Latest News on Reserve Bank of India
RBI Unveils New Stimulus Package: Introduces VRR, OMO Purchases, and Dollar Swap to Inject Liquidity – What You Need to Know About the Latest Economic Moves
The Reserve Bank of India (RBI) has announced plans to conduct a significant foreign exchange and bond market operation. On February 4, 2026, the RBI will hold a USD/INR buy/sell swap auction worth $10 billion with a tenor of 3 years. This operation aims to inject liquidity into the foreign exchange market and stabilize the Indian rupee.
In addition to the foreign exchange operation, the RBI will also conduct open market operation (OMO) purchase auctions of Government of India securities. The total amount of securities to be purchased is Rs 1,00,000 crore, which will be split into two tranches of Rs 50,000 crore each. The auctions will be held on February 5, 2026, and February 12, 2026.
The OMO purchase auctions are expected to help regulate the money supply in the economy and maintain liquidity in the bond market. By purchasing government securities, the RBI will inject liquidity into the system, which can help reduce borrowing costs and stimulate economic growth. The move is also expected to have a positive impact on the bond market, as it will help to reduce yields and increase demand for government securities.
The combination of the foreign exchange swap auction and OMO purchase auctions demonstrates the RBI’s efforts to manage the country’s foreign exchange reserves and regulate the money supply in the economy. The RBI’s actions are aimed at maintaining financial stability, promoting economic growth, and ensuring that the Indian economy remains resilient in the face of global economic uncertainties.
Overall, the RBI’s plans to conduct a USD/INR buy/sell swap auction and OMO purchase auctions are significant moves to manage the country’s foreign exchange and bond markets. The operations are expected to have a positive impact on the economy, and market participants will be closely watching the auctions to gauge the RBI’s intentions and adjust their strategies accordingly. The outcomes of these auctions will be crucial in determining the direction of the Indian economy in the coming months.
RBI Unveils Third Liquidity Infusion as Indian Rupee Plunges to Historic Low of 91.97 – scanx.trade
The Reserve Bank of India (RBI) has announced a third liquidity tranche to stabilize the rupee, which has touched a record low of 91.97 against the US dollar. The RBI’s move aims to ease the pressure on the currency and prevent further depreciation. The central bank has been actively managing the rupee’s value in recent weeks, as it has been under significant pressure due to a combination of domestic and global factors.
The rupee’s decline has been driven by a strong US dollar, rising crude oil prices, and concerns over India’s current account deficit. The US Federal Reserve’s decision to raise interest rates has also led to a strengthening of the dollar, making it more expensive for Indian companies to borrow abroad. As a result, the rupee has been consistently weakening, touching new lows against the dollar.
To address the situation, the RBI has taken several steps, including selling dollars in the spot market and providing liquidity to banks through various instruments. The central bank has also raised interest rates to make borrowing more expensive and reduce demand for foreign currency. Additionally, the RBI has imposed restrictions on non-essential imports to reduce the demand for foreign exchange.
The third liquidity tranche announced by the RBI is expected to provide additional support to the rupee. The move is seen as a proactive measure to prevent the currency from depreciating further and to maintain financial stability. The RBI’s actions are also expected to help reduce the pressure on the country’s foreign exchange reserves, which have been declining in recent weeks.
The rupee’s weakness has significant implications for the Indian economy, as it makes imports more expensive and increases the cost of borrowing for companies. A weaker rupee also makes it more difficult for the government to manage inflation, as imported goods become more expensive. The RBI’s efforts to stabilize the rupee are therefore critical to maintaining economic stability and promoting growth.
Overall, the RBI’s announcement of a third liquidity tranche is a welcome move to stabilize the rupee and prevent further depreciation. The central bank’s proactive approach is expected to help reduce the pressure on the currency and promote financial stability. However, the rupee’s value will continue to be influenced by a range of domestic and global factors, and the RBI will need to remain vigilant to address any future challenges.
DBS Predicts 2026-27 Budget Will Prioritize Capital Expenditure Over Tax Reforms, Driving Growth Through Infrastructure Spending
The Indian government’s Union Budget for 2026-27 is expected to prioritize capital expenditure as the main driver of growth, with a focus on infrastructure-led development. According to a report by DBS Group, taxes are likely to remain largely unchanged, with policymakers focusing on execution over fresh allocations. The report estimates that capital expenditure will be around 3-3.1% of GDP, with an emphasis on shovel-ready and greenfield projects, as well as concessional support for state-level capital expenditure.
The report notes that India’s fiscal position has strengthened post-pandemic, with the central deficit halving and a sovereign outlook upgrade in 2025. Despite a potential revenue shortfall of Rs 1.1-1.2 trillion in FY26, the report expects the government to meet deficit targets through spending rationalization, moderated capital expenditure, and restrained revenue expenditure growth. The FY27 Budget is expected to anchor fiscal policy to the debt-to-GDP ratio, with the Centre targeting a reduction to around 50% by FY31.
On the revenue front, the report expects no major tax changes, with gradual gains in tax buoyancy driven by stronger nominal GDP growth. Non-tax revenues may rise due to higher dividends from the Reserve Bank of India (RBI) and public sector undertakings (PSUs), while divestment targets are likely to remain modest. The report concludes that the FY27 Budget will balance fiscal discipline with growth, avoiding major tax surprises and sustaining capital expenditure momentum.
The Budget is also expected to reflect India’s strategic priorities, including manufacturing, infrastructure, defence, and social welfare, while taking into account a crowded state election calendar. Overall, the report suggests that the government will prioritize long-term economic priorities, such as reducing the debt-to-GDP ratio and promoting infrastructure-led growth, while maintaining fiscal discipline and avoiding major tax changes. This approach is expected to support India’s economic growth and development in the coming year.
Small finance banks set sights on poaching top talent from bigger rivals to fuel growth
India’s small finance banks (SFBs) are expanding their horizons and preparing for a transition to universal banking. To achieve this, they are aggressively hiring senior executives from larger banks and non-bank financiers to strengthen their leadership and scale their businesses. Several prominent SFBs, including AU Small Finance Bank, Ujjivan Small Finance Bank, Suryoday Small Finance Bank, and Utkarsh Small Finance Bank, are looking to onboard senior executives, including key business officers, vice-presidents, and executive vice-presidents.
The move highlights the growth of the SFB sector, which has demonstrated significantly higher hiring momentum compared to the broader banking sector. In 2025, SFBs added 26,736 employees, a 18% increase in their workforce, while public sector banks added 1,626 people and private sector banks reduced their staff strength by 7,257. SFBs are attracting talent by offering “bump ups” in compensation and significant role elevation.
The Reserve Bank of India (RBI) has set out guidelines for SFBs to transition to universal banks, including a minimum net worth of ₹1,000 crore, a satisfactory track record of at least five years, and a net profit in the last two financial years. AU Small Finance Bank has already received a conditional nod from the RBI, while others, like Ujjivan, are still awaiting regulatory approval.
