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Tag: Reserve Bank of India

  • SEBI Plans to Relax Rules, Paving Way for Greater NRI Investment in Indian Stocks

    Tuhin Kanta Pandey, the chairman of the Securities and Exchange Board of India (SEBI), announced on 11 October that the market watchdog is simplifying regulatory procedures to facilitate NRI investments in Indian equities markets. In order to eliminate the need for NRIs to return to India in order to fulfil know-your-customer (KYC) standards, the regulator is attempting to streamline the process.

    At a function hosted by the Bombay Stock Exchange Brokers’ Forum on October 11, Pandey stated that SEBI has not yet created a simple and safe KYC access system for NRIs to enable their involvement in the securities market. This will be the regulating body’s first priority.

    SEBI Collaborating with RBI and UIDAI

    Pandey stated that SEBI is working with the Unique Identification Authority of India (UIDAI) and the Reserve Bank of India (RBI) to develop a system that would allow NRIs to complete their KYC verification over video conversations rather than needing to return home. Notably, there are more than 3.5 crore non-resident Indians (NRIs) worldwide, and India is the biggest beneficiary of remittances worldwide, with $135 billion received in FY25.

    According to Pandey, SEBI’s “immediate goal” is to make the FPI registration process quick and easy by making it entirely portal-based, because the agency previously agreed in September to establish a single window for trusted foreign portfolio investors (FPIs) with less stringent compliance standards. In order to put it into effect, he continued, SEBI is already consulting its stakeholders.

    When it comes to enabling registration, SEBI wants to be among the best in the world. To enable digital registration, SEBI, RBI, and the Income Tax Department would need to collaborate, according to Pandey, who characterised the project as a “process issue” rather than one resulting from hazards. Speaking to the broker community, Pandey stated that SEBI will finish revising broker laws by the end of December.

    SEBI to Device Framework to Prevent Cybercrime

    According to Pandey, SEBI will speak with market infrastructure organisations before issuing instructions on keeping an “air gap” in order to improve cybersecurity. He went on to say that SEBI has put in place a redundancy model for clearing corporations, which enables operations to continue without interruption in the event that one clearing corporation fails, and that market infrastructure institutions are being put to the test through live disaster recovery drills.

    “As with stockbrokers, we are also looking at implementing a safety net at a depository participant in the event of an outage,” Pandey stated. He added that the data warehouse system has been redesigned to create new role-based alerts to detect fraudulent trades in bulk deals and identify pump-and-dump trends. He also mentioned that SEBI is moving from reactive supervision to predictive oversight in the surveillance space.

    As per Pandey, high-frequency and algorithmic trading have grown significantly in recent years and now make up a sizable portion of volumes in the derivatives and equity markets.

    Quick Shots

    •SEBI
    to simplify NRI investment norms to make it easier for Non-Resident Indians
    to invest in Indian equity markets.

    •NRIs
    may soon be able to complete KYC verification via video calls, eliminating
    the need to visit India.

    •3.5
    crore NRIs globally — India remains the top recipient of remittances at $135
    billion in FY25.

    •SEBI
    aims to make foreign portfolio investment registration fully online and
    faster.

  • Bombay HC Backs SBI Move to Report Anil Ambani to RBI in Reliance Communications Case

    The Bombay High Court last week upheld the State Bank of India’s (SBI) decision to label the accounts of Reliance Communications (RCom) as “fraud” and submit Anil Ambani’s name to the Reserve Bank of India (RBI).

    On October 3, a panel of Justices Revati Mohite Dere and Neela Gokhale decided that a personal hearing was not required and that the SBI had given him enough time to present his case in accordance with the RBI’s and the Supreme Court’s directives. Ambani asserted that the bank had not given him a chance to present his arguments in a face-to-face hearing.

    Why Reliance’s Anil Ambani is Facing the Heat?

    The court held that once RCom – where Ambani was a director and promoter – was identified as “fraud”, his name could be disclosed to the RBI since he was “in control” of the firm during the relevant period. Due to his affiliation with RCom, which defaulted on loans and credit facilities totalling more than INR 1,500 crore that were approved between 2012 and 2016, the court’s ruling will essentially prohibit Ambani from raising money or pursuing credit facilities.

     The RBI Master Directions on Frauds list this restriction on credit and funding as one of the “penal measures”. These regulations prohibit anyone who is deemed to be a fraudster and those “associated” with them from obtaining credit from banks and non-banking financial companies (NBFCs), which are governed by the RBI.

