Banking & Finance

The Securities and Exchange Board of India notified the SEBI (Mutual Funds) Regulations, 2026, effective from April 1, 2026, replacing the earlier SEBI (Mutual Funds) Regulations, 1996. Alongside, SEBI released a comprehensive Master Circular dated March 20, 2026, consolidating all existing circulars, guidelines, and directives applicable to mutual funds into a single reference document. Together, these instruments create a modernised regulatory framework for India's rapidly

The Reserve Bank of India issued the Commercial Banks Credit Facilities Amendment Directions, 2026, which came into force on April 1, 2026. These directions introduce a dedicated framework governing how commercial banks may extend credit facilities to capital market intermediaries, including stock brokers, clearing members, custodians, and market makers. The framework imposes strict collateral requirements and lending conditions designed to reduce systemic risk at the interse

From April 1, 2026, the Securities and Exchange Board of India's new algorithmic trading framework has become fully mandatory for all stock brokers operating in India. The framework brings retail algo trading under formal regulatory oversight for the first time, requiring brokers to register all algorithmic strategies, implement pre-trade risk controls, and maintain detailed audit trails. As algorithmic orders now account for a substantial share of equity market volumes in In

The Union Budget 2026 announced a comprehensive review of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules), which govern the inflow and regulation of foreign direct investment (FDI) in India. The NDI Rules, notified under the Foreign Exchange Management Act, 1999 (FEMA), prescribe the entry routes, sectoral caps, pricing guidelines, and compliance requirements for foreign investment in equity instruments of Indian companies. A comprehensive revie

Know Your Customer (KYC) compliance remains one of the most operationally intensive regulatory obligations for banks, non-banking financial companies (NBFCs), and fintech platforms in India. The Reserve Bank of India's Master Direction on KYC, originally issued in 2016 and subsequently amended multiple times, has been further updated in 2026 to address emerging risks in digital onboarding, beneficial ownership identification, and ongoing due diligence for high-risk customers.

Effective 1 April 2026, the Securities and Exchange Board of India (SEBI) has implemented a revised margin framework for Futures and Options (F&O) trading that significantly changes the collateral requirements for market participants. Under the new rules, traders must maintain a minimum of 50 percent of their total margin collateral in the form of cash or cash equivalents such as bank guarantees. Simultaneously, the Reserve Bank of India has introduced stricter rules on broke

The Reserve Bank of India has notified the Reserve Bank of India (Non-Banking Financial Companies, Internal Ombudsman) Directions, 2026, mandating that specified categories of NBFCs appoint an Internal Ombudsman (IO) to handle customer complaints that remain unresolved at the first level of the company's grievance redressal mechanism. This builds on RBI's broader consumer protection architecture, which already requires scheduled commercial banks to maintain an Internal Ombuds

Effective 1 April 2026, the Reserve Bank of India has doubled the collateral-free loan limit for Micro and Small Enterprises (MSEs) from Rs 10 lakh to Rs 20 lakh. This change, implemented through an amendment to RBI's Master Directions on lending to MSEs, is part of a broader policy push to improve credit access for India's smallest businesses without burdening them with the requirement to pledge assets as security. For MSE owners, banks, non-banking financial companies (NBFC

India's commitment to international commercial arbitration depends on predictable enforcement of foreign arbitral awards. Yet the threshold for refusing enforcement based on public policy has long remained uncertain, creating risk for award-creditors and ambiguity for courts. In March 2026, the Supreme Court clarified this critical issue: a foreign arbitral award cannot be challenged on public policy grounds in India if the seat court has already decisively ruled on that issu

Environmental, Social, and Governance (ESG) disclosure has moved from a voluntary practice to a regulatory mandate in India. The Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Reporting (BRSR) Core framework to standardize and strengthen ESG reporting by India's largest listed companies. This framework represents a significant shift in corporate accountability, requiring top-tier listed companies to respond to 140 struc

The Reserve Bank of India's Commercial Banks Credit Facilities Amendment Directions, 2026, effective April 1, 2026, introduce a dedicated regulatory framework governing bank lending to capital market intermediaries. The category of capital market intermediaries covered includes stock brokers, clearing members, custodians, and market makers. Until now, bank lending to these entities was governed by general credit exposure norms without a specific framework tailored to the natu

The Reserve Bank of India's Non-Banking Financial Companies Amendment Directions, 2026, effective April 1, 2026, introduce a new classification called the Unregistered Type I NBFC. This category is designed to carve out a class of financial entities that have historically been required to register with the RBI under the NBFC framework but whose activities are sufficiently limited in risk profile to justify an exemption from registration requirements. The amendment is part of

In late March 2026, the Reserve Bank of India directed all banks operating in India to ensure that their net open position in the onshore deliverable foreign exchange market does not exceed $100 million at the end of each business day, with a compliance deadline of April 10, 2026. The direction marks the first time since 2011 that the RBI has explicitly set a hard ceiling on how much currency risk a bank can carry in the onshore market. The move has triggered significant mark

From April 1, 2026, the Reserve Bank of India has made two-factor authentication mandatory for all digital payment transactions in India. The directive covers UPI payments, debit and credit card transactions, and mobile wallet operations. The change represents one of the most significant overhauls to India's digital payment security framework in recent years, and it carries compliance obligations for every bank, payment aggregator, fintech company, and merchant that processes

In Gayatri Balasamy v. M/S ISG Novasoft Technologies Limited, decided on 30 April 2025, a five-judge Constitution Bench of the Supreme Court of India resolved a longstanding controversy: whether a court hearing a challenge under Section 34 of the Arbitration and Conciliation Act, 1996 can modify an arbitral award, or whether its jurisdiction is limited to setting the award aside in whole or in part. By a 4:1 majority, the Bench held that courts possess a limited power to modi

The Reserve Bank of India introduced significant amendments to the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016, effective from April 2026, streamlining export-import documentation and compliance requirements for businesses engaged in international trade. These amendments replace the earlier system of multiple separate export declaration forms with a unified Export Declaration Form (EDF), significantly reducing administrative burden while enha

The Reserve Bank of India released a draft of the Commercial Banks Responsible Business Conduct Second Amendment Directions 2026, introducing the most comprehensive borrower protections in India's debt recovery regime. These directions address a longstanding pain point for Indian borrowers: aggressive, harassment-laden collection practices by recovery agents. The new rules require lenders to disclose recovery agent identities and contact details on demand, prohibit collection

In December 2025, the Securities and Exchange Board of India approved a comprehensive overhaul of mutual fund regulations, replacing the 1996 framework that had governed the industry for nearly three decades. These new regulations represent a watershed moment for India's asset management industry, introducing stricter transparency requirements, restructured fee arrangements, and enhanced investor protections. Understanding these changes is essential for asset management compa

The Reserve Bank of India has cancelled the Certificates of Registration of 35 Non-Banking Financial Companies for non-compliance with regulatory requirements, effective from January 2026. The affected entities are no longer permitted to carry on the business of a non-banking financial institution. This enforcement action is part of the RBI's ongoing effort to rationalise the NBFC sector, remove non-functional or non-compliant entities from the register, and ensure that only

The Reserve Bank of India has issued revised draft guidelines on the Liquidity Coverage Ratio for scheduled commercial banks, proposing significant changes to the run-off factors applied to different categories of deposits and funding. The LCR is one of the two key liquidity standards introduced under the Basel III framework and requires banks to hold a sufficient stock of unencumbered high-quality liquid assets to cover net cash outflows over a 30-day stress period. The prop