SFBs are not just scouting talent for senior roles but are also looking at junior ones, with a 30% increase in hiring in junior levels. They are recruiting sales executives typically from other banks and non-banking financial companies (NBFCs). The aggressive hiring by SFBs reflects their ambition to expand and become universal banks, which would require branch expansion and more people at various levels.
The SFB sector has made significant progress since its inception in 2014, with a compounded annual growth rate of 28% in deposits and 25% in advances between FY22 and FY25. However, they still face challenges, such as low-cost deposits, with their current and savings account (Casa) deposits at 26.2% of overall deposits, lower compared to universal banks. Nevertheless, SFBs are poised for a more complex phase of growth, and their ability to attract and retain talent will be critical to their success.
RBI’s Dollar Sales Surpass FY25 Targets, Reaching $43.2 Billion Amid Rupee’s Ongoing Volatility – scanx.trade
The Reserve Bank of India (RBI) has sold a significant amount of dollars in the foreign exchange market, with total sales crossing the $43.2 billion mark as of February 2024. This exceeds the total dollar sales for the entire fiscal year 2025, highlighting the central bank’s efforts to stabilize the Indian rupee amidst high volatility.
The rupee has been experiencing significant fluctuations against the US dollar, with a decline of over 10% in the past year. The RBI has been intervening in the foreign exchange market to prevent a sharp depreciation of the currency, which could have negative consequences for the economy, including higher import costs and inflation.
The dollar sales by the RBI are aimed at reducing the supply of dollars in the market, thereby increasing the value of the rupee. The central bank has been using its foreign exchange reserves to sell dollars, which has resulted in a decline in the reserves from $633 billion in September 2021 to around $590 billion currently.
The RBI’s intervention in the foreign exchange market is not only aimed at stabilizing the rupee but also at maintaining financial stability. A sharp decline in the currency could lead to a decline in investor confidence, which could have negative consequences for the economy.
The dollar sales by the RBI have been significant, with the central bank selling $43.2 billion in the first 11 months of the fiscal year. This is higher than the total dollar sales of $34.6 billion in the entire fiscal year 2023. The RBI’s intervention in the foreign exchange market is expected to continue, given the ongoing volatility in the currency market.
The RBI’s actions are also aimed at preventing a sharp decline in the rupee, which could make imports more expensive and lead to higher inflation. The central bank has been using a combination of monetary policy tools, including interest rates and foreign exchange intervention, to maintain financial stability and control inflation.
Overall, the RBI’s dollar sales are a significant development, highlighting the central bank’s efforts to stabilize the rupee amidst high volatility. The RBI’s intervention in the foreign exchange market is expected to continue, given the ongoing uncertainty in the global economy and the currency market. The central bank’s actions will be closely watched by investors and policymakers, as they have significant implications for the Indian economy and financial markets.
RBI Introduces Stricter Priority Sector Lending Guidelines, Makes Auditor Certification Compulsory – scanx.trade
The Reserve Bank of India (RBI) has strengthened its priority sector lending (PSL) framework by introducing mandatory auditor certification for banks. The move aims to enhance the transparency and accountability of banks in meeting their priority sector lending targets.
Priority sector lending refers to the allocation of a certain percentage of a bank’s total credit to specific sectors, such as agriculture, micro and small enterprises, and weaker sections. The RBI has set targets for banks to lend to these sectors, and the new framework is designed to ensure that banks comply with these targets.
Under the new framework, banks will be required to obtain a certificate from their statutory auditors confirming that they have met their priority sector lending targets. The certificate will be required for each financial year, and banks will have to submit it to the RBI within a specified timeframe.
The auditor’s certificate will verify that the bank has complied with the priority sector lending targets, including the sub-targets for small and marginal farmers, micro enterprises, and weaker sections. The certificate will also verify that the bank has not diverted any funds meant for priority sector lending to other sectors.
The RBI has also introduced a new system of incentives and penalties to encourage banks to meet their priority sector lending targets. Banks that exceed their targets will be eligible for incentives, while those that fail to meet their targets will face penalties.
The strengthening of the priority sector lending framework is expected to have a positive impact on the economy, particularly in rural areas. By ensuring that banks lend to priority sectors, the RBI aims to increase credit flow to these sectors, which will help to promote economic growth and reduce poverty.
Overall, the introduction of mandatory auditor certification for priority sector lending is a significant step towards ensuring that banks meet their social obligations and contribute to the country’s economic development. The move is expected to enhance the transparency and accountability of banks and promote greater compliance with priority sector lending targets.
In a bid to push banks to lend more to the agricultural and MSME sectors, the RBI has been taking various measures. With this move, the RBI aims to bring more transparency in the PSL framework. It will help banks in better assessment of priority sector targets. This move is likely to increase the credit flow to the priority sectors, which will have a positive impact on the economy.
HDFC Bank and ICICI Bank Ordered by RBI to Set Aside Extra Funds to Address Priority Sector Lending Shortfalls
The Reserve Bank of India (RBI) has directed HDFC Bank and ICICI Bank to make additional provisions in their financial statements to address priority sector lending (PSL) compliance issues. This move is aimed at ensuring that the banks meet the regulatory requirements for lending to priority sectors, such as agriculture, small-scale industries, and export-oriented businesses.
As per the RBI guidelines, banks are required to allocate a certain percentage of their net bank credit to priority sectors. However, HDFC Bank and ICICI Bank were found to have failed to meet these requirements, leading to the RBI’s directive. The banks will now have to make additional provisions to compensate for the shortfall in their PSL lending.
The RBI has been emphasizing the importance of PSL in recent years, as it helps to promote financial inclusion and support economic growth. The regulator has set targets for banks to lend to priority sectors, and banks that fail to meet these targets are required to make additional provisions.
The directive to HDFC Bank and ICICI Bank is expected to have a significant impact on their financial performance. The banks will have to set aside additional funds to meet the PSL requirements, which could affect their profitability. However, the move is seen as a positive step towards promoting financial inclusion and supporting the growth of priority sectors.
The RBI’s action is also expected to have a broader impact on the banking sector. Other banks that have failed to meet PSL requirements may also face similar directives, which could lead to a more level playing field in the industry. The move is also expected to promote greater transparency and accountability in the banking sector, as banks will be required to disclose their PSL lending performance in their financial statements.
In recent years, the RBI has taken several steps to promote PSL, including the introduction of new guidelines and the imposition of penalties on banks that fail to meet the requirements. The regulator has also encouraged banks to lend to priority sectors through various incentives, such as lower risk weights and higher returns on investments.
Overall, the RBI’s directive to HDFC Bank and ICICI Bank is a significant step towards promoting financial inclusion and supporting the growth of priority sectors. The move is expected to have a positive impact on the banking sector and the economy as a whole, as it will help to promote greater transparency and accountability in lending practices.
Small Finance Banks Poised for 24% Surge: The Future Challengers to HDFC Bank’s Throne?
The small finance bank (SFB) sector in India is experiencing significant growth, with loan books expanding at a compound annual growth rate (CAGR) of 20-25%. This growth is driven by lending to small businesses, housing, and vehicles, as well as an increase in deposit mobilization. The sector is expected to reach total advances of over ₹2 trillion by fiscal year 2026. The Reserve Bank of India’s (RBI) new roadmap for SFB-to-Universal Bank transitions is also supporting the sector’s growth.