    This restriction is in effect for five years after the date of the settlement of dues or the full repayment of the fraudulent sum. Ambani filed a plea in court contesting a June ruling by the SBI’s Fraud Identification Committee (FIC). In 2020, the SBI initially deemed RCom accounts to be “fraud” in accordance with the RBI’s 2016 Master Directions.

    Following a Supreme Court decision in 2023 that required borrowers to have a previous hearing, this injunction was revoked. After that, the bank sent Ambani a new show-cause letter and provided him an opportunity to reply. In June, it declared that RCom’s account was fraudulent and that the RBI would be notified of his identity.

    On What Basis HC Termed RCom Fraud?

    Based on the financial system’s handling of “fraud”, which is regulated by the RBI’s Master Directions and altered by the Supreme Court’s historic State Bank of India & Ors. v. Rajesh Agarwal & Ors. ruling in 2023, the HC ruling was made. How banks identify, categorise, and report fraud is outlined in the RBI’s 2016 Master Directions on fraud classification and reporting by commercial banks and selected financial institutions.

    In 2017, the SBI designated Reliance Communications’ account as a non-performing asset (NPA) due to the company’s failure to fulfil its commitments under the loan restructuring. As instructed by the RBI, SBI’s FIC deemed RCom’s account to be “fraud” in November 2020. In a subsequent case, the directives were contested on the grounds that they did not necessitate a hearing before labelling an account as fraudulent.

    Following a historic Supreme Court ruling in the Rajesh Agarwal case, which established that borrowers must be given a chance to be heard before such categorisation, SBI retracted its classification of RCom’s account as fraudulent.

    Quick Shots

    •Court backs State Bank of India’s move to report
    Anil Ambani to RBI over RCom fraud.

    •Ambani barred from raising funds or obtaining
    credit from banks/NBFCs for five years post-repayment.

    •Ruling follows RBI’s 2016 Master Directions on
    fraud and the 2023 Supreme Court Rajesh Agarwal judgment requiring borrower
    hearings.

    •SBI had issued show-cause letters and allowed Ambani
    to reply before reaffirming fraud classification.

  • RBI Increases IPO Financing Limit to INR 25 Lakh and Relaxes Lending Rules for Banks

    In an effort to increase bank loan availability for both individuals and businesses, the Reserve Bank of India (RBI) recently announced a number of significant measures. In addition to loosening limitations on lending against shares and debt securities, the central bank has chosen to permit banks to finance acquisitions by Indian corporations.

     Following the Monetary Policy Committee (MPC) meeting, Governor Sanjay Malhotra declared that the RBI would establish an enabling framework to assist banks in lending money for acquisitions.

    Commenting on the development, Kresha Gupta, Director & Fund Manager, Steptrade Capital stated, “Raising the IPO financing limit per individual investor from INR 10 lakh to INR 25 lakh: – Indian primary market is buzzing, with almost one new issue opening every day. For investors, the calculation is simple: the interest on loans looks small compared to the returns IPOs are delivering. The higher limit enables retail and HNI participants to bid for larger allocations and actively participate in multiple IPOs, rather than being constrained by capital.”

    Adding further, he stated, “Enhancing the loan limit against shares from INR 20 lakh to INR 1 crore and removing the ceiling on lending against listed debt securities:- Earlier, even investors with large stock portfolios could borrow only up to INR 20 lakh from banks. With the new limit raised to INR 1 crore, they can now access far greater liquidity by pledging their shares. In addition, by removing the ceiling on loans against listed debt securities such as bonds and debentures traded on exchanges, investors can borrow money on the debt securities also.”

    RBI Gave a Nod to SBI’s Proposal

    The action was taken in response to a request for such financing from the State Bank of India. Malhotra added that the regulatory cap on lending against listed debt securities has been lifted by the central bank. The loan ceiling against shares was raised from INR 20 lakh to INR 1 crore per person at the same time. The cap on IPO financing has been increased from INR 10 lakh to INR 25 lakh per individual.

    High net worth individuals (HNIs) will benefit most from this move, which takes effect on October 1, 2024, as it will enable them to apply for higher amounts in public offerings.

    Spree of New Initiatives Initiated by RBI

    Additionally, the RBI has chosen to lower the cost of loans for infrastructure projects. It will lower the risk weights associated with loans to reputable infrastructure projects from non-banking financial organisations (NBFCs). A 2016 rule that prohibited lending to big borrowers with bank exposure over INR 10,000 crore has also been revoked by the regulator.

