Recent 6 months news in Banking

The Ministry of Micro, Small and Medium Enterprises (MSME) has mandated that all Central Public Sector Enterprises (CPSEs) must route the settlement of invoices related to procurement from MSMEs through the Trade Receivables Discounting System (TReDS).

The TReDS mechanism has been progressively expanded, starting with mandatory onboarding for CPSEs and companies with a turnover above ₹500 crore in 2018. The threshold was lowered to ₹250 crore in 2024, and mandatory TReDS settlement will be implemented from June 30, 2026.

According to the Ministry of MSME, invoice financing through the TReDS platform has grown from ₹40,000 crore in FY22 to ₹3.47 trillion in FY26. It is to be noted that the TReDS is an electronic platform regulated by the RBI that facilitates the financing and discounting of trade receivables of MSMEs by multiple financiers.

The State Bank of India (SBI) has divested a 1.42% equity stake in its asset management subsidiary, SBI Funds Management Ltd (SBIFM), for ₹1,655 crore.

The stake was sold to 30 institutional investors through a pre-Initial Public Offering (IPO) placement.

TPG Inc. has signed agreements to acquire a 100% stake in Aseem Infrastructure Finance Ltd (AIFL) from the National Investment and Infrastructure Fund (NIIF) and other shareholders.

The acquisition is being executed through TPG Rise Climate, the climate investing platform of TPG. The transaction is undertaken in partnership with the Government of Singapore Investment Corporation (GIC) and ICICI Bank Ltd. Upon completion, ICICI Bank will hold an equity stake of up to 5% in AIFL.

The RBI has approved the appointment of Mahesh Muralidhar Pai as the MD & CEO of the South Indian Bank (SIB) for a 3-year term, effective from October 2026. He succeeds PR Seshadri.

RBI has imposed a monetary penalty of ₹63.6 lakh on the Bank of Baroda (BoB) for charging interest rates higher than the contracted rates, failing to upload Know Your Customer (KYC) records to the Central KYC Records Registry (CKYCR) within the stipulated timelines, and non-compliance with the 'Fair Practices Code'.

The central bank has also imposed a penalty of ₹3.1 lakh on GIC Housing Finance due to deficiencies in compliance with KYC guidelines.

Paytm Europe Payments SA, the European arm of One97 Communications, has secured a Payment Institution (PI) licence from the Commission de Surveillance du Secteur Financier (CSSF), the financial regulator of Luxembourg.

The licence, effective from July 2, 2026, allows the company to offer regulated payment services across the European Economic Area (EEA).

The State Bank of India (SBI) has acquired a 10% stake in the RMBS Development Company Limited (RDCL), an entity focused on residential mortgage-backed securitisation.

Following this transaction, the shareholding of the National Housing Bank (NHB) in the RDCL has declined from 39% to 29%.

Bank of Baroda has signed a strategic partnership with Mizuho Bank, the banking arm of the Japanese Mizuho Financial Group, to enhance cooperation in Mergers and Acquisitions (M&A) financing and other financial services.

The Insurance Regulatory and Development Authority of India (IRDAI) has granted the final (R3) Certificate of Registration (CoR) to Prudential HCL Health Insurance Ltd. It is a joint venture (JV) between the Prudential Group of the UK (70% stake) and the HCL Group of India (30% stake). With this, the company becomes the 8th standalone health insurer in India.

It is to be noted that regulatory guidelines mandate a minimum paid-up equity capital of ₹100 crore for an Indian insurance company or a Limited Liability Partnership (LLP) registered under the LLP Act, 2008.

Punjab & Sind Bank (PSB) celebrated its 119th Foundation Day in New Delhi. During the event, the bank unveiled several digital banking initiatives, including the 'Navjyoti' mobile application and the 'PSB Bharat Connect' account. Additionally, the bank launched a revised Vision and Mission statement.

PayGlocal, an Indian cross-border payments platform, has integrated Google Pay Card Payments into its International Payment Gateway.

This integration enables Indian merchants to access a customer base of over 1 billion users across more than 90 countries through a single integration.

The Kakinada Cooperative Town Bank, an Urban Cooperative Bank (UCB) in Andhra Pradesh, has secured Tier-III status under RBI norms. The bank achieved this status after its deposits crossed the ₹2,000 crore mark while maintaining zero net Non-Performing Assets (NPAs).

It is to be noted that the RBI classifies UCBs into three categories based on deposits: Tier-I (deposits below ₹100 crore), Tier-II (deposits up to ₹1,000 crore), and Tier-III (deposits between ₹1,000 crore and ₹10,000 crore).

Paisabazaar, in partnership with SBM Bank Ltd, has launched the "SBM Paisabazaar Paisa+ Credit Card", a Fixed Deposit (FD)-backed secured credit card.

The card is designed to help consumers build their credit profile while offering cashback on daily expenses.

The SEBI has constituted an Expert Working Group (EWG) to review the regulatory framework for debenture trustees under the SEBI (Debenture Trustees) Regulations, 1993.

The group is chaired by Ananta Barua, a former Whole-Time Member of SEBI, and co-chaired by Rajnish Kumar, the former Chairman of the SBI.

The Asian Development Bank (ADB) has approved a Small Expenditure Financing Facility (SEFF) of $42.2 million to support the bamboo industry in the North Eastern Region (NER) of India.

The facility is designed to support community-based projects across 6 states in the NER (Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura).

Bengaluru-based Skydo, a cross-border payments platform, has secured an international payment license in Canada. With this, it has become the first Indian cross-border company to obtain regulatory approval overseas.

LEXI Money IFSC Pvt Ltd (LEXI), an AI-powered trade and payments platform, has received in-principle approval from the International Financial Services Centres Authority (IFSCA).

This approval authorizes the platform to operate as a Payment Service Provider (PSP) at the Gujarat International Finance Tec-City International Financial Services Centre (GIFT-IFSC) in Gandhinagar, Gujarat.

RBI has issued the ‘RBI (Non-Banking Financial Companies (NBFC) – Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026’ to revise the framework for identifying Upper Layer Non-Banking Financial Companies (NBFC-ULs).

Under the new rules, effective from June 24, 2026, any NBFC with an asset size of ₹1 lakh crore or more will be automatically classified as an NBFC-UL. This replaces the previous parameter-based assessment model with an absolute asset-size criterion.

The asset size threshold will be reviewed every 3 years, instead of the 5-year cycle proposed in the draft. Additionally, government-owned NBFCs that meet the eligibility criteria will now be considered for inclusion in the UL category.

HDFC Bank has appointed Rajiv Kumar as the part-time non-executive chairman for a period of 3 years. He succeeds the interim chairman Keki Mistry.

Additionally, he has been appointed as an additional independent director for a 4-year term, effective from June 30, 2026.

RBI has issued the "Master Directions – RBI (Credit Derivatives) Directions, 2026", which will come into effect on June 25, 2026. These directions aim to deepen the corporate bond market in India and expand the range of risk-management tools for market participants.

The framework introduces new products, including Total Return Swaps (TRS) linked to corporate bonds and derivatives on credit indices. Additionally, the RBI has mandated the creation of a Credit Derivatives Determinations Committee under the Fixed Income Money Market and Derivatives Association of India (FIMMDA) to support market development.