1. Regulatory Updates
1.1. India
Reserve Bank of India (RBI)
1.1.1. RBI issues notification on implementation of Unlawful Activities (Prevention) Act, updates
The Reserve Bank of India (“RBI”) issued a notification dated August 25, 2025, directing all Regulated Entities (“REs”) to comply with Section 51A of the Unlawful Activities (Prevention) Act, 1967, regarding updates to the United Nations Security Council’s 1267/1989 ISIL (Da’esh) & Al-Qaida Sanctions List. The updated list includes detailed profiles of individuals with terrorist links and instructions for REs to ensure they do not maintain accounts for these listed entities. The circular emphasises adherence to the RBI Master Direction on Know Your Customer (KYC) and UAPA guidelines. It also directs any de-listing requests to be forwarded to the Ministry of Home Affairs and provides information about the United Nations Ombudsperson for delisting applications. REs are urged to follow these updates meticulously and refer to the UNSC for detailed lists and reasons for the sanctions.
Securities and Exchange Board of India (SEBI)
1.1.2. SEBI issues circular on relaxation in the timeline to submit the net worth certificate by the Stockbroker
The Securities Exchange Board of India (“SEBI”) has issued a circular on August 26, 2025, relaxing the timeline for stockbrokers to submit their net worth certificates to stock exchanges for offering margin trading facilities to clients. The new timelines align with financial result declarations, requiring submissions by May 31 for the March-end half-year and November 15 for the September-end half-year. The circular mandates exchanges to update their rules.
1.1.3. SEBI issues circular on extension of timelines and update of reporting authority for investment advisors and others on digital accessibility compliance
SEBI has issued a circular on August 29, 2025, granting extensions of timelines and updating the reporting authority for Investment Advisors (“IAs”) and Research Analysts (“RAs”) concerning compliance with the Digital Accessibility Circular issued on July 31, 2025, related to the Rights of Persons with Disabilities Act, 2016. Key extensions include additional time for submission of compliance reports, lists of digital platforms, appointment of certified accessibility auditors, accessibility audits, remediation of findings, and annual audit reporting, with new deadlines ranging up to July 31, 2026, and audit reporting extended to April 30, 2027.
1.1.4. SEBI issues circular on technical clarifications to Cybersecurity and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities
SEBI issued a circular on August 28, 2025, providing technical clarifications and updates to the Cybersecurity and Cyber Resilience Framework (CSCRF) for SEBI-regulated entities (“REs”). It clarifies principles for entities regulated by multiple regulators, including the Principles of Exclusivity and Equivalence. It offers detailed technical guidance on critical systems, zero-trust security, incident reporting, and cyber audit submissions. The circular also revises categorisation thresholds for Portfolio Managers and Merchant Bankers and mandates adherence to the Indian Computer Emergency Response Team (CERT-In’s) Cyber Security Audit Policy Guidelines. Stock exchanges, depositories, and BSE Limited are directed to amend their byelaws and inform their members accordingly.
International Financial Services Centres Authority (IFSCA)
1.1.5. IFSCA releases consultation paper on proposed IFSCA (Performance Review Committee) (Amendment) Regulations 2025
The International Financial Services Centres Authority (“IFSCA”) has released a consultation paper seeking public comments on proposed amendments to the IFSCA (Performance Review Committee) Regulations, 2022. Key provisions include increasing the minimum number of members, setting eligibility limits such as age and conflict of interest restrictions, allowing members to resign with notice, and introducing a detailed code of conduct emphasising integrity, confidentiality, and conflict of interest disclosure—suggestions to be submitted by September 17, 2025.
1.1.6. IFSCA issues press release on enablers for trade finance in IFSC
IFSCA has issued a press release dated August 29, 2025, detailing the key enablers for trade finance within International Financial Services Centres (“IFSCs”) in India. The release highlights the significant role of trade finance, which supports about 80 per cent (eighty per cent) of global trade and faces a widening global gap. It describes initiatives in GIFT IFSC, including establishing IFSC Banking Units (IBUs) by Indian and foreign banks, which provide trade credit, factoring, forfaiting, and risk management services.
Miscellaneous
Ministry of Corporate Affairs (MCA)
1.1.7. MCA issues corrigendum to RFP for Third-Party Evaluation of Corporate Data Management Scheme
The Ministry of Corporate Affairs (“MCA”) has issued a corrigendum dated August 27, 2025, extending the last date to submit queries or requests for clarification and registration for the pre-bid meeting related to the request for proposal (“RFP”) for the Third-Party Evaluation of the Corporate Data Management Scheme. The new deadline for submissions is extended to August 28, 2025. The pre-bid meeting is rescheduled to be held on September 01, 2025.
