain directions issued by RBI on ‘Loan System for Delivery of Bank Credit’. |
| Federal Bank Limited | INR 27,30,000/- (Indian Rupees Twenty-Seven Lakh Thirty Thousand only) | Contravention of/non-compliance with certain directions issued by RBI on ‘Interest Rate on Deposits’. |
1.2. Bangladesh
1.2.1. BB enhances environmental and social risk management for bank
The Bangladesh Bank (“BB”) has issued an updated Environmental and Social Risk Management (ESRM) framework for banks and financial institutions. The revised Environmental and Social Due Diligence (ESDD) Risk Assessment Tool, first introduced in 2022, has been upgraded to align with global best practices, ensuring a more robust risk evaluation system. Issued under the Bank Companies Act, 1991 and Finance Company Act, 2023, the circular is effective immediately, reinforcing sustainable finance practices. BB
1.2.2. BB issues new guidelines for offshore banking
BB has issued new guidelines for offshore banking operations in the country. As per the guidelines, only licensed scheduled banks can conduct offshore banking through designated Offshore Banking Units (OBUs). Banks must notify BB within seven days of commencing operations. OBUs are permitted to transact in freely convertible currencies as per Article 18 of The Bangladesh Bank Order, 1972. BB
1.3. Philippines
1.3.1. Philippines showcases Islamic finance progress at Abu Dhabi Finance Week
The Bangko Sentral ng Pilipinas (“BSP”) highlighted the Philippines’ progress in Islamic finance at Abu Dhabi Finance Week. Assistant Governor Arifa A. Ala shared updates on the licensing of two new Islamic banking players and emphasised the impact of the 2019 Islamic Banking Law. Bangko Sentral Ng Pilipinas
1.3.2. BSP and Palawan Group expand Piso Caravan to improve financial accessibility
BSP partnered with the Palawan Group of Companies (“PGC”) to expand the Piso Caravan, improving the exchange of mutilated or unfit banknotes and coins. At a ceremony on February 4, 2025, PGC leaders pledged support for this initiative, part of the BSP’s Coin Recirculation Program. With 7,960 (seven thousand nine hundred sixty) locations nationwide, Palawan Group aims to enhance financial accessibility. Bangko Sentral Ng Pilipinas
1.3.3. BSP, DepEd, and BDO Foundation partner to enhance financial literacy for K-12 learners
BSP, Department of Education (“DepEd”), and Banco de Oro (“BDO”) Foundation signed a memorandum of agreement to enhance financial literacy among K-12 learners, teachers, and DepEd personnel. The agreement was held on January 8, 2025, at the DepEd Central Office, Pasig City. Bangko Sentral Ng Pilipinas
2. Trends
2.1. CRED to invest INR 550 Crore in NFPL
CRED is reportedly planning to invest INR 550 CRORE in its NBFC, Newtap Finance Private Limited (“NFPL”), to strengthen its lending business. As of December 2024, CRED’s Assets Under Management (AUM) stood at INR 19,000 crore (Indian Rupees Nineteen Thousand Crore only), with Non-Performing Assets (NPAs) rising to 1.1 per cent (one point one per cent), compared to 0.73 per cent (zero point seven three per cent) in FY24 and 0.59 per cent (zero point five nine per cent) in FY23. Startup News
2.2. DFS secretary states that tax changes to increase bank deposits by INR 40,000-45,000 crore
Department of Financial Services (DFS) Secretary Shri M. Nagaraju expects INR 40,000–45,000 crore (Indian Rupees Forty Thousand to Forty-Five Thousand Crore only) to flow into banks as Union Budget 2025 raises the income tax exemption limit to INR 12 lakh (Indian Rupees Twelve Lakh only) and increases the TDS threshold on fixed deposit interest. The threshold rises from INR 40,000 (Indian Rupees Forty Thousand only) to INR 50,000 (Indian Rupees Fifty Thousand only) for general citizens and to INR 1 lakh (Indian Rupees One Lakh only) for senior citizens from FY26. Mint
2.3. NBFC Aye Finance partners with Credgenics to offer AI-based collection solutions in future
Aye Finance, a leading Non-Banking Finance Company (“NBFC”) focused on providing business loans to Micro-Scale Enterprises, has partnered with Credgenics, an Artificial Intelligence (“AI”)-powered debt collections platform, to enhance its debt collection and resolution processes in future. CNBC TV18