Several SFBs have reported strong performance in the second quarter of FY26. AU Small Finance Bank reported a 17% year-on-year loan book expansion, with deposits growing 21% and a net profit of ₹561 crore. Ujjivan Small Finance Bank saw its loan book grow 14% year-on-year, with deposits rising 15.1% and a net profit of ₹122 crore. Capital Small Finance Bank posted loan book growth of around 18% year-on-year, with deposits increasing 20% and a net profit of ₹35 crore. Suryoday Small Finance Bank experienced strong business growth, with deposits up 35.5% and the loan book expanding 18.9%, but its asset quality weakened and net profit declined.
The valuations of these SFBs vary significantly, with AU Small Finance Bank trading at approximately four times book value and Ujjivan SFB trading at 1.9 times book. Capital SFB and Suryoday SFB trade below book value, indicating subdued valuations due to higher risks or uneven performance. Investors must carefully select SFBs based on consistent growth, controlled risks, and improving profitability.
The SFB sector’s growth is driven by several factors, including the increasing demand for financial services from small businesses and individuals, and the government’s initiatives to promote financial inclusion. The sector’s expansion is also driven by the RBI’s efforts to strengthen the banking system and promote the growth of SFBs. However, the sector also faces challenges, such as intense competition, regulatory risks, and the need to maintain asset quality.
Overall, the SFB sector in India is experiencing significant growth and is expected to continue to play an important role in promoting financial inclusion and supporting the country’s economic growth. Investors must carefully evaluate the performance and valuations of individual SFBs to make informed investment decisions. With the sector’s growth expected to continue, SFBs are evolving from niche micro-lenders into systemic players, and their transition to universal banks is likely to have a significant impact on the Indian banking landscape.
RBI’s $10 billion foreign exchange swap sees overwhelming response, drawing $29.9 billion in bids as rupee faces pressure – scanx.trade
The Reserve Bank of India’s (RBI) $10 billion foreign exchange swap auction has attracted a significant amount of interest from banks, with bids totaling $29.9 billion. This overwhelming response is a testament to the RBI’s efforts to alleviate pressure on the Indian rupee, which has been facing significant depreciation in recent times.
The rupee has been under pressure due to a combination of factors, including a widening trade deficit, foreign investment outflows, and a strengthening US dollar. To mitigate this pressure, the RBI announced a $10 billion foreign exchange swap auction, which allows banks to swap their US dollar holdings for rupees. This move is aimed at injecting liquidity into the foreign exchange market and reducing the demand for dollars, thereby supporting the rupee.
The $29.9 billion in bids received by the RBI is nearly three times the amount of the auction, indicating a high level of interest among banks to participate in the swap. This response is seen as a positive sign, as it suggests that banks are confident in the RBI’s ability to manage the foreign exchange market and stabilize the rupee.
The RBI’s move is also expected to have a positive impact on the country’s foreign exchange reserves, which have been declining in recent months. By attracting dollars into the system, the RBI can build up its reserves and improve its ability to intervene in the foreign exchange market to support the rupee.
The success of the auction is also seen as a boost to the government’s efforts to stabilize the economy, which has been facing headwinds in recent times. The rupee’s depreciation has been a major concern for policymakers, as it can lead to higher import costs and inflation. By supporting the rupee, the RBI is helping to reduce the risk of inflation and maintain economic stability.
Overall, the RBI’s $10 billion foreign exchange swap auction has been a successful move, attracting a significant amount of interest from banks and helping to alleviate pressure on the rupee. The move is seen as a positive step towards stabilizing the economy and maintaining financial stability, and is expected to have a positive impact on the country’s foreign exchange reserves and the overall economic outlook.
RBI Pumps in ₹50,000 Crore via Open Market Operations as Demand Surges Among Participants, Reports scanx.trade
The Reserve Bank of India (RBI) has injected a significant amount of liquidity into the financial system through open market operations (OMOs). In a recent move, the RBI infused ₹50,000 crore into the market, aiming to ease the liquidity crunch and stabilize the financial system. This injection of funds was made possible through the purchase of government securities from banks and other market participants.
The RBI’s decision to inject liquidity through OMOs was driven by strong demand from market participants. Banks and other financial institutions have been facing a liquidity shortage in recent times, which has led to a surge in borrowing rates and a decrease in lending. By injecting liquidity into the system, the RBI aims to reduce borrowing costs and encourage lending, thereby boosting economic growth.
The OMOs were conducted through a multi-security auction, where the RBI purchased government securities with residual maturity ranging from 2024 to 2033. The auction saw strong participation from market players, with the RBI receiving bids worth ₹1.48 lakh crore, significantly higher than the notified amount of ₹50,000 crore. This indicates a strong demand for liquidity in the system and highlights the RBI’s efforts to meet the requirements of market participants.
The RBI’s injection of liquidity is expected to have a positive impact on the financial system. With increased liquidity, banks and other financial institutions will have more funds available for lending, which can lead to a reduction in borrowing rates and an increase in credit growth. This, in turn, can boost economic activity, as businesses and individuals will have easier access to credit at affordable rates.
The RBI’s move is also seen as a step towards maintaining financial stability and ensuring that the economy remains on a growth trajectory. The central bank has been closely monitoring the liquidity situation in the system and has been taking steps to address any shortages. The injection of ₹50,000 crore through OMOs is a significant step in this direction, and market participants will be watching the RBI’s future moves closely.
In conclusion, the RBI’s injection of ₹50,000 crore through OMOs is a significant move aimed at easing the liquidity crunch and stabilizing the financial system. With strong demand from market participants, the RBI’s efforts are expected to have a positive impact on the economy, leading to reduced borrowing rates, increased credit growth, and boosted economic activity. As the RBI continues to monitor the liquidity situation, market participants will be looking forward to its future moves to ensure that the financial system remains stable and supportive of economic growth.
Which Public Sector Bank is likely to emerge as the top performer in the current financial year?
The banking sector is expected to be in the spotlight as the Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points to 5.25% on December 5. This move is likely to have a significant impact on the monetary structure of the banking sector, leading to lower interest rates for consumers on loans such as home loans and car loans.
As the season of financial results declaration is underway, several public sector banks are set to release their financial results for the December-end quarter. The Bank of India, Union Bank of India, IDBI Bank, and Central Bank of India have announced the dates for the declaration of their financial results as January 21, January 14, January 17, and January 16, respectively.
However, the three largest public sector banks (PSBs) – State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda – have yet to announce the dates for the declaration of their financial results. Despite this, investors and analysts can draw some expectations from the previous quarter’s results.
The reduction in the repo rate is expected to boost the banking sector’s performance, as it will lead to lower borrowing costs for banks and increased lending to consumers and businesses. This, in turn, is likely to have a positive impact on the banks’ net interest income and profitability.