    It is anticipated that this will increase the system’s total credit availability. Regarding regulatory timetables, Malhotra stated that banks will have ample time to adapt, as the Basel 3 capital structure and the expected credit loss (ECL) framework will take effect in 2027.

    According to experts, the RBI’s actions are intended to promote corporate acquisitions, increase bank lending, increase IPO participation, and facilitate the availability of capital for infrastructure and company expansion.

    Quick Shots

    •RBI has raised the IPO loan limit from INR 10 lakh
    to INR 25 lakh per individual, effective October 1, 2024, boosting
    participation, especially from HNIs.

    •The cap on loans against shares increased from INR
    20 lakh to INR 1 crore per person.

    •RBI has removed the regulatory cap on lending
    against listed debt securities.

    •Banks are now allowed to finance corporate
    acquisitions, following a proposal from State Bank of India (SBI).

    •Risk weights on loans to high-quality infrastructure
    projects via NBFCs will be reduced to lower borrowing costs.

  • EY Hikes India’s GDP Growth Forecast to 6.7%, Urges Diversification of Export Markets

    Based on robust growth in the June quarter and the implementation of GST reforms, EY increased India’s real gross domestic product (GDP) forecast for the fiscal year 2025–2026 (FY26) from 6.5% to 6.7%.

    EY stated in its ‘Economy Watch’ report for September 2025 that, despite global headwinds affecting India’s export prospects for both goods and services, and with 1QFY26 real GDP growth of 7.8% and demand stimulation through GST reforms on the one hand, we expect India to still show an annual real GDP growth of 6.7% in FY26.

    GDP Growth Outperformed RBI’s Expectations

    The June quarter’s GDP growth of 7.8% exceeded the Reserve Bank of India’s (RBI) forecast of 6.5% growth during the monetary policy meeting in August. EY claims that the continuous supply chain interruptions and tariff-related concerns give India a chance to re-evaluate the structure and makeup of its global commerce, particularly with the US and China.

    India has a “narrow” base of import sources and export destinations, the research continued. India is heavily reliant on the United States and, to a lesser degree, on China, according to DK Srivastava, chief policy advisor at EY India. Diversifying its import and export markets should help India find additional chances among the BRICS nations and lessen its dependency on China and the US.

    How new GST 2.0 Roll Out Further Boosted GDP Growth

    With the introduction of GST 2.0 earlier this month, rates were rationalised to be 5% and 18%, with a special rate of 40%. Automobiles, health, and textiles are just a few of the industries that stand to gain from this. According to Srivastava, some product categories will see considerable fee reductions under the new tariff system.

    Textiles, consumer electronics, vehicles, health, and the majority of food items are among the major beneficiary sectors. Lower prices may have wide-ranging benefits in these employment-intensive industries. He went on to say that fertilisers, agricultural equipment, and renewable energy are other industries that could gain from the production side.

    Farmers may profit from reduced input costs in several industries. First, a short-term impact on revenue is anticipated. EY anticipates that demand will rise in response to a significant drop in post-tax pricing, perhaps making up the revenue losses in the long run.

    Quick
    Shots

    •EY raises India’s FY26 GDP growth
    forecast to 6.7%, up from 6.5%, driven by strong Q1 performance and GST
    reforms.

    •India’s GDP grew 7.8% in the June quarter,
    surpassing the RBI’s 6.5% projection.

    •Supply chain disruptions and tariffs
    prompt calls to diversify export and import markets beyond the US and China.

    •EY suggests exploring BRICS nations
    and emerging economies to reduce trade dependency.

    •New GST structure with 5%, 18%, and
    40% slabs expected to lower prices and stimulate demand.

    •Textiles, automobiles, healthcare,
    consumer electronics, food, fertilisers, and renewable energy among key
    beneficiaries.

  • Tata Capital Set to Launch 2025’s Biggest IPO from October 6-8: All You Need to Know

    The Tata Group’s premier financial services company, Tata Capital, moved one step closer to its massive initial public offering (IPO) on September 26 when it submitted its red herring prospectus to the bourses and Sebi.

    According to an exchange disclosure, the offer includes a new issue of up to 210,000,000 equity shares with a face value of INR 10 apiece as well as an offer for sale of up to 265,824,280 equity shares by specific company selling shareholders. Additionally, the disclosure stated that the offer or bid will open on October 6, 2025, and finish on October 8, 2025. October 3, 2025, will be the day of the anchor investor bidding.

