AKP Banking & Finance Digest April 07, 2025

📢 Join Us for an Exclusive Webinar on the RBI Penalty Report 2024! 📢

AK & Partners invites you to a high-impact webinar analysing the RBI Penalty Report 2024—a must-attend session for senior leaders in the Banking, Financial Services, and Insurance (BFSI) sector

🔍 What to Expect: 

✅ Key insights from the latest RBI penalty trends 

✅ Strategic implications for CXOs, compliance heads, and legal professionals 

✅ Practical takeaways to strengthen regulatory compliance 📅 Date: 11 April 2025 

🕒 Time: 3:00 PM to 3:30 PM 

📍 Venue: Online (Webinar link will be shared upon registration) 

💡 Stay ahead in regulatory compliance. Reserve your spot now!

1. Regulatory Updates

1.1. India

Reserve Bank of India (RBI)

1.1.1. RBI issues master direction on Interest Rate on Deposits, 2025

The Reserve Bank of India (“RBI”) has issued the Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2025, consolidating all guidelines related to deposit interest rates for banks. The new framework replaces the 2016 Master Directions for commercial and cooperative banks and has been issued under Sections 21 and 35A of the Banking Regulation Act, 1949. The updated Master Direction is effective immediately and aims to streamline regulatory instructions on deposit interest rates. RBI

1.1.2. RBI updates master circular on bank finance to NBFCs

RBI has issued a revised master circular on bank finance to NBFCs, consolidating all existing guidelines as of March 31, 2025. This update, applicable to Scheduled Commercial Banks, excluding Regional Rural Banks (“RRBs”), does not introduce new policies but ensures clarity by compiling all prior instructions. Issued under Section 35A of the Banking Regulation Act, 1949, the circular replaces the April 2024 version and sets forth RBI’s regulatory stance on NBFC financing. RBI

1.1.3. RBI consolidates exposure norms for UCBs

RBI has issued the Master Circular – Exposure Norms and Statutory / Other Restrictions – Urban Co-operative Banks (“UCBs”), vide Circular No. RBI/2025-26/19 dated April 1, 2025. The revised circular consolidates all guidelines issued to UCBs up to March 31, 2025, replacing the earlier circular dated January 16, 2024. It introduces no new instructions but compiles existing directions governing UCBs’ exposure ceilings and statutory restrictions. The annexure provides a reference list of the circulars incorporated. RBI 

1.1.4. RBI issues updated Master Circular on UCB advance management

RBI has released the Master Circular – Management of Advances – UCBs, vide Circular No. RBI/2025-26/18 dated April 1, 2025. This updated circular consolidates all directions issued up to March 31, 2025, replacing the July 25, 202 3 version. While the updated circular incorporates prior guidelines on UCB lending, it introduces no new instructions. The appendix provides a comprehensive list of all circulars subsumed. RBI

1.1.5. RBI updates Master Circular on housing finance for UCBs

RBI has issued an updated Master Circular – Housing Finance for UCBs, vide Circular No. RBI/2025-26/17 dated April 1, 2025. This revised circular consolidates all directions issued up to March 31, 2025, superseding the April 2, 2024, version. It introduces no new guidelines and includes a list of incorporated instructions in Annex - 3. RBI

1.1.6. RBI updates IRAC norms for UCBs

RBI has released the updated Master Circular – Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs, vide Circular No. RBI/2025-26/14 dated April 1, 2025. This version consolidates all prudential norms issued up to March 31, 2025, replacing the April 2, 2024 circular. No new instructions have been introduced. RBI

1.1.7. RBI consolidates guidelines on guarantees and Letter of Credit for UCBs

RBI has issued the updated Master Circular – Guarantees, Co-acceptances & Letters of Credit – UCBs, vide Circular No. RBI/2025-26/11 dated April 1, 2025. The circular integrates all applicable instructions as of March 31, 2025, superseding the April 1, 2024, version. It does not introduce any fresh directions. Refer to the Annex for the compiled updates. RBI

1.1.8. RBI revises capital adequacy guidelines for UCBs

RBI has released the Master Circular – Prudential Norms on Capital Adequacy – Primary UCBs, vide Circular No. RBI/2025-26/09 dated April 1, 2025. This revised circular consolidates all guidelines issued up to March 31, 2025, replacing the earlier version dated April 1, 2024. No new instructions have been introduced. RBI