The upcoming financial results of the public sector banks will be closely watched by investors, analysts, and regulators, as they will provide insights into the impact of the RBI’s monetary policy decisions on the banking sector. The results will also provide a glimpse into the banks’ asset quality, capital adequacy, and overall financial health.
Overall, the banking sector is expected to be in focus in the coming weeks, with the financial results of public sector banks providing valuable insights into the sector’s performance and the impact of the RBI’s policy decisions. As the largest PSBs, SBI, PNB, and Bank of Baroda, are yet to announce their results, their declarations will be closely watched by the market.
AU Small Finance Bank Unveils Its 2024-25 Sustainability Report, Emphasizing Commitment to Banking that Benefits Both People and the Planet, Driving Inclusive Progress.
AU Small Finance Bank (AU SFB) has released its fourth Sustainability Report, highlighting the bank’s commitment to transparency and accountability across four key pillars: Sustainable Finance, Operations, Communities, and Reporting. The report showcases the bank’s progress in various areas, including climate action, financial inclusion, and governance excellence.
One of the significant achievements of AU SFB is the mobilization of ₹1,178 crore for climate-positive projects through its Green Deposits, with ₹958.81 crore supporting renewable energy projects, ₹90.51 crore financing electric vehicles, and ₹1.48 crore advancing green building initiatives. The bank has also outperformed financial inclusion norms, with 32% of its branches located in unbanked rural centers, exceeding the mandated 25%.
In addition to its financial achievements, AU SFB has invested ₹43 crore in corporate social responsibility (CSR) initiatives, benefiting over 2.72 lakh individuals through flagship programs such as AU Ignite, AU Udyogini, and AU Bano Champion. The bank has also achieved an Employee Happiness Index of 86%, delivered 2.09 million training hours, and maintained an average of 32 training hours per employee per year, reflecting its focus on human capital and well-being.
The report has been prepared in alignment with the Global Reporting Initiative (GRI) Standards and the Securities and Exchange Board of India’s Business Responsibility and Sustainability Reporting (SEBI BRSR) framework. It captures the bank’s performance for the financial year 2024-25 and has been independently assured by Intertek India.
AU SFB has also secured an AA (Leader) ESG rating by MSCI, with a Low-Risk score of 17.1 by Sustainalytics, reinforcing its position as a responsible financial institution. The bank has partnered with IFC on Climate Risk Advisory, integrating physical and transition risks and financed emissions into credit and risk models, aligned with global best practices and RBI guidelines.
The bank’s Chairman, H R Khan, and Founder, MD & CEO, Sanjay Agarwal, have emphasized the importance of sustainability and the bank’s commitment to creating a future that is inclusive, resilient, and enduring. As AU SFB prepares to transition to a Universal Bank, it recognizes that greater scale means greater responsibility to its stakeholders, society, and the planet.
Overall, the report highlights AU SFB’s progress in integrating sustainability into its business strategy and operations, and its commitment to creating long-term value for its stakeholders while contributing to the well-being of the environment and society. With a strong foundation in place, AU SFB is well-positioned to achieve its goal of becoming a Universal Bank while maintaining its focus on sustainability and social responsibility.
The bank’s sustainability report is a testament to its commitment to transparency and accountability, and its efforts to create a positive impact on the environment and society. As the bank continues to grow and expand its operations, it is likely to play an increasingly important role in promoting sustainable development and financial inclusion in India.
In conclusion, AU SFB’s fourth Sustainability Report is a comprehensive document that showcases the bank’s progress in various areas of sustainability, including climate action, financial inclusion, and governance excellence. The report demonstrates the bank’s commitment to creating a sustainable future and its efforts to integrate sustainability into its business strategy and operations.
Kotak Mahindra Bank has been penalized ₹61.95 lakh by the RBI due to non-compliance with regulatory requirements regarding account management and reporting practices.
The Reserve Bank of India (RBI) has imposed a fine of ₹61.95 lakh on Kotak Mahindra Bank for violating key banking regulations. The penalty was issued after an inspection of the bank’s financial position as of March 2024, which revealed lapses in managing Basic Savings Bank Deposit (BSBD) accounts and reporting borrower data to credit information companies. The RBI found that the bank had opened multiple BSBD accounts for individuals who already held such accounts, violating the one-account-per-person rule. Additionally, the bank allowed its business correspondents in rural areas to perform tasks outside their regulated scope, compromising the standardized oversight required to protect vulnerable consumers.
The bank was also found to have provided incorrect data to credit information companies, which can impact borrowers’ credit scores and future loan eligibility. The RBI issued a show-cause notice and finalized the penalty after reviewing the bank’s written and oral submissions. The penalty addresses statutory failures, but does not affect the validity of individual customer transactions or existing agreements. The RBI’s enforcement action highlights a broader regulatory push to ensure that large private lenders prioritize administrative precision and customer data protection.
The Logical Indian, a media outlet, has welcomed the RBI’s decision, stating that trust is the foundation of the relationship between a bank and its patrons. The outlet believes that the penalty is a necessary step towards corporate accountability and that no bank should be allowed to overlook protocols that safeguard the rights of everyday citizens. The RBI’s action is seen as a move towards ensuring that banks prioritize transparency and fairness in their operations, particularly with regards to vulnerable consumers.
The case highlights the importance of financial inclusion and the need for banks to comply with regulations that protect the rights of consumers. The BSBD accounts are designed to help economically weaker sections access formal banking services without the burden of minimum balance requirements. However, the bank’s actions compromised the integrity of these accounts and put vulnerable consumers at risk. The RBI’s penalty is a reminder that banks must prioritize the needs of their customers and comply with regulations that protect their rights.
Kotak Mahindra Bank slapped with Rs 61.95 lakh fine by RBI for non-compliance with regulatory requirements.
The Reserve Bank of India (RBI) has imposed a fine of Rs 61.95 lakh on Kotak Mahindra Bank for regulatory breaches. The fine was imposed due to the bank’s failure to comply with certain regulations, including those related to know-your-customer (KYC) norms and anti-money laundering (AML) standards.
According to a statement released by the RBI, the fine was imposed after an investigation revealed that Kotak Mahindra Bank had failed to maintain sufficient records and had not properly implemented certain regulatory requirements. The bank was found to have violated several provisions of the Banking Regulation Act, 1949, and the RBI’s master circular on KYC/AML/CFT.
The RBI’s investigation also revealed that the bank had failed to properly verify the identity of its customers and had not maintained adequate records of their transactions. This is a serious breach of regulatory requirements, as it can facilitate money laundering and other illicit activities.
The fine imposed on Kotak Mahindra Bank is significant, and it highlights the importance of regulatory compliance in the banking sector. The RBI has been cracking down on banks that fail to comply with regulatory requirements, and this fine is a clear indication of the regulator’s commitment to ensuring that banks operate in a safe and sound manner.
The fine is also a reminder to other banks to ensure that they are in compliance with all regulatory requirements. The RBI has been increasing its scrutiny of banks in recent years, and any non-compliance can result in significant fines and penalties.
It’s worth noting that Kotak Mahindra Bank has not commented on the fine, and it’s not clear whether the bank plans to appeal the decision. However, the fine is a significant development, and it’s likely to have implications for the bank’s reputation and operations.