    Tata Group Aiming for Post-Money Equity Valuation of $16.5 Bn

    Media reports also stated that the combined IPO size (new issue of shares plus OFS by Tata Sons and IFC, or International Finance Corporation) is estimated to be around $1.85 billion, or INR 16,400 crore, with the Tata Group aiming for a post-money equity valuation of approximately $16.5 billion for the big-bang IPO.

     According to the source, insurance behemoth LIC is probably going to place a large wager on this matter, with the anchor segment probably taking place on October 3 and the issue preparing to launch between October 6 and October 8.

    The vast majority of Tata Capital is owned by Tata Sons. According to the draft paperwork, the remaining interest is held by external investors IFC and other group firms, including TMF Holdings Ltd, Tata Investment Corporation, Tata Motors, Tata Chemicals, Tata Power, and others.

    RBI Norm that Needs to be Followed by Tata Capital

    Upper-layer NBFCs like Tata Capital are required by Reserve Bank regulations to list on domestic bourses by September 30. However, the company just obtained a small extension from the banking regulator, according to sources.

    Moneycontrol was the first to announce on April 5 that Tata Capital has submitted draft documents for an IPO of over INR 15,000 crore to SEBI under the private pre-filing process. Numerous media outlets also stated earlier on March 21 that the top NBCF had hired ten investment banks to serve as consultants for the massive listing and was probably going to use the confident pre-filing approach.

    According to the reports, the following companies were involved: Kotak Mahindra Capital, Citi, Axis Capital, JP Morgan, HSBC Securities, ICICI Securities, IIFL Capital, BNP Paribas, SBI Capital, and HDFC Bank.

    Quick
    Shots

    •Tata Group aims for a post-money
    equity valuation of ~$16.5 billion.

    •New issue of 210 million shares and
    OFS of 265.82 million shares by Tata Sons and IFC.

    •Life Insurance Corporation expected
    to be a major anchor investor.

    •Majority held by Tata Sons, with
    stakes from IFC and group companies like Tata Motors, Tata Power, Tata Chemicals,
    etc.

  • RBI MPC Expected to Hold Rates Steady in October Policy Review

    According to a report released on 25 September, the Reserve Bank of India’s monetary policy committee (MPC) is expected to keep the repo rate at its current level in its October review, taking into account the favourable effects of the GST reforms on demand, the stronger-than-expected Q1 FY26 GDP growth, and an inflation trajectory that is predicted to slope upwards after that.

    Because of the rationalisation of the GST, the inflation trajectory remained lower (the average for FY2026 is currently 2.6%). According to ICRA’s analysis, the transmission of the previous 100 bps rate drop is considered to be muted for outstanding deposits (-18 bps) but practically complete for fresh deposits (-94 bps).

    What Report Further Stated?

    The weighted average lending rate also decreased by 60 basis points for new loans, while it eased by 42 basis points for existing loans. It is believed that there won’t be any more notable transmission to loan rates in the upcoming months.

    The analysis predicts that the yield curve will continue to be steep and that the 10-year G-sec yield for the government bond market will trade between 6.40 and 6.60%. This is because long-term yields stay sticky due to demand-supply dynamics and fiscal concerns, while short-term rates are kept stable by easy liquidity.

    According to the paper, after a US Fed rate drop, the gap between the 10Y India G-sec and the 10Y US Treasury yield widened considerably, from 209 bps at the end of June 2025 to 236 bps in September 2025. Due to advance tax outflows, the systemic liquidity surplus declined in September 2025 after being significant in June and August of that year.

    Good News Ahead of Festive Season

    The report added that G-sec redemptions (INR 1.0 trillion) in early November 2025 and a 75 bps CRR drop that is still due during October–November 2025 are anticipated to improve liquidity and counteract the strain of currency leakage during the festive season. Variable Rate Repos (VRRs) may be maintained by the RBI to control sporadic tightness.

    In comparison to previous projections, the research projects that GST rationalisation will reduce headline CPI inflation by 25–50 basis points between Q3 FY2026 and Q2 FY2027. “Average CPI inflation for FY2026 is now projected at around 2.6% (against 3.0% earlier),” said the report.

    Quick
    Shots

    •GST reforms boost demand while
    keeping inflation lower; FY26 average CPI now seen at 2.6% vs. 3.0% earlier.

