Regulatory Updates in India
RBI
The RBI has proposed a draft circular to limit banks’ exposure to capital markets and acquisition finance, capping direct exposure at 20% and total exposure at 40% of Tier 1 capital. Acquisition finance is restricted to 10% and allowed only for listed companies with strong financials and a three-year profit record, with banks financing up to 70% of the deal and the acquirer contributing at least 30%.
According to a survey commissioned by SEBI, AMFI, NSE, BSE, NSDL, and CDSL, while 50% of Indians are aware of mutual funds, only 9% actually invest in them. The study highlights key barriers to adoption, including fear of losing money (42%) and lack of product knowledge (40%). Additionally, 38% of intermediaries believe that the complexity of mutual fund products discourages investors. These findings underscore the urgent need for improved investor education and simplified communication to boost mutual fund participation across the country.
SEBI
SEBI has proposed easing KYC norms for NRIs by allowing them to complete re-KYC or KYC modifications digitally without being physically present in India. Currently, NRIs must verify their location via GPS during the process, but the new proposal would permit remote updates as long as the GPS location matches the country listed in their proof of address. Safeguards like time-stamping, geo-tagging, random action prompts, and blocking spoofed IPs will remain mandatory to ensure authenticity. Public comments on this proposal are open until Nov 23, 2025.
SEBI has proposed stricter norms to ensure all mutual fund folios are fully KYC compliant before any investment is processed. Currently, some Asset Management Companies (AMCs) allow folio creation based on internal KYC checks before final verification by KYC Registration Agencies (KRAs), leading to issues like blocked transactions, undelivered communications, and unclaimed redemptions due to discrepancies. Under the new proposal, AMCs must complete internal KYC checks and send documents to KRAs for final verification before allowing any investment. Only after the KRA marks the folio as compliant can the first investment proceed. Investors will be notified at each KYC stage via registered email and mobile.
The Indian government is planning major reforms to revive private investment in highway projects by overhauling the Build-Operate-Transfer (BOT-Toll) model, which has seen declining interest over the past decade. Key proposals include increasing Viability Gap Funding (VGF) beyond the current 40% cap through annuity-based disbursements, ensuring 95% land availability before construction, and revising contract terms to reduce risks and enhance returns for private developers. These changes aim to shift the focus back from government-funded models like EPC and HAM to PPP-based approaches, thereby easing fiscal pressure and accelerating infrastructure development under the National Infrastructure Pipeline.
- October 27, 2025
- Press Release : RBI
- 11:45 am