In conclusion, the RBI’s fine on Kotak Mahindra Bank is a significant development that highlights the importance of regulatory compliance in the banking sector. The fine is a reminder to other banks to ensure that they are in compliance with all regulatory requirements, and it’s a clear indication of the regulator’s commitment to ensuring that banks operate in a safe and sound manner. The fine is also a reminder that non-compliance can result in significant fines and penalties, and it’s likely to have implications for the bank’s reputation and operations.
Kotak Mahindra Bank penalized with Rs 62 lakh fine by RBI
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 61.95 lakh on Kotak Mahindra Bank for non-compliance with certain regulations. The penalty was imposed on December 11, 2025, according to an RBI statement. The fine was levied for non-compliance with directions related to basic savings bank deposit (BSBD) accounts, business correspondents, and credit information companies.
The RBI conducted a Statutory Inspection for Supervisory Evaluation (ISE 2024) of Kotak Mahindra Bank, examining its financial position as on March 31, 2024. During the investigation, the RBI found that the bank had opened additional BSBD accounts for customers who already held such accounts with the bank. This is a violation of RBI regulations, which aim to provide access to banking services for all citizens.
Furthermore, the RBI discovered that Kotak Mahindra Bank had entered into an arrangement with business correspondents to undertake activities that are not covered within the scope of allowed activities. Business correspondents are agents who provide banking services on behalf of banks, particularly in rural and underserved areas. The RBI has strict guidelines governing the activities of business correspondents to ensure that they operate within the bounds of the law.
The RBI also found that Kotak Mahindra Bank had furnished inaccurate information to credit information companies (CICs) regarding certain borrowers. CICs play a crucial role in assessing the creditworthiness of borrowers, and inaccurate information can have serious consequences for both lenders and borrowers.
After considering Kotak Mahindra Bank’s response to the notice and additional submissions, the RBI concluded that the charges against the bank were sustained, warranting the imposition of a monetary penalty. The penalty of Rs 61.95 lakh is intended to deter the bank from non-compliance with RBI regulations in the future. The RBI’s actions demonstrate its commitment to ensuring that banks operate within the bounds of the law and maintain the highest standards of integrity and transparency.
Non-Banking Financial Company Maintains Its Status as Financial Service Provider, Exempt from Lending Ban and Insolvency Proceedings Unless Initiated by RBI: National Company Law Appellate Tribunal
The National Company Law Appellate Tribunal (NCLAT) in New Delhi has made a significant ruling regarding the status of non-banking financial companies (NBFCs) in relation to insolvency proceedings. According to the tribunal, an NBFC does not lose its classification as a financial service provider simply because the Reserve Bank of India (RBI) has prohibited it from engaging in fresh lending activities. This decision implies that such entities remain exempt from creditor-initiated insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).
The ruling was made by a bench headed by a prominent judicial member, who emphasized that the RBI’s restriction on an NBFC’s lending activities does not alter its fundamental nature as a financial service provider. The tribunal’s decision was based on the understanding that the IBC provides a distinction between financial service providers and other types of corporate debtors. Financial service providers, including NBFCs, are excluded from the provisions of the IBC that allow creditors to initiate insolvency proceedings against them.
This exemption is intended to prevent disruption to the financial system and to ensure stability in the market. By maintaining that an NBFC retains its status as a financial service provider despite being barred from fresh lending, the NCLAT has reinforced the protection afforded to these entities under the IBC. The ruling suggests that the regulatory actions taken by the RBI, such as prohibiting fresh lending, do not automatically trigger the applicability of the IBC’s creditor-initiated insolvency provisions to NBFCs.
The implications of this decision are significant for the financial sector, as it clarifies the treatment of NBFCs under the IBC. It ensures that these entities are not subjected to insolvency proceedings initiated by creditors solely due to regulatory restrictions on their operations. Instead, the decision underscores the importance of considering the broader financial stability and the role of NBFCs within the financial system. The NCLAT’s ruling provides clarity and consistency in the application of the IBC to financial service providers, which is crucial for maintaining investor confidence and promoting a stable financial environment.
OneCard halts new credit card issuances amid RBI’s request for clarification from its partner banks
OneCard, a popular credit card issuer, has stopped issuing new credit cards due to regulatory issues with the Reserve Bank of India (RBI). The RBI has sought clarifications from partner banks that have collaborated with OneCard, regarding their credit card business model. As a result, OneCard has temporarily halted the issuance of new credit cards until the matter is resolved.
OneCard, which is operated by FPL Technologies, is a mobile-based credit card platform that allows users to apply for and manage their credit cards through a mobile app. The company has gained popularity in recent years due to its ease of use and innovative features. However, the RBI’s move has raised concerns about the company’s business model and its compliance with regulatory requirements.
The RBI has asked partner banks, including State Bank of India, ICICI Bank, and Axis Bank, to provide clarifications on their arrangement with OneCard. The regulator is seeking to understand how OneCard’s credit card business operates and whether it complies with existing regulations. The partner banks have been given a deadline to respond to the RBI’s queries, and until then, OneCard will not be issuing new credit cards.
The development has caused uncertainty among existing OneCard customers, who are concerned about the impact on their credit card services. However, OneCard has assured its customers that the move will not affect their existing credit card services, and they can continue to use their cards as usual.
The RBI’s move is seen as a regulatory crackdown on new-age credit card issuers, which have been growing rapidly in recent years. The regulator is seeking to ensure that these companies comply with existing regulations and do not pose a risk to the financial system. The development highlights the challenges faced by fintech companies in India, which often operate in a gray area between traditional banking regulations and innovative business models.
In conclusion, OneCard’s decision to stop issuing new credit cards is a temporary measure until the regulatory issues are resolved. The company is working with its partner banks to address the RBI’s concerns and ensure that its business model complies with existing regulations. The development highlights the importance of regulatory compliance for fintech companies in India and the need for clear guidelines on innovative business models.
IDFC First Bank’s Gaura Sengupta predicts a potential slowdown in the rupee’s depreciation in the fourth quarter, offering some relief from recent pressure.
The Reserve Bank of India (RBI) is facing a dilemma, known as the “impossible trinity,” where it must choose between maintaining a stable currency or implementing effective monetary policy. According to economist Sengupta, the RBI has wisely chosen to prioritize monetary policy, allowing the rupee to depreciate rather than intervening heavily to prop up its value. This approach has several benefits, including reducing the strain on foreign exchange reserves and maintaining liquidity in the domestic banking system.
When the RBI intervenes to buy rupees, it absorbs liquidity from the system, which can have negative consequences. By not intervening as much, the RBI is able to preserve its freedom to implement monetary policy as needed. This approach is also sustainable in the long term, as the RBI has limited resources and cannot indefinitely support the currency. The pace of depreciation, which has been around 5% year-on-year, suggests that the RBI is allowing the rupee to adjust to market forces.