    •Muted transmission of the previous
    100 bps rate cut: new deposit rates fell 94 bps, lending rates down 60 bps.

    •10-year G-sec yield expected to stay
    between 6.40%–6.60%, with a steep yield curve persisting.

    •India–US bond yield gap widens to 236
    bps post Fed rate cut.

    •Liquidity to improve in November with
    INR 1 trillion G-sec redemptions and a 75 bps CRR cut expected.

  • IPO-Bound PhonePe Secures RBI Approval to Operate as Payment Aggregator

    The Reserve Bank of India (RBI) has granted Walmart-owned fintech PhonePe full approval to function as an online payment aggregator (PA). This comes more than two years after the RBI granted PhonePe in-principle permission to function as an online payment aggregator in August 2023.

    With the approval, PhonePe will be able to access more online retailers, concentrating on small and medium-sized enterprises (SMEs) around the nation. Yuvraj Singh, the CBO merchant business for PhonePe, said that the company is in a good position to speed up financial inclusion by offering easily accessible payment options to underserved firms, especially in the SME sector. The company’s mission to facilitate wider digital financial inclusion is in line with its emphasis on working with both well-established companies and start-ups.

    How PA Licence Will Empower PhonePe?

    Fintech platforms can implement digital payment solutions and onboard businesses with a PA licence. Without having to develop a separate integration system, it allows licence holders to allow merchants to accept a variety of payment methods, pool customer collections, and receive settlements.

    For almost five years, PhonePe has remained the market leader in India’s UPI space. It held a 46.5% market share in August 2025 after processing 915 Cr UPI transactions valued at around INR 12 Lakh Cr. Currently, the platform manages over 360 million transactions every day from 650 million registered users.

    In addition to UPI, PhonePe has a diverse business portfolio that includes the Indus AppStore, the e-commerce app Pincode, investing tech, insurance, and financing. It recently stopped operating as an NBFC and turned in its licence to the RBI on 29 August.

    PhonePe all Set for its IPO

    The significant regulatory approval coincides with the fintech’s much-awaited public debut. Later this month, PhonePe is anticipated to submit its draft red herring prospectus (DRHP) to SEBI in a secret manner. In order to raise $1.2 billion to $1.5 billion (about INR 10,000 crore to INR 13,000 crore) at a valuation of $7 billion to $8 billion, it plans to go public in early 2026.

    Both new shares and an offer-for-sale (OFS) are probably going to be part of the IPO. Although it is not anticipated that Walmart, the company’s largest shareholder, will significantly reduce its investment, investors Tiger Global and General Atlantic might think about making partial departures.

    Quick
    Shots

    •Licence enables PhonePe to onboard
    SMEs and startups, boosting digital financial inclusion.

    •PhonePe holds 46.5% UPI market share
    with 915 Cr transactions worth INR 12 Lakh Cr in Aug 2025.

    •PhonePe has over 650M registered
    users, processing 360M+ daily transactions.

    •PhonePe is preparing to file DRHP
    with SEBI; IPO expected in early 2026 at $7B–$8B valuation.

    •PhonePe seeks to raise $1.2B–$1.5B
    (INR 10K–13K Cr) through fresh issue + OFS.

  • RBI Ready to Support Tariff-Hit Sectors, Says Governor Malhotra

    In the event that US President Donald Trump’s tariffs take effect, the Reserve Bank of India (RBI), as it has in the past, will intervene and offer financial assistance to the most severely affected industries to help them weather the storm, RBI Governor Sanjay Malhotra stated in Mumbai on Monday, August 25, 2025.

    Possible Impact of Trump’s 50% Tariff on Indian Exports

    Through monetary policy, the RBI essentially helped the economy during COVID by easing credit access for MSMEs and imposing a ban on term loans. In response to a query during the FIBAC annual conference, which was hosted by the Indian Banks’ Association (IBA) and FICCI, the governor stated that the 50% tax has not yet gone into effect.

    Appreciating the move, Arunabh Sinha, CEO & Founder, UClean stated, “The RBI stepping up for tariff-hit sectors is a confidence signal. Tariffs can quickly raise costs and squeeze margins, and knowing the central bank is ready to cushion that shock gives businesses the breathing space they need. What really stands out is the RBI’s push for trade in local currencies. That’s a game-changer. It cuts dollar dependence, trims transaction costs, and shields companies from the whiplash of currency swings.”