1.1.9. RBI issues Master Direction on counterfeit notes for 2025

RBI has issued the Master Direction on Counterfeit Notes, 2025 – Detection, Reporting and Monitoring, vide Circular No. RBI/2025-26/132 dated April 1, 2025. Issued under Sections 35A and 56 of the Banking Regulation Act, 1949, this direction consolidates all existing instructions on counterfeit note detection, reporting, and monitoring. The directive aims to provide banks with a single point of reference. RBI

1.1.10. RBI updates capital adequacy norms for UCBs

RBI has issued the Master Circular – Prudential Norms on Capital Adequacy – Primary UCBs, vide Circular No. RBI/2025-26/09 dated April 1, 2025. The revised circular consolidates and updates all applicable instructions and guidelines issued up to March 31, 2025, and is intended to ensure regulatory clarity and capital compliance across UCBs. RBI

1.1.11. RBI revises guidelines on UCB Board governance

RBI has released the Master Circular on Board of Directors – Primary UCBs vide Circular No. RBI/2025-26/07 dated April 1, 2025. The circular consolidates and updates all instructions and guidelines governing the constitution and functioning of UCB Boards, ensuring uniform governance practices across the sector. The previous version dated April 1, 2024, stands superseded. RBI

1.1.12. RBI consolidates norms on SHG-Bank Linkage Programme

The RBI has issued the Master Circular on Self-Help Group (“SHG”)-Bank Linkage Programme vide Circular No. RBI/2025-26/01 dated April 1, 2025. This Circular consolidates all existing guidelines and instructions issued to Scheduled Commercial Banks up to March 31, 2025. The linkage programme remains a cornerstone of financial inclusion, particularly in rural credit access. RBI

1.1.13. RBI issues clarifications on investment portfolio rules for banks

RBI has issued Frequently Asked Questions (“FAQs”) addressing key aspects of the Classification, Valuation, and Operation of the Investment Portfolio of Commercial Banks Directions, 2023. These clarifications, based on market experience and banking practices, apply to all commercial banks (excluding RRBs) and will take effect immediately. The 2023 Directions, issued on September 12, 2023, will be updated to incorporate these FAQs and necessary amendments. RBI

1.1.14. RBI Sets FPI Debt Investment Limits for FY 2025-26

RBI has retained Foreign Portfolio Investor (“FPI”) limits in Government Securities (6 per cent), State Government Securities (2 per cent), and corporate bonds (15 per cent) of outstanding stock. Revised debt limits for October 2025–March 2026 total INR 14,70,654 Crore (Indian Rupee Fourteen Crore Seventy Lakhs Six Hundred Fifty-Four only). Additionally, FPIs may sell Credit Default Swaps up to 5 per cent of corporate bonds, capped at INR 2,93,612 Crore (Indian Rupee Two Crore Ninety-Three Lakhs Six Hundred Twelve only). RBI

International Financial Services Centres Authority (IFSCA)

1.1.15. IFSCA revises fee structure for PSOs in IFSC

The International Financial Services Centres Authority (“IFSCA”) has issued a circular revising the fee structure for Payment System Operators (“PSOs”) in IFSC under the IFSCA (Payment and Settlement Systems) Regulations, 2024. The changes align with a prior circular issued on May 17, 2023, with all previous provisions remaining in effect. IFSCA

1.1.16. IFSCA amends corporate governance guidelines for finance companies

IFSCA has amended its Corporate Governance and Disclosure Guidelines for Finance Companies via Circular dated April 04, 2025. These changes align the guidelines with the IFSCA (Finance Company) Regulations, 2021 and the new Framework for Global/Regional Corporate Treasury Centres. Key changes include a revised Clause 3 on applicability, distinguishing between generic and detailed governance rules depending on the Finance Company’s registered activity. IFSCA

1.1.17. IFSCA issues framework for global/regional corporate treasury centres at GIFT City

IFSCA has introduced a revised Framework for Global/Regional Corporate Treasury Centres (GRCTCs) via Circular dated April 04, 2025, replacing the 2021 circular. Issued under the Finance Company Regulations, 2021, the Framework streamlines registration, introduces a minimum owned fund requirement of USD 0.2 million (United States Dollars Two Hundred Thousand only), and clarifies service eligibility for Group Entities. Applications must be submitted via the SWIT portal. The Certificate of Registration remains valid unless suspended or cancelled. IFSCA

1.1.18. Monetary Penalties

RBI imposes monetary penalties on the following financial institutions:

Name of the Financial Institution	Penalty Imposed	Reasons
RBI imposes monetary penalty on Aryavart Bank, Lucknow	INR 36,40,000/- (Indian Rupees Thirty-Six Lakh and Forty Thousand only)	Non-Compliance and contravention of provisions of Section 26A read with Section 51(1) of the Banking Regulation Act, 1949. During the statutory inspection, it was found that the bank had failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time.