The RBI’s intervention strategy is also constrained by its limited toolkit. Last year, the rupee was one of the most stable currencies globally, thanks to the RBI’s intervention. However, this came at a cost, as the central bank built up a large short-dollar forward book, which can be used to sterilize intervention in spot markets. This year, the RBI does not have the same level of forward book, limiting its ability to intervene in the currency market.
Overall, the RBI’s approach to managing the rupee’s depreciation is pragmatic and recognizes the limitations of its resources. By prioritizing monetary policy and allowing the currency to adjust to market forces, the RBI is taking a sustainable and long-term view. While the rupee’s depreciation may be a short-term concern, the RBI’s approach is likely to benefit the economy in the long run by preserving its ability to implement effective monetary policy and maintaining stability in the financial system.
Dhanlaxmi Bank and Jana Small Finance Bank Hike Fixed Deposit Rates, Offering Up to 8% Interest for Senior Citizens
The Reserve Bank of India’s (RBI) monetary policy committee (MPC) meeting is set to take place from December 3-5, 2025. Ahead of this meeting, two banks, Dhanlaxmi Bank and Jana Small Finance Bank (SFB), have revised their fixed deposit (FD) rates. As of November 29, 2025, these banks have updated their interest rates to offer higher returns to their customers, particularly senior citizens.
Dhanlaxmi Bank and Jana Small Finance Bank have increased their FD rates to provide senior citizens with interest rates of up to 8% on their deposits. This move is expected to attract more customers, especially seniors, to invest in fixed deposits. The revised rates are competitive and aim to provide higher returns to depositors.
The revision in FD rates by these two banks may be a precursor to other banks following suit. With the RBI’s MPC meeting scheduled to take place soon, there is anticipation about potential changes in interest rates. The MPC meeting will discuss and decide on key policy rates, which can impact the overall interest rate environment in the country.
The increase in FD rates by Dhanlaxmi Bank and Jana Small Finance Bank is a strategic move to stay competitive in the market. Other banks may also consider revising their FD rates to remain attractive to customers. The revised rates offered by these two banks are likely to benefit senior citizens, who often rely on fixed deposits as a safe and stable investment option.
In the current economic scenario, the revision in FD rates is a significant development. With the RBI’s MPC meeting approaching, market participants are eagerly awaiting the decision on interest rates. The outcome of the meeting will have a significant impact on the economy, and the revision in FD rates by Dhanlaxmi Bank and Jana Small Finance Bank may be an indication of the direction in which the interest rates are headed. Overall, the increase in FD rates is a positive development for customers, particularly senior citizens, who can now earn higher returns on their deposits.
Financial strain and deteriorating loan portfolios threaten the stability of small microfinance institutions
India’s microfinance sector is facing a severe crisis, with at least half a dozen companies defaulting on bank loans due to asset quality stress and funding crunch. These companies, including VFS Capital, Navachetana Microfin Services, and Arth Finance, are struggling to survive due to a liquidity crunch and difficulties in operating without institutional funding support. The sector’s stress began building in April last year, after a brief revival from the pandemic, and has resulted in a significant increase in late-stage portfolios at risk, with a surge to 15.32% at the end of the September quarter.
The micro-loan market has contracted to ₹3.46 lakh crore, registering a 17% year-on-year drop, with a near 20% fall in the number of active loans to 132 million. Listed microfinance firms, such as Fusion Finance and Spandana Sphoorty Financial, have suffered net losses in the second quarter, extending the run of negative earnings they reported over the past several quarters. Mainstream lenders, including Bandhan Bank, IndusInd Bank, IDFC First Bank, and RBL Bank, have also encountered profitability hits due to the stress in their microfinance portfolios.
VFS Capital, which has a cumulative exposure of ₹143 crore toward five lenders, failed to meet its repayment commitments, with a total overdue amount of ₹82 crore. The company had applied for a small finance bank licence from the Reserve Bank of India (RBI) in January but withdrew it last month after its financial condition worsened. Other affected lenders, including Bank of Maharashtra and IDBI Bank, have told VFS to submit financial statements and a certified book debt statement for the quarters ended June and September.
The situation is similar for Navachetana Microfin Services, which has delayed debt servicing since April and submitted a debt restructuring plan to lenders with the proposal to repay the dues in the next seven years. Some of the company’s loans from banks have already turned into non-performing assets (NPAs) by legal definition. Lenders to these entities have suggested forensic audits to determine the cause of the default and to consider restructuring of bank accounts.
Sectoral leaders are calling for financial institutions to become more lenient while lending to smaller microfinance entities and are expecting the government to consider a proposal to provide a guarantee fund for the microfinance sector. Without institutional funding, several other small lenders are likely to be on the brink of default very soon. The government guarantee programme can facilitate lending to these entities and help them overcome the current liquidity crisis.
Autonomy, Increased Foreign Investment, and Mergers Under Consideration
The Indian government is set to review proposals to reform public sector banks (PSBs) ahead of the 2026-27 Budget. The Department of Financial Services has crafted a reform blueprint that includes a fresh round of consolidation, enhanced board autonomy, and a phased increase in the foreign direct investment (FDI) cap. The government may also consider privatizing select PSBs, a plan that was first announced in the 2021-22 Budget. The goal is to create globally competitive Indian banks that can rank among the world’s top 20.
The proposed reforms aim to build on the consolidation wave of 2017 and 2019-20, which reduced the number of PSBs from 27 to 12. The government is expected to revive its push for PSB reforms, with inter-ministerial consultations nearing completion. The Prime Minister’s Office (PMO) will review the proposals, and key political decisions are expected to be made closer to the Budget.
The reform agenda includes a phased plan to raise the FDI limit to 49% from the current 20%. This move is expected to attract more foreign investment and help Indian banks compete globally. The government may also consider privatizing two PSBs, as announced in the 2021-22 Budget. Analysts believe that larger, consolidated banks will benefit from economies of scale, stronger risk management, and greater capacity to meet India’s growing credit demand.
The reform agenda has received cautious backing from both the government and the Reserve Bank of India (RBI). The vision for PSBs aligns with discussions during the finance ministry’s recent “Manthan” strategy exercise. The government aims to create two Indian lenders that can rank among the world’s top 20, and the proposed reforms are seen as a step towards achieving this goal. Overall, the reform proposals are expected to have a significant impact on the Indian banking sector and help create globally competitive banks that can support the country’s growing economy.
Ndi RBI eme ihe ndi mere ka ego ha aga n’ihu na Tamilnad Mercantile Bank Limited.
Reserve Bank of India (RBI) amachibidola ntaramahụhụ ego nke Rs 39.60 lakh na Tamilnad Mercantile Bank Limited maka mmebi iwu nke ngalaba 10A nke Payment and Settlement Systems Act, 2007 (PSS Act) na ngalaba 26A nke iwu ụlọ akụ. Ntaramahụhụ a bụ n’ihi na ụlọ akụ ahụ etinyela ụgwọ n’ụzọ na-edoghị anya na ndị na-ejide akaụntụ ego nke Basic Savings Bank Deposit (BSBD) maka ịkwụ ụgwọ site na iji Unified Payments Interface (UPI), na ebufebeghị ego tozuru oke na ego mmụta na nkuzi nkwụnye ego n’ime oge enyere.
