International Trade Settlement in Indian Rupees (INR)
- Provision: RBI allows AD Category-I Banks to open Special Rupee Vostro Accounts (SRVAs) of foreign banks without prior RBI approval.
- Effective: Immediate.
- Purpose: To promote INR-based international trade settlement.
Reserve Bank of India (Co-Lending Arrangements) Directions, 2025
Applicability:
- Commercial Banks (excluding SFBs, LABs, RRBs), All-India FIs, NBFCs (including HFCs).
Effective Date:
- From January 1, 2026 (or earlier if decided by the entity).
Definition:
- Co-lending: Two regulated entities jointly fund loans in agreed proportions, sharing risks and revenues.
Key Guidelines:
- Each RE must retain minimum 10% of each loan on its books.
- Must include co-lending provisions in credit policy.
- Borrower must know single point of contact.
- Priority Sector Loans: Each RE can claim PSL status for its share.
- NBFCs to deduct unrealised profit from capital till maturity.
Interest & Charges:
- Borrower pays blended interest rate (weighted average of both REs’ rates).
- Extra charges to be disclosed in Key Facts Statement (KFS).
- No hidden credit enhancements or guarantees unless permitted.
Operational Arrangements:
- Partner RE must take share within 15 days of disbursement.
- All transactions via escrow account.
- Both REs maintain separate borrower accounts.
- Must ensure business continuity for borrowers even if CLA ends.
Default Loss Guarantee (DLG):
- Originating RE may give up to 5% DLG of outstanding loans (as per Digital Lending rules).
Asset Classification:
- Borrower-level classification mandatory.
- If one marks SMA/NPA → other must do the same.
Disclosures:
- Must publish list of CLA partners on website.
- In financial statements, report: total CLAs, interest rate, fees, sectors, DLG, etc. (Quarterly/Annual).
Reserve Bank of India (Non-Fund Based Credit Facilities) Directions, 2025
Applicability:
- Commercial Banks (incl. RRBs, LABs), Co-operative Banks (UCBs, StCBs, CCBs), AIFIs, and NBFCs/HFCs (Middle Layer & above) for PCE only.
Coverage:
- Guarantees, Letters of Credit, Co-acceptances, etc. (Excludes derivatives).
General Rules:
- Must be part of RE’s credit policy.
- Usually given only to borrowers with fund-based facility (exceptions allowed).
- Not to guarantee deposits/bonds unless permitted.
- If devolves into fund-based exposure → apply loan norms.
Guarantees:
- Must be irrevocable, unconditional, and incontrovertible.
- For UCBs/RRBs etc.:
- Total guarantees ≤ 5% of assets.
- Unsecured guarantees ≤ 1.25% (to comply by April 1, 2027).
- Electronic guarantees allowed with SOPs and audit checks.
Co-Acceptances:
- Only genuine trade bills; goods must be received and verified.
Partial Credit Enhancement (PCE):
- Allowed for corporate/SPV/municipal bonds and large NBFC/HFC bonds (₹1,000+ crore).
- Bonds must be rated BBB- or above (by 2 agencies).
- Single RE ≤ 50%, all REs combined ≤ 50% of issue.
- Total PCE ≤ 20% of Tier 1 capital.
- PCE repayment due within 30 days, else NPA after 90 days.
Disclosures:
- Split secured/unsecured, domestic/overseas guarantees, acceptances, and PCE details in financial statements.
Investment in Government Securities via SRVAs
- Foreign entities with Special Rupee Vostro Accounts can invest surplus INR in Central Government Securities, including T-Bills.
- Promotes rupee internationalization and capital inflow.
Continuous Clearing & Settlement in Cheque Truncation System (CTS)
New System: Continuous clearing instead of batch processing.
Phases:
- Phase 1: Oct 4, 2025
- Phase 2: Jan 3, 2026
Process Highlights:
- Cheques scanned & sent continuously (10 AM–4 PM).
- Real-time confirmation (10 AM–7 PM).
- Phase 1: Confirm by 7 PM → else deemed approved.
- Phase 2: Confirm within T+3 hours → else deemed approved.
- Hourly settlement from 11 AM onwards.
- Customers to receive credit within 1 hour of settlement.
Compliance with Supreme Court Orders on Accessibility (April 30, 2025)
Cases:
- Pragya Prasun & Ors. vs Union of India (W.P.(C) 289/2024)
- Amar Jain vs Union of India & Ors. (W.P.(C) 49/2025)
Ruling:
- Inaccessible digital KYC systems violate Article 21 (Right to Life & Dignity).
- RBI & regulators to ensure reasonable accommodation for PwDs in digital services.
RBI (KYC) (2nd Amendment) Directions, 2025
Key Changes:
- Accessibility for Persons with Disabilities (PwDs).
- Mandatory reasons for KYC rejection.
- Introduced Aadhaar Face Authentication.
- Safeguards to avoid exclusion during liveness checks.
- Clarified coverage for large/connected transactions.
Implementation of Section 51A of UAPA, 1967
- Updated UNSC 1267/1989 ISIL (Da’esh) & Al-Qaida Sanctions List – 5 entries amended.
- REs must ensure real-time compliance with updated lists.
Monetary Policy Committee (MPC) – August 2025 Review
Rates (Unchanged):
- Repo Rate: 5.50%
- SDF: 5.25%
- MSF & Bank Rate: 5.75%
Projections:
- GDP Growth (2025–26): 6.5%
- Q1: 6.5%, Q2: 6.7%, Q3: 6.6%, Q4: 6.3%
- CPI Inflation (2025–26): 3.1% (Q2: 2.1%, Q3: 3.1%, Q4: 4.4%)
- CAD: 0.6% of GDP (↓ from 0.7% last year)
- System Liquidity: Surplus ₹3.0 lakh crore/day (vs ₹1.6 lakh crore earlier).