1. Regulatory Updates
1.1. India
1.1.1 RBI issues master direction on Credit Information Reporting
The Reserve Bank of India (“RBI”) has released a new master direction consolidating guidelines for banks and financial institutions on reporting customer credit information. Credit Information Companies (CICs) shall now alert customers via Short Message Service (SMS) or email whenever their Credit Information Report (CIR) is accessed by specified users. Additionally, banks and Non-Banking Financial Companies (“NBFCs”) shall provide reasons for rejecting customer requests for data correction to ensure transparency. RBI
1.1.2. RBI issues master directions on non-resident investment in debt instruments
The RBI’s Monetary Policy Committee (“MPC”), decided to keep the policy repo rate unchanged at 6.50 per cent (six point five zero per cent). The Standing Deposit Facility (SDF) rate remains at 6.25 per cent (six point two five per cent), while the Marginal Standing Facility (MSF) rate and the bank rate stay at 6.75 per cent (six point seven five per cent). The MPC shifted its monetary policy stance to ‘neutral’ to focus on aligning inflation with the 4 per cent (four per cent) target, while continuing to support economic growth. RBI
1.1.3. RBI issues master directions on non-resident investment in debt instruments
The RBI has released master directions governing non-resident investments in Indian debt instruments consolidating the extant regulations, rules and circulars. Category-I banks have been instructed to communicate the details of the master direction to their constituents. These directions complement existing permissions under other laws while reinforcing RBI’s regulatory framework for foreign investments in India’s debt market. RBI
1.1.4. RBI lifts lending ban on Asirvad Micro Finance, DMI Finance
RBI has lifted loan sanctions for NBFCs Asirvad Micro Finance and DMI Finance removing certain restrictions on fresh sanctions of loans and disbursals. The sanctions were imposed in the month of October due to concerns over “usurious” pricing and high markups. Following this, corrective measures and compliance reports were submitted by the companies, the RBI cleared all four NBFCs that were previously barred from issuing loans, including Navi Finserv and Arohan Financial Services. RBI
1.1.5. RBI cancels CoR of 10 NBFCs over supervisory concerns
RBI has exercised its authority under Section 45-IA (6) of the Reserve Bank of India Act, 1934, to cancel the Certificates of Registration (CoR) of ten NBFCs. These companies, based in Kolkata, West Bengal, are no longer authorised to conduct business as NBFC. The cancellations, effective January 7, 2025, follow supervisory concerns. Some of the affected entities include Adhyay Equi Pref Pvt. Ltd., Agarani Credit & Finvest Pvt. Ltd., and Amit Goods & Suppliers Pvt. Ltd., among others. RBI
1.1.6. Monetary Penalties
RBI imposes monetary penalties on the following financial institutions:
| Name of the Financial Institution | Penalty Imposed | Reasons |
| RBI imposes monetary penalty on The Nasik Merchant’s Co-operative Bank Ltd., Nashik, Maharashtra | INR 15,00,000/- (Indian Rupees Fifteen Lakh only) | Contravention of/non-compliance with certain directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’. |
| RBI imposes monetary penalty on Janata Sahakari Bank Limited, Pune | INR 17,50,000/- (Indian Rupees Seventeen Lakh Fifty Thousand only) | Contravention of/non-non-compliance with certain directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’ and ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks’. |
| RBI imposes monetary penalty on Indian School Finance Company Pvt. Ltd., Telangana | INR 50,000/- (Indian Rupees Fifty Thousand only) | Contravention of/non-compliance with certain directions issued by RBI on ‘Managing Risks and Code of Conduct in Outsourcing of Financial Services by NBFCs’. |
| RBI imposes monetary penalty on The Sivakasi Co-operative Urban Bank Limited, Tamil Nadu | INR 50,000/- (Indian Rupees Fifty Thousand only) | Contravention of/non-compliance with certain directions issued by RBI on Know Your Customer (“KYC”). |
| RBI imposes monetary penalty on Batlagundu Co-operative Urban Bank Limited, Dindigul, Tamil Nadu | INR 50,000/- (Indian Rupees Fifty Thousand only) | Contravention of/non-compliance with certain directions issued by RBI on KYC. |
| RBI imposes monetary penalty on Belgaum District Revenue Employees’ Co-operative Bank Limited, Belgaum, Karnataka | INR 50,000/- (Indian Rupees Fifty Thousand only) | Contravention of/non-adherence with directions issued by RBI on KYC. |
1.2. Philippines
1.2.1. BSP explores subscription fee model for digital transactions
Bangko Sentral ng Pilipinas (“BSP”) is considering implementing a subscription fee structure for digital transactions to optimize network externalities in the payment system. BSP Governor Eli Remolona Jr. emphasized that relying on fixed subscription fees rather than per-transaction charges could enhance financial inclusion. The initiative aims to remove fees for person-to-person transfers and small business payments up to a threshold yet to be determined. BSP is in discussions with key digital payment platforms to develop an equitable framework while maintaining accessibility and affordability. Cebu Daily News