RBI chọpụtara na ebubo ndị a megide ụlọ akụ ahụ kwụgidere, na-enye ikike itinye ntaramahụhụ ego. Ntaramahụhụ ego a bụ enweghị ajọ mbunobi maka ihe ọ bụla ọzọ RBI nwere ike ịmalite megide ụlọ akụ ahụ. Omume a gbadoro ụkwụ na erughị eru na nnabata nke iwu na ebughị n’obi kwupụta izi ezi nke azụmahịa ma ọ bụ nkwekọrịta ọ bụla ụlọ akụ na ndị ahịa ya banye.
Ntaramahụhụ ego a bụ akụkụ nke mmelite RBI na-amalite megide ụlọ akụ ndị na-eme ihe na-edoghị anya na ndị na-ejide akaụntụ ego. RBI na-achọ ime ka ụlọ akụ ndị na-eme ihe na-edoghị anya na ndị na-ejide akaụntụ ego kwụsị omume ha na-edoghị anya na kwado iwu na ụkpụrụ ndị dị.
Na mgbakwunye, RBI na-achọ kwalite uru na nchebe nke ndị na-ejide akaụntụ ego na ụlọ akụ. Ntaramahụhụ ego a bụ akụkụ nke mmelite RBI na-amalite megide ụlọ akụ ndị na-eme ihe na-edoghị anya na ndị na-ejide akaụntụ ego, na-achọ ime ka ụlọ akụ ndị na-eme ihe na-edoghị anya na ndị na-ejide akaụntụ ego kwụsị omume ha na-edoghị anya na kwado iwu na ụkpụrụ ndị dị.
Can Rising Interest Rates Erode Tamilnad Mercantile Bank Limited’s Profitability? – Expert Analysis and Insights for Wealth Creation – earlytimes.in
The article from Early Times discusses the potential impact of rising interest rates on Tamilnad Mercantile Bank Limited’s profit margins. The bank, a prominent private sector lender in India, has been experiencing a surge in volume and profitability in recent times. However, with the Reserve Bank of India (RBI) increasing interest rates to combat inflation, there are concerns about the potential effects on the bank’s profit margins.
Rising interest rates can have both positive and negative impacts on banks. On the one hand, higher interest rates can lead to increased net interest income (NII) for banks, as they can charge higher interest rates on loans and investments. On the other hand, higher interest rates can also lead to a decrease in demand for loans, as borrowing becomes more expensive for customers. This can result in a decrease in the bank’s loan book and, consequently, its NII.
The article highlights that Tamilnad Mercantile Bank Limited has been able to maintain its profit margins despite the challenging economic environment. The bank’s focus on retail lending and its strong presence in the southern region of India have helped it to navigate the challenges posed by rising interest rates. Additionally, the bank’s efforts to diversify its loan portfolio and reduce its dependence on wholesale lending have also contributed to its resilience.
However, the article also notes that the bank’s profit margins may come under pressure if interest rates continue to rise. The bank’s net interest margin (NIM) has been under pressure in recent quarters, and a further increase in interest rates could exacerbate this trend. Moreover, the bank’s provisioning requirements may also increase if the economic slowdown leads to an increase in non-performing assets (NPAs).
To navigate these challenges, the article suggests that investors should keep a close eye on the bank’s volume growth and asset quality. The bank’s ability to maintain its loan growth momentum and control its NPAs will be crucial in determining its profitability in the coming quarters. Additionally, investors should also monitor the bank’s efforts to diversify its revenue streams and reduce its dependence on interest income.
In conclusion, while rising interest rates pose a challenge to Tamilnad Mercantile Bank Limited’s profit margins, the bank’s strong fundamentals and diversified loan portfolio position it well to navigate these challenges. Investors should closely monitor the bank’s volume growth, asset quality, and efforts to diversify its revenue streams to make informed investment decisions. With the right strategy, the bank can continue to deliver strong profitability and growth, making it an attractive investment opportunity for those looking to build wealth rapidly.
Ujjivan needs to undergo a transformation to become eligible for a universal banking licence
Ujjivan Financial Services, a leading microfinance institution in India, is on the cusp of a significant transformation. To obtain a universal banking licence, the company must undergo a radical change in its DNA. This transformation is crucial for Ujjivan to expand its services and stay competitive in the rapidly evolving Indian banking landscape.
Currently, Ujjivan operates as a microfinance institution, providing small loans to low-income individuals and groups. However, with a universal banking licence, the company can offer a broader range of financial services, including savings accounts, credit cards, and other banking products. This expansion will enable Ujjivan to tap into the vast and growing Indian banking market, which is expected to reach $1.2 trillion by 2025.
To achieve this transformation, Ujjivan must make significant changes to its business model, operations, and culture. The company will need to invest heavily in technology, talent, and infrastructure to support its expanded services. This will require a substantial increase in capital expenditure, which may put pressure on the company’s bottom line in the short term.
Moreover, Ujjivan will need to adapt to a more complex regulatory environment, as universal banks are subject to stricter regulations and guidelines. The company will need to ensure that its systems, processes, and risk management practices are robust and compliant with the Reserve Bank of India’s (RBI) guidelines.
The transformation will also require a cultural shift within the organization. Ujjivan’s employees will need to develop new skills and expertise to support the expanded services, and the company’s leadership will need to adopt a more nuanced approach to risk management and customer engagement.
Despite the challenges, the potential benefits of obtaining a universal banking licence are significant. Ujjivan can increase its customer base, improve its revenue streams, and enhance its brand reputation. The company can also leverage its existing network and customer relationships to cross-sell and upsell its new services, driving growth and profitability.
In conclusion, Ujjivan’s transformation into a universal bank is a bold and ambitious move that requires significant changes to its DNA. While the journey will be challenging, the potential rewards are substantial. With careful planning, investment, and execution, Ujjivan can successfully navigate this transformation and emerge as a major player in the Indian banking sector. The company’s ability to adapt and evolve will be crucial in determining its success in this new chapter of its journey.
Kotak Mahindra Bank Confirms the Reappointment of its Part-Time Chairman
The Reserve Bank of India (RBI) has approved the reappointment of C S Rajan as Part-Time Chairman of Kotak Mahindra Bank Limited for a further period from January 1, 2026, to October 21, 2027. This decision ensures continuity in leadership and governance as the bank continues on its strategic growth path. Mr. Rajan has been serving as Part-Time Chairman since January 1, 2024, and has been an Independent Director on the Board of the Bank since October 22, 2022.
Ashok Vaswani, Managing Director & CEO of Kotak Mahindra Bank, welcomed the decision, stating that the bank is at an exciting juncture of growth and transformation, and looks forward to Mr. Rajan’s continued leadership and strategic vision to deliver sustainable value to stakeholders. Mr. Rajan expressed his honor to continue serving as Chairman and looks forward to working closely with the Board and management to strengthen the bank’s position and deliver value to all stakeholders.