National Payments Corporation of India (NPCI)
1.1.8. NPCI issues circular on implementation of higher per-transaction limit for specific categories in UPI
Unified Payments Interface (“UPI”) under National Payments Corporation of India (NPCI) has issued a circular dated August 28, 2025, announcing an addendum to increase the per-transaction limits for specific categories in UPI, following the earlier notification of August 24, 2025. The enhanced limits apply to merchants categorised as “Verified Merchants” across sectors, including Capital Market, Insurance, Government e-Market Place payments, Travel, Credit Card Bill Payments, Collections, Business/Merchant payments, Jewellery, FX Retail via Bharat Bill Payment System (BBPS), and Digital Account Opening for Term Deposits. Per transaction limits have been raised to INR 5 Lakh (Indian Rupees Five Lakh only) for most categories, with cumulative 24 (twenty-four) hour limits varying between INR 2 Lakh (Indian Rupees Two Lakh only) to INR 10 Lakh (Indian Rupees Ten Lakh only) depending on the category.
Monetary Penalties
1.1.9. RBI imposes penalties on ten banks for regulatory non-compliance
RBI has imposed monetary penalties on the following institutions –
| Sr. No. | Name of Bank | Amount of Penalty | Grounds for Penalty |
| 1. | The Bharat Co-operative Bank Limited, Bengaluru, Karnataka | INR 50,000 (Indian Rupees Fifty Thousand only) | Non-compliance with specific directions issued by RBI under the ‘Supervisory Action Framework (SAF)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
| 2. | The Kalaburagi and Yadgir District Co-operative Central Bank Limited, Karnataka | INR 50,000 (Indian Rupees Fifty Thousand only) | Non-compliance with certain directions issued by RBI on ‘Know Your Customer (“KYC”)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
| 3. | The Dharmapuri District Central Co-operative Bank Limited, Tamil Nadu | INR 1,00,000 (Indian Rupees One Lakh only) | Contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act 1949. |
| 4. | The Bellary District Co-operative Central Bank Limited, Karnataka | INR 1,50,000 (Indian Rupees One Lakh Fifty Thousand only) | Contravention of Sections 19 and 20 provisions read with Section 56 of the Banking Regulation Act, 1949. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act 1949. |
| 5. | The Anand Mercantile Co-operative Bank Limited, Anand, Gujarat | INR 2,00,000 (Indian Rupees Two Lakh only) | Non-compliance with certain directions issued by RBI on ‘Guidelines for Managing Risk in Outsourcing of Financial Services by Co-operative Banks’ and ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
| 6. | The Purasawalkam Co-operative Bank Limited, Tamil Nadu | INR 1,00,000 (Indian Rupees One Lakh only) | Non-compliance with certain directions issued by RBI on ‘Prudential Norms on Capital Adequacy – Primary (Urban) Co-operative Banks (UCBs)’ and specific directions issued by RBI under ‘Supervisory Action Framework (SAF)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
| 7. | The Vijayapura District Central Co-operative Bank Limited, Karnataka | INR 1,00,000 (Indian Rupees One Lakh only) | Contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act 1949. |
| 8. | The Ponani Co-operative Urban Bank Limited, Kerala | INR 50,000 (Indian Rupees Fifty Thousand only) | Non-compliance with certain directions issued by RBI on ‘Co-operative Banks – Interest Rate on Deposits’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. |
| 9. | The Nanded District Central Co-operative Bank Limited, Maharashtra | INR 45,000 (Indian Rupees Forty-Five Thousand only) | Non-compliance with certain directions issued by RBI on ‘Know Your Customers (KYC)’ and ‘Membership of Credit Information Companies (CICs) by Co-operative Banks’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 and Section 25 of the Credit Information Companies (Regulation) Act, 2005. |
| 10 | Bandhan Bank Limited | INR 44,70,000 (Indian Rupees Forty-Four Lakh Seventy Thousand only) | Contravention of section 10(1)(b)(ii) of the Banking Regulation Act, 1949, and non-compliance with RBI direction on ‘Automation of Income Recognition, Asset Classification and Provisioning’ processes in banks. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47A (1) (c) read with section 46 (4) of the Banking Regulation Act 1949. |
2. Key Asian Markets- Philippines and Vietnam
2.1. Philippines
2.2.1. BSP extends moratorium on new licenses for VASPs
The Monetary Board of the Bangko Sentral ng Pilipinas (“BSP”), through a press release on August 28, 2025, has approved the extension of the moratorium on granting new licenses for virtual asset service providers (“VASPs”) for an indefinite period. This extension reflects concerns over the heightened risks associated with virtual assets (“VAs”), such as cryptocurrencies, and highlights BSP’s focus on consumer protection and financial system stability. VASPs facilitate the exchange or transfer of these digital assets. The BSP will periodically review the moratorium as it enhances its monitoring and enforcement capabilities to address emerging risks and adapt to global virtual asset landscape changes.