    ” For the brands that is expanding into international markets, smoother local-currency trade directly strengthens our ability to scale across borders. RBI alone cannot erase the pain of tariffs. But in an uncertain global environment, reassurance matters. When the central bank signals stability, it helps startups and growth-stage companies plan with conviction instead of hesitation. For entrepreneurs, that predictability is half the battle won. In short, this is the RBI saying: ‘Yes, the global headwinds are strong, but Indian businesses will not sail alone.’ And that assurance is priceless for anyone building for the long run,” Sinha added.

    Sectors at Risk – Textiles, Auto Parts, Gems, Shrimp

    The RBI hopes that the impact of the ongoing negotiations will be low. As you are aware, 45% of exported goods are exempt from taxes, while the remaining 55% may have an effect on certain industries, including textiles, auto parts, gems and jewellery, shrimp, and MSMEs.

    RBI Measures to Cushion the Economy

    The government is investigating it, Malhotra added. The RBI has been in a period of relaxing. In order to give the economy enough cash, it lowered the repo rate by 100 basis points. The federal bank would provide any assistance that the RBI deems necessary for the expansion of the economy, including that of the most affected sectors, as soon as possible.

    “It’s an important area on which the RBI has been working for many years, and it’s important for the country to develop trade in local currency,” Malhotra responded when asked about the rupee’s internationalisation. It protects us from foreign exchange fluctuations.

    He stated that “healthy trade is happening in local currency” and that India presently has agreements with four nations: the Maldives, Mauritius, Indonesia, and the United Arab Emirates. “It’s a slow process and would take years and decades to evolve to have trade in local currencies,” he remarked when asked how it would work out.

    Strengthening Banking Correspondents for Financial Inclusion

    In order to accomplish the aims of financial inclusion, Malhotra emphasised in his conference speech the necessity of significantly fortifying the Banking Correspondents (BCs) network.

    He went on to say that we must never forget that nearly two-thirds of our nation’s population lives in rural areas, and we have a duty to them all. Although practically every town within a 5-kilometre radius now has banking access, there is still room to improve it. In our nation’s sparsely populated areas, BCs are a useful conduit for service delivery.

    To increase the calibre, reliability, and accessibility of financial services, this channel must be reinforced. Not only is there room to enhance them, but they also need to be trained and have their service offerings expanded. He underlined that while this will increase the BCs’ financial sustainability and viability, it will also enhance the calibre and scope of their services.

    Quick
    Shots

    •RBI ready to support sectors impacted
    by potential US tariffs.

    •Proposed 50% tariff could affect
    Indian exports like textiles, auto parts, gems & jewellery, shrimp, and
    MSMEs.

    •RBI provided relief during COVID
    through credit easing, loan moratoriums, and repo rate cuts.

    •Repo Rate Cut by 100 bps – Recent
    policy step to inject liquidity and support growth.

  • Bank of India Declares Anil Ambani and Reliance Communications as Fraud Accounts After SBI

    In a regulatory filing, Bank of India, following State Bank of India, designated Reliance Communications’ loan account as fraudulent and named its former director, Anil Ambani, on the basis of alleged fund diversion in 2016.

    Ambani retaliated against the Bank of India, claiming that its actions were biased and against due process. He is being unfairly singled out, Ambani claimed.

    According to a representative for Ambani, “It is astounding that certain lenders have now decided to start proceedings in a staggered and selective manner after an excessive lapse of more than 10 years.”

    The INR 700-Crore Loan and Alleged Fund Diversion

    In August 2016, Reliance Communications received an INR 700-crore loan from Bank of India to cover its capital and operating expenses as well as the repayment of its outstanding debts.

    According to the bank’s letter that RCom revealed in the stock exchange filing, half of the sanctioned cash released in October 2016 was invested in a fixed deposit, which was prohibited by the sanction letter. On August 22, RCom reported that it had received a letter from Bank of India dated August 8 announcing the bank’s decision to label the loan accounts of the firm, its promoter and former director Anil Dhirajlal Ambani, and its former director Manjari Ashok Kacker as fraudulent.

    In June of this year, State Bank of India (SBI) had previously taken the same action, claiming that bank funds had been embezzled through transactions that went beyond the terms of the loans.

    Anil Ambani’s Response to Fraud Allegations

    According to a statement from Ambani’s spokeswoman, the Bank of India had sent show-cause notifications to 13 of RCom’s directors and senior management but had subsequently withdrawn the letters against everyone else. Without adhering to natural justice principles, it selectively continued the proceedings against Ambani.