Mr. Rajan is an accomplished leader with 46 years of experience in public life. He is a Post Graduate in History and an IAS officer of the 1978 batch, who retired as the Chief Secretary of the Government of Rajasthan in 2016. He has served in leadership roles for 12 years in key infrastructure sectors, including energy, highways, water resources, and industry. He has also served on inter-disciplinary teams for review of World Bank agriculture projects and as a consultant to the World Bank.
After his retirement, Mr. Rajan served as Deputy Chairman in the Chief Minister of Rajasthan’s Advisory Council and was appointed by the Government of India on the Board of Infrastructure Leasing and Financial Services Limited (IL&FS). He has also been an Independent Director on the Board of Kotak Mahindra Life Insurance Company Limited, a wholly-owned subsidiary of the bank. With his rich experience and expertise, Mr. Rajan’s reappointment is expected to bring stability and guidance to the bank as it navigates its next phase of growth and transformation.
C S Rajan’s reappointment as part-time Chairman of Kotak Mahindra Bank gets RBI nod
The Reserve Bank of India (RBI) has approved the reappointment of C S Rajan as Part-Time Chairman of Kotak Mahindra Bank Limited for a term starting January 1, 2026, and ending October 21, 2027. Rajan has been serving as Part-Time Chairman since January 1, 2024, and was initially appointed as an Independent Director on the Bank’s Board in October 2022.
Ashok Vaswani, Managing Director and CEO of Kotak Mahindra Bank, welcomed the RBI’s approval, stating that the bank is at an exciting juncture of growth and transformation, and that Rajan’s continued leadership and strategic vision will be valuable in delivering sustainable value to stakeholders. Rajan expressed gratitude for the continued trust placed in him and looks forward to working closely with the Board and management to strengthen the Bank’s position and deliver value to all stakeholders.
Rajan’s career spans over four decades in public service and corporate leadership. He is an accomplished leader with 46 years of experience in public life, having retired as the Chief Secretary of the Government of Rajasthan in 2016. During his career, he served in leadership roles for 12 years in key infrastructure sectors and 14 years in agriculture and rural development.
After retirement, Rajan continued to play key roles in governance and corporate restructuring, serving as Deputy Chairman of the Chief Minister of Rajasthan’s Advisory Council and later joining the Government of India-appointed Board of Infrastructure Leasing and Financial Services Limited (IL&FS). He also serves as an Independent Director on the Board of Kotak Mahindra Life Insurance Company Limited, a wholly-owned subsidiary of the Bank.
Rajan’s reappointment as Part-Time Chairman is expected to bring stability and continuity to the Bank’s leadership, allowing it to navigate its next phase of growth and transformation. With his extensive experience in public service and corporate leadership, Rajan is well-equipped to guide the Bank in delivering sustainable value to its stakeholders. The Bank’s management and Board look forward to his continued leadership and strategic vision, which will be crucial in shaping the Bank’s future growth and success.
The Reserve Bank of India has given its nod to reappoint C S Rajan as the part-time Chairman of Kotak Mahindra Bank.
The Reserve Bank of India (RBI) has approved the reappointment of C S Rajan as Part-Time Chairman of Kotak Mahindra Bank Limited for another term, starting from January 1, 2026, until October 21, 2027. Rajan has been serving as Part-Time Chairman since January 1, 2024, and was initially appointed as an Independent Director on the Bank’s Board in October 2022. The announcement was made by Kotak Mahindra Bank in an official press release, marking a continuation of Rajan’s leadership at the private lender.
Ashok Vaswani, Managing Director and CEO of Kotak Mahindra Bank, expressed his appreciation for Rajan’s continued leadership, stating that the bank is at an exciting juncture of growth and transformation. Vaswani added that Rajan’s strategic vision will help the bank deliver sustainable value to its stakeholders. Rajan, in turn, expressed his gratitude for the continued trust placed in him and looks forward to working closely with the Board and management to further strengthen the bank’s position.
Rajan’s reappointment extends a career that spans over four decades in public service and corporate leadership. He is a postgraduate in History and has 46 years of experience in public life, including 12 years in key infrastructure sectors and 14 years in agriculture and rural development. After retiring as the Chief Secretary of the Government of Rajasthan in 2016, Rajan continued to play key roles in governance and corporate restructuring, including serving as Deputy Chairman of the Chief Minister of Rajasthan’s Advisory Council and holding senior positions at Infrastructure Leasing and Financial Services Limited (IL&FS).
In addition to his role at Kotak Mahindra Bank, Rajan also serves as an Independent Director on the Board of Kotak Mahindra Life Insurance Company Limited, a wholly-owned subsidiary of the bank. With his extensive experience and leadership skills, Rajan is well-positioned to guide Kotak Mahindra Bank through its next phase of growth and transformation. The bank’s management and stakeholders are likely to benefit from his continued leadership and strategic vision, as the bank navigates the evolving landscape of the Indian banking industry.
The Reserve Bank of India has released a draft circular proposing the implementation of a Unique Transaction Identifier for over-the-counter derivative transactions within the country.
The Reserve Bank of India (RBI) has introduced a draft circular proposing the implementation of a Unique Transaction Identifier (UTI) framework for over-the-counter (OTC) derivative transactions in India. The UTI is a globally recognized data element that will provide a uniform identification system for all transactions, enhancing transparency and regulatory oversight in the OTC derivatives market. The UTI will be used in addition to the Legal Entity Identifier (LEI), which identifies counterparties to a transaction, and will contain a maximum of 52 characters, starting with the LEI of the entity responsible for creating it.
The governing directions for OTC derivative transactions, as listed in the draft circular, include the Foreign Exchange Management Regulations, the Master Direction on Risk Management and Inter-Bank Dealings, the Rupee Interest Rate Derivatives Directions, the Forward Contracts in Government Securities Directions, and the Credit Derivatives Directions. The UTI will be generated by the Central Counterparty, Electronic Trading Platform, or Clearing Member, depending on the nature of the transaction, and will be mandatory for all OTC derivative transactions in India, including rupee interest rate derivatives, forward contracts in government securities, foreign currency derivatives, and credit derivatives.
The RBI has proposed that each OTC derivative transaction must have a UTI generated and reported in accordance with the CPMI-IOSCO Technical Guidance of February 2017. Modifications to derivative contract information will be treated as updates and will not require a new UTI, but lifecycle events such as novation will result in the generation of a new UTI. The RBI has invited comments and suggestions on the draft circular from banks, market participants, and other stakeholders by November 14, 2025, and the framework is set to take effect from April 1, 2026.
The introduction of the UTI framework is a significant step towards enhancing transparency and regulatory oversight in the OTC derivatives market in India. It will provide regulators with an aggregated view of global OTC derivatives exposures and enable more effective monitoring and supervision of the market. The RBI’s move is in line with global best practices and is expected to bring India’s OTC derivatives market in line with international standards. The draft circular is open for feedback, and stakeholders are encouraged to provide their comments and suggestions to help shape the final framework. Overall, the implementation of the UTI framework is a positive development for the Indian financial markets and is expected to promote greater transparency and stability in the OTC derivatives market.