2.4 Newtap Finance to raise INR 550 Crore in equity capital backed by CRED
Newtap Finance Pvt Ltd (“NFPL”), an NBFC backed by CRED, plans to raise INR 550 crore (Indian Rupees Five Hundred Fifty Crore only) in equity capital to expand. The rating agency, India Ratings and Research, gave NFPL an ‘IND BBB’ rating with a stable outlook, citing its technology-driven lending model and partnership with CRED. NFPL had assets under management of INR 1,141.60 crore (Indian Rupees One Thousand One Hundred Forty-One Crore Sixty Lakh only) at the end of December 2024, with an average loan interest rate of 18 per cent (eighteen per cent). Inc42
3. Sector Overview
3.1. RBI directs NBFCs to disclose maximum loan charges, per reports
RBI has directed large NBFCs to disclose the total charges applicable to loan products, including interest rates, processing fees, insurance, and other costs. Additionally, NBFCs must seek Board Approval for the maximum loan charges, ensuring enhanced transparency and fair lending practices. Business Standard
3.2. India reconsiders crypto stance amid global shifts
India is reviewing its cryptocurrency policy as global regulatory attitudes evolve. Shri Ajay Seth (Secretary, Department of Economic Affairs) stated that recent pro-crypto policy shifts, including those in the U.S. (United States), have prompted a reassessment of India’s approach. The review may delay the release of the long-awaited Cryptocurrency Discussion Paper, initially scheduled for September 2024. Business Standard
3.3. DFS secretary states that tax changes to increase bank deposits by INR 40,000-45,000 crore
Department of Financial Services (DFS) Secretary Shri M. Nagaraju expects INR 40,000–45,000 crore (Indian Rupees Forty Thousand to Forty-Five Thousand Crore only) to flow into banks as Union Budget 2025 raises the income tax exemption limit to INR 12 lakh (Indian Rupees Twelve Lakh only) and increases the TDS threshold on fixed deposit interest. The threshold rises from INR 40,000 (Indian Rupees Forty Thousand only) to INR 50,000 (Indian Rupees Fifty Thousand only) for general citizens and to INR 1 lakh (Indian Rupees One Lakh only) for senior citizens from FY26. Mint
3.4. Government to roll out revamped central KYC registry in 2025
The Union Government announced that the Central KYC Registry (CKYCR) will be revamped and rolled out in 2025, along with a streamlined system for periodic Know Your Customer (“KYC”) updates. The revamp aims to enhance security, improve efficiency, and simplify compliance for both financial institutions and customers. PIB
4. Business Updates
4.1. LTF launches AI-powered virtual home loan advisor, KAI
L&T Finance Limited (“LTF”), a leading NBFC, has introduced Knowledgeable AI (“KAI”), an AI-powered virtual home loan advisor, on its newly revamped corporate website. Initially unveiled at RAISE’ 24, KAI aims to simplify the home loan journey through real-time assistance, instant EMI calculations, and personalised loan estimates. Business Standard
4.2. Niyogin Fintech to restructure NBFC and iServeU as separate entities
Niyogin Fintech Ltd. announced a restructuring plan, demerging its NBFC arm and iServeU fintech subsidiary into independently listed entities. The NBFC will be under Niyogin Finserv Ltd, focusing on lending through fintech partnerships, while iServeU will adopt a Software as a Service (SaaS) model. Despite a subdued Quarter (Q3) due to tighter KYC regulations, Niyogin’s assets under management grew to INR 241.8 crore (Indian Rupees Two Hundred Forty-One Crore Eighty Lakh only). Your Story
4.3. PhonePe exits the account aggregator sector, returns the NBFC-AA licence to RBI
PhonePe group has decided to exit the Account Aggregator (“AA”) sector and will collaborate with other AAs to further promote financial inclusion. The company has begun the process of surrendering its NBFC-AA licence to the RBI and will gradually shut down its AA operations. PhonePe’s AA platform enabled users to securely share their financial data with regulated Financial Information Users (FIUs). The platform claims to have onboarded nearly 50 (fifty) million users in India but faced challenges in onboarding financial information providers (FIPs). Business Standard
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.