1.2. Vietnam

1.2.1. Vietnam prepares a legal framework for international financial centres ahead of 2025

The State Bank of Vietnam (“SBV”) is drafting a legal framework for the country’s upcoming International Financial Centres (“IFCs”), expected to be approved in May 2025. SBV Governor Pham Tien Dzung emphasised that Vietnam’s IFC model will differ from those in other countries, requiring legal entities to register for operation within the centres. State Bank of Vietnam   

1.2.2. SBV strengthens credit policies to support national target programs

The SBV is enhancing credit policies to support Vietnam’s National Target Programs (NTPs) for 2021-2025, focusing on economic stability and inclusive growth. With over 10 (ten) million beneficiaries, outstanding credit exceeds VND 2,200 Trillion (Vietnam Dong Two Thousand Two Hundred Trillion only). However, funding shortfalls have hindered preferential credit for ethnic minority areas. To address this, SBV plans to amend Decree No. 55/2015/ND-CP and review Decree No. 28/2022/ND-CP. State Bank of Vietnam

1.2.3. Vietnam synchronises policies to advance national target programs

On March 31, 2025, Deputy PMs Tran Hong Ha and Mai Van Chinh chaired a meeting on implementing the National Target Programs (NTPs) for New Rural Development, Sustainable Poverty Reduction, and Ethnic Minority Development. SBV Deputy Governor Dao Minh Tu highlighted coordinated efforts in monetary-fiscal policy, improved credit access, and targeted lending, including forestry, fisheries, and social credit programs via VBSP Vietnam Bank For Social Policies, to foster macroeconomic stability and inclusive growth through the 2021–2025 period. State Bank of Vietnam

1.3 Philippines

1.3.1. Philippine inflation cools to 1.8 per cent in March

The Bangko Sentral ng Pilipinas (“BSP”) reported a decline in headline inflation to 1.8 per cent (one point eight per cent) in March 2025, down from 2.1 per cent (two point one per cent) in February—well within its forecast range of 1.7–2.5 per cent. Year-to-date inflation stands at 2.2 per cent (two point two per cent), near the lower bound of the Government’s 2–4 per cent (two to four per cent) target. Core inflation also slowed to 2.2 per cent (two point two per cent). Bangko Sentral ng Pilipinas  

1.3.2. Bank of Makati joins BSP’s ‘Piso Caravan’ to promote clean currency

Bank of Makati, Inc. has joined the BSP’s “Piso Caravan”, a programme promoting the exchange of unfit currency and the recirculation of idle coins. The bank signed its pledge of commitment on 24 March 2025, bringing the total number of participating financial institutions to 141 (one hundred forty one). Led by BSP’s regional offices, the initiative supports the clean note and coin policy and encourages proper handling of Philippine currency. Bangko Sentral ng Pilipinas 

2. Trends

2.1. India’s fintech sector pushes for self-regulation amid maturity shift

India’s fintech sector is moving toward self-regulation, signalling its transition from a high-growth disruptor to a mature pillar of the financial ecosystem. With discussions led by stakeholders like Zerodha, Perfios, and 3one4 Capital, consensus is building around establishing a self-regulatory organisation (SRO) to standardise governance, bolster compliance, and protect consumers. Entrepreneur

3. Sector Overview

3.1. RBI launches verified WhatsApp channel to boost public awareness

Expanding its ‘RBI Kehta Hai’ campaign, the RBI has launched a verified WhatsApp channel to deliver key financial awareness messages. This move ensures wider, real-time access to trusted information across geographical boundaries. The initiative aims to enhance financial literacy and strengthen public trust in the digital financial ecosystem. Users can access the channel by scanning the QR code shared by RBI. RBI 