    The statement emphasised that Ambani had no involvement in the day-to-day operations or decision-making of RCom and had only been a non-executive director on the board until his resignation in 2019. The business further claimed that the bank denied him a personal hearing prior to making its decision and neglected to provide the required paperwork.

     “These actions are against established law and judicial precedents, as well as the RBI regulations issued in July 2024,” the representative stated. A committee of creditors headed by the State Bank of India and monitored by a resolution specialist is still in charge of RCom’s insolvency procedures. The Supreme Court and the National Company Law Tribunal are also considering the case. The letter further stated, “Ambani will pursue legal remedies and categorically denies all allegations and charges.”

    Quick
    Shots

    •Bank of India (BoI) labels Reliance
    Communications (RCom) loan account as fraudulent.

    •Names Anil Ambani (former director
    & promoter) and Manjari Ashok Kacker (ex-director).

    •In 2016, RCom took an INR 700 Cr loan
    from BoI.

    •Half of funds allegedly placed in
    fixed deposits, violating sanction terms.

  • SMBC Secures RBI Nod to Acquire 24.99% Stake in Yes Bank

    The Reserve Bank of India (RBI) has approved a plan by Japanese lender Sumitomo Mitsui Banking Corporation to purchase up to 24.99% of the private sector lender, Yes Bank announced on 23 August. In the biggest cross-border investment in the Indian banking industry, the Japanese lender declared in May that it would pay INR 13,482 crore to acquire a 20% share in Yes Bank.

    Additional 4.9% Stake Application

    SMBC is a fully-owned subsidiary of Sumitomo Mitsui Financial firm, which as of the end of December had $2 trillion in assets, making it the second-largest banking firm in Japan. Then, according to a July Reuters story, SMBC applied for permission to acquire a further 4.9% of Yes Bank.

    SBI’s 13.19% Stake Sale

    When and from whom shareholders SMBC will buy the extra shares to increase its ownership in Yes Bank to little less than 25% are not yet known. The largest lender in India, State Bank of India (SBI), would sell 13.19% of its shares under the 20% stake sale plan.

    The remaining 6.81% will be sold by seven other shareholders: Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.

    Yes Bank’s Response to RBI Approval

    In a regulatory filing, Yes Bank stated that it is happy to notify that, by letter dated August 22, 2025, the Reserve Bank of India (RBI) has given SMBC permission to purchase up to 24.99% of the bank’s paid-up share capital and voting rights. One year from the date of this letter, this approval will remain in effect.

    In March 2020, the RBI replaced the board when Yes Bank’s financial situation worsened. Soon after, Yes Bank was saved by a group of banks led by SBI. According to the announcement, RBI has further explained that SMBC will not be considered a bank promoter after the transaction. Yes Bank is currently entirely owned by public shareholders and does not have a promoter.

    As stated in the agreements cited in Yes Bank’s notification dated May 9, Yes Bank stated that the proposed transaction is contingent upon clearance from the Competition Commission of India (CCI) and customary preconditions previously.

    Strategic Benefits of the Deal for Yes Bank

    Prashant Kumar, the CEO of Yes Bank, whose tenure expires in April 2025, told Mint three months ago that the private sector lender has accomplished three major goals thanks to the plan to sell 20% of Yes Bank. The fate of State Bank of India’s (SBI) ownership stake in the bank was one of the bank’s lingering issues, although Kumar said that it had been resolved.

    Proxy Advisory Firms Raise Concerns

    In the meanwhile, SMBC will receive two seats on the Yes Bank board as part of the agreement. However, proxy consulting companies were not pleased with Yes Bank’s decision to allow the Japanese lender to appoint its nomination directors to important board committees.

    On August 15, Mint announced that two proxy advice firms, Stakeholder Empowerment Services (SES) and Institutional Investor Advice Services India Ltd (IiAS), had advised investors to vote against the plan.

    Quick
    Shots

    •Approval valid for 1 year from August
    22, 2025.

    •SMBC (Japan’s 2nd largest bank) to
    invest INR 13,482 Cr for 20% stake.

    •SBI to sell 13.19%, rest 6.81% from
    Axis, HDFC, ICICI, Kotak, Bandhan, IDFC First, and Federal Bank.

    •SMBC also applied for additional 4.9%
    stake.