2.2.2. BSP discount window facility interest rates effective September 01, 2025
BSP, through a press release dated August 28, 2025, reduced its key policy interest rate by 25 (twenty-five) basis points to 5 per cent (five per cent), marking the third consecutive cut to support economic growth amid low inflation. The overnight deposit and lending rates were also lowered to 4.5 per cent (four point five per cent) and 5.5 per cent (five point five per cent), respectively. This decision reflects BSP’s assessment that inflation remains manageable and the economy is operating near its capacity, allowing continued monetary easing.
2.2.3. BSP issues advisory on VASPs
BSP, through a press release dated August 28, 2025, informed the public to exercise caution and conduct due diligence by avoiding transactions with unlicensed or unauthorised VASPs, which are entities facilitating the exchange or transfer of virtual assets (“VA”). To ensure safety, the public should verify a VASP’s registration status through the official BSP list available on its website. BSP also encourages prompt reporting of any unlawful or suspicious activities related to VAs or VASPs directly to the BSP.
2.2.4. BSP adopts new format for announcing monetary policy decisions
BSP, through a press release, informed the public that it will announce monetary policy decisions starting August 28, 2025, with a new format where the monetary policy stance statement is released at 2:30 PM through the BSP website and official account, followed by a livestreamed press conference at 3:00 PM, featuring the Governor’s remarks.
2.2.5. BSP reduces the target Reverse Repurchase Rate
BSP issued a press release on August 27, 2025, announcing the Monetary Board’s decision to reduce the Target Reverse Repurchase (RRP) Rate. The release includes adjustments to the overnight deposit and lending facility rates to 4.5 per cent (four-point-five per cent) and 5.5 per cent (five-point-five per cent), respectively.
2.3. Indonesia
2.3.1. Bank Indonesia released news on Indonesia-Japan QRIS payment connectivity
Bank Indonesia (“BI”) has expanded its Quick Response Code Indonesian Standard (“QRIS”) digital payment system to Japan, launching it on August 17, 2025. Initially available at 35 (thirty-five) merchants in Japan, Indonesian users can make seamless cashless payments by scanning the JPQR Global code using their domestic payment apps. This cross-border payment initiative enhances convenience for tourists and strengthens economic ties between Indonesia and Japan.
3. Trends
3.1. Jana Small Finance Bank set to merge investment and financial holding companies to streamline operations
Jana Small Finance Bank has initiated a process to merge its non-operative financial holding company with its core investment company to create a leaner structure and improve operational efficiency. This merger is unrelated to the bank’s ongoing application for a universal banking license. The bank will continue to focus on core banking services without plans to enter insurance or mutual fund manufacturing, offering third-party insurance products instead.
3.2. Jio Payments Bank to allow customers to invest idle deposits in overnight mutual funds
Jio Payments Bank plans to introduce ‘Savings Pro’ that automatically invests customers’ idle deposits in overnight mutual funds to generate higher returns. This is aimed at offering them better yields than traditional savings accounts. The JioBlackRock Overnight Fund is the mutual fund product leveraged for this offering, focused on debt and money market instruments with overnight maturity. As of June 2025, Jio Payments Bank serves over 25 (twenty-five) lakh customers with deposits totalling INR 358 Crore (Indian Rupees Three Hundred Fifty-Eight Crore only). Jio Financial Services plans more strategic partnerships to expand its product portfolio, emphasising technology and data analytics to deliver relevant services.
3.3. ONDC to launch full suite of financial services within eighteen months
The Open Network for Digital Commerce (“ONDC”) is set to launch a full suite of financial services within the next 18 (eighteen) months. It has already introduced unsecured digital loans that can be sanctioned within six minutes and plans to roll out Goods and Services Tax (GST) invoice financing by September 2024. ONDC will expand into purchase financing, working capital loans, and credit card distribution in partnership with Mastercard. Pilots for insurance and mutual funds are underway, with health and motor insurance being tested, and mutual fund offerings expected to go live soon.