3.2. Poonam Gupta appointed as RBI deputy governor

The central government has appointed Poonam Gupta as the new Deputy Governor (DG) of RBI, making her the first woman DG in 14 (fourteen) years. She succeeds Michael Patra, who served from 2020 to 2025. Gupta, an eminent economist, was previously the Director General of National Council of Applied Economic Research (NCAER) and a member of the Economic Advisory Council to the Prime Minister. She becomes only the fourth woman DG in RBI’s history. BFSI 

3.3 NPCI appoints Sohini Rajola as executive director

The National Payments Corporation of India (“NPCI”) has appointed Sohini Rajola as executive director, effective 2 April 2025. With over twenty years of experience in payments and banking, Rajola will spearhead product enhancement, business development, strategic partnerships, and go-to-market plans. She previously held leadership roles at Western Union and Axis Bank. NPCI MD & CEO Dilip Asbe expressed confidence in her ability to advance NPCI’s mission of enabling secure, seamless digital payment solutions. NPCI

3.4 UPI outage disrupts transactions amid year-end rush

A surge in Unified Payment Interface (“UPI”) transactions and financial year-end settlements caused a bank-wide outage, leading to failed transactions. The National Payments Corporation of India (NPCI) attributed the disruption to high transaction volumes and bank server overload due to year-end closures. Industry experts cite internet connectivity issues, capacity constraints, and technical glitches as possible reasons. Banks and financial institutions may need to increase investments in data infrastructure to prevent future disruptions. Business Standard

3.3. New UPI Rules from April 1

Starting April 1, 2025, the National Payments Corporation of India (NPCI) will implement updated UPI guidelines for banks, apps, and third-party providers to enhance interoperability and customer experience. Banks and PSP applications must use the Mobile Number Revocation List/Digital Intelligence Platform (MNRL/DIP) to update their mobile number records at least weekly. This measure aims to reduce transaction errors caused by outdated or reassigned mobile numbers. Disconnected numbers can be reassigned after 90 (ninety) days as per the Department of Telecommunications (DoT). Times of India

4. Business Updates

4.1 BlackSoil-Caspian Debt merger receives RBI approval

BlackSoil Capital and Caspian Debt have secured approval from RBI for their merger, with only National Company Law Tribunal (NCLT) clearance pending. The merger aims to enhance BlackSoil’s ability to support startups, Micro Small and Medium Enterprises (“MSMEs”), and impact-driven businesses by expanding credit solutions for underserved enterprises requiring smaller loan sizes. BlackSoil’s managing director, Ankur Bansal, stated that the integration of Caspian Debt’s impact investment expertise will help build a more inclusive alternative credit ecosystem in India. Entrepreneur

4.2. Delhi High Court restrains use of ‘Bharatpay’ trademark over similarity with ‘BharatPe’

The Delhi High Court has temporarily restrained the use of the ‘Bharatpay’ trademark, ruling that it is phonetically, visually, and structurally like ‘BharatPe.’ Justice Amit Bansal noted that both entities operate in the UPI and digital payments sector, leading to a likelihood of confusion. The court’s interim injunction follows an initial assessment of trademark infringement claims. Inc42

4.3. Paytm launches MahaKumbh soundbox with digital screen

Paytm has unveiled the MahaKumbh Soundbox, a Made-in-India 4G-enabled device featuring a digital screen for instant payment alerts and live transaction tracking. With audio confirmations, support for 11 languages, and a 10-day battery life, it ensures reliable performance for merchants across sectors. The Soundbox supports UPI apps and RuPay Credit Card payments via UPI and reflects Paytm’s push for enhanced transaction visibility and efficiency. Designed for India’s diverse retail environments, it is splash and temperature resistant, with a 3-watt speaker for clear voice updates. Paytm

4.4. Juspay secures USD 60 Million in Series D to Scale AI and Global Expansion

JUSPAY has raised USD 60 Million (United States Dollar Sixty Million only) in a Series D round led by Kedaara Capital, with participation from SoftBank and Accel. The funding will support Juspay’s global expansion, scale its open-source platform Hyperswitch, and enhance Artificial Intelligence ("AI")-led payments innovation. Mint

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.

For further queries or details, you may contact:

Mr Anuroop Omkar

Partner, AK & Partners

info@akandpartners.in