1.3. Sri Lanka
1.3.1. Sri Lanka to identify systemically important finance companies
Sri Lanka will identify systemically important finance companies in 2025 as part of its efforts to enhance financial regulation. The Central Bank of Sri Lanka (“CBSL”) Governor announced that stress testing frameworks for finance companies would be extended, and amendments would be made to the Finance Business Act and the Finance Leasing Act to improve regulatory oversight, risk management, and the stability of the Non-Banking Financial Institution (NBFI) sector. This follows a previous plan in 2020 that saw the merger of eight finance companies. Economy Next
2. Trends
2.1. Lenskart eyes USD 1 billion IPO by FY26 end
Omnichannel eyewear retailer Lenskart plans to raise USD 750 million to USD 1 billion (United States Dollar Seven Hundred Fifty Million to One Billion only) through its Initial Public Offering (IPO), targeting a valuation of USD 7-8 billion (United States Dollar Seven to Eight Billion only). In Financial Year (“FY”) 24, Lenskart narrowed its net loss to INR 10 crore (Indian Rupees Ten Crore only) and reported operating revenue of INR 5,427.7 crore (Indian Rupees Five Thousand Four Hundred Twenty-Seven Crore and Seventy Lakhs only). Inc42
3. Sector Overview
3.1. Bank credit to MSMEs accounts for 15 per cent of non food credit
In November 2024, scheduled commercial banks deployed INR 26.48 lakh crore (Indian Rupees Twenty-Six Lakh Four Hundred Eighty Thousand Crore only) in bank credit, with 15.5 per cent (fifteen point five per cent) allocated to the Micro, Small, and Medium Enterprises (“MSMEs”) sector, amounting to INR 20.92 lakh crore (Indian Rupees Twenty Lakh Ninety-Two Thousand Crore only). This was an 11.7 per cent (eleven point seven per cent) increase from INR 18.72 lakh crore (Indian Rupees Eighteen Lakh Seventy-Two Thousand Crore only) in the previous year. Finance Express
3.2. India’s GDP growth may dip to 6.4 per cent in FY25
India’s Gross Domestic Product (GDP) growth is projected to decelerate to 6.4 per cent (six point four per cent) in 2025, marking a four-year low, as per the National Statistics Office (NSO). The slowdown is attributed to weaker manufacturing and investment growth, high interest rates, and reduced fiscal stimulus. PIB
3.3. Indian lenders call for durable liquidity measures from RBI
Indian lenders have urged the RBI to address liquidity deficits with durable measures as economic growth slows. Suggestions include longer-term variable rate repos, FX swaps, and bond purchases, with calls for a temporary reduction in the cash reserve ratio to ease borrowing pressures. Persistent liquidity tightness, with deficits averaging INR 1.50 trillion (Indian Rupees One Trillion Fifty Billion only), has driven interbank rates above policy thresholds. Lenders also raised concerns about the rupee’s decline and unhedged exposures, emphasising the need for interventions to stabilize the financial system. Economy Times
4. Business Updates
4.1. Fintech Firm’s small biz loans grow by 69 per cent
Rajasthan saw a 69 per cent (sixty-nine per cent) growth in small business loans under INR 10,00,000/- (Indian Rupees Ten Lakh only) driven by fintech platforms, and which reached 53 per cent (Fifty-Three per cent) of the population. State’s lending to fintech firms helped to provide financial access to New to Credit (NTC) individuals and small businesses. Nationwide fintech facilitated INR 2,48,000 crore (Indian Rupees Two Lakh Forty-Eight Thousand Crore only) in personal loans and INR 28,607 crore (Indian Rupees Twenty-Eight Thousand Six Hundred Seven Crore Only) in business loans by March 2024. Times of India
4.2. NBFCs fundraising via ECB route reaches 5-year high
NBFCs raised INR 3.64 lakh crore (Indian Rupees Three Lakh Sixty-Four Thousand Crore only) through the external commercial borrowings (“ECB”) route in 2024, marking a five-year high. This spike follows the Reserve Bank of India’s November 2023 decision to increase risk weights on bank funding to NBFCs, pushing them to explore diversified funding sources. Despite a 2.93 per cent (two point nine three per cent) rupee depreciation in 2024, easing global monetary policies and interest rate arbitrage have made ECBs attractive. Key players like Shriram Finance and Muthoot Finance raised significant amounts through multi-currency and secured note issuances, reflecting a strategic shift in funding. Financial Express
4.3. Azhar Iqubal launches Fenado AI platform for no-code app and website development
Azhar Iqubal, cofounder of Inshorts, has launched Fenado AI, a no-code platform that allows users to create apps and websites without coding skills. The platform, co-founded with Manish Singh Bisht, former head of technology at Inshorts, is aimed at startups and small businesses seeking cost-effective tech solutions. Fenado AI simplifies digital tool creation through a chat based interface, already servingover 200 (two hundred) paying customers globally. Inc42
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.