3.4. RBI to discuss the impact of US tariffs on the Indian industry
RBI is likely to consult with industry leaders in September to assess the sectoral impact of the newly imposed 50 per cent (fifty per cent) US tariffs on Indian exports, especially as these tariffs affect 55 per cent (fifty-five per cent) of USD 48 Billion (United States Dollar Forty-Eight Billion) worth of US-bound shipments annually, hitting sectors like textiles, apparel, gems and jewellery, marine products, and MSMEs. RBI Governor affirmed the central bank’s proactiveness to provide policy support and liquidity if these external shocks threaten economic growth, while calling for targeted measures to cushion the sectors most vulnerable to pricing disadvantages of up to 30–35 per cent (thirty – thirty-five per cent) compared to global competitors.
3.5. Punjab National Bank plans to revamp credit card operations by November
Punjab National Bank (“PNB”) plans to revamp its credit card business with enhanced IT infrastructure and improved digital tools. The bank aims to increase visibility and competitiveness in the market by strengthening the credit card division and upgrading its mobile and internet banking. The PNB One mobile app for retail and current account customers will be relaunched by the end of September with enhanced AI features, improving customer experience and operational efficiency.
4. Sector Overview
4.1. Indian Rupee hits record low against offshore Yuan, raising concerns for exporters and trade competitiveness
The Indian Rupee has hit a record low against the offshore Chinese Yuan, marking a significant depreciation that raises concerns about its implications for exporters and India’s trade competitiveness. This decline reflects the increased strength of the Yuan amid China’s robust economic recovery and heightened foreign investor interest. For Indian exporters, a weaker Rupee against the Yuan could result in higher costs for imported raw materials and components from China, squeezing profit margins. Additionally, the currency movement may impact the competitiveness of Indian goods in the Chinese market, potentially making exports more expensive and less attractive.
5. Business Updates
5.1. Mastercard partners with Infosys to scale cross-border payments
Mastercard and Infosys have partnered to enhance cross-border payments for financial institutions globally by integrating Mastercard Move with Infosys Finacle. The collaboration provides financial institutions with easy access, enabling them to facilitate fast, secure, and reliable cross-border payments while enhancing control of risk, operations, costs, and liquidity. It also reduces the time and effort required for banks and financial institutions to access Mastercard Move’s global suite of money movement capabilities, reaching more than 95 per cent (ninety-five per cent) of the world’s banked population.
5.2. Private banks face increased non-performing assets provisions amid rising loan losses
Loan loss provisioning in the Indian banking sector reached a three-year high in the June quarter, driven mainly by private sector banks whose provisions rose 40.4 per cent (forty point four per cent) year-on-year to INR 15,527.2 Crore (Indian Rupees Fifteen Thousand Five Hundred Twenty-Seven Crore Twenty Lakh only), the highest since June 2021. Private banks like Kotak Mahindra, Federal Bank, and South Indian Bank reported significantly higher Non-Performing Assets (NPA) provisions than last year. Meanwhile, Public Sector Banks (“PSBs”) saw a 9.3 per cent (nine point three per cent) decline in provisioning, with most PSBs reporting lower provisions.
5.3. PhonePe launches home insurance offering
PhonePe has launched a new home insurance product that offers affordable premiums starting at INR 181 (Indian Rupees One Hundred Eighty-One only) annually, providing coverage against over 20 (twenty) risks, including fire, floods, earthquakes, riots, and theft. The insurance plans offer flexible coverage ranging from INR 10 Lakh (Indian Rupees Ten Lakh only) to INR 12.5 Crore (Indian Rupees Twelve Crore Fifty Lakh only) and are available to all homeowners, regardless of whether they have an existing loan.
5.4. L&T Finance to offer personal loan products on GPay
As part of its product diversification strategy, L&T Finance has partnered with Google Pay to provide personal loans to eligible users directly through the Google Pay platform. This collaboration combines L&T Finance’s lending expertise with Google Pay’s broad digital reach, enabling streamlined and accessible credit solutions for a broader customer base.
5.5. Bank of Baroda forecasts margins recovery driven by deposit repricing and CASA
Bank of Baroda forecasts a gradual margin recovery in the financial year 26, driven by deposit repricing and a strong Current Account Savings Account (“CASA”) base. The bank expects deposit costs to decline as term deposits reprice by September 2025, with 70–80 per cent (seventy–eighty per cent) of deposits rolling over to lower-cost liabilities. Savings deposit rate cuts and CASA strength are expected to support margins in the second half, helping offset near-term margin pressure.
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.
