Introduction The 2026 Budget announced the merger of Power Finance Corporation and Rural Electrification Corporation. This would be the first step in improving scale and efficiency in public sector NBFCs. A High Level Committee on Banking for Viksit Bharat will be formed alongside. These signal dual shifts that will reshape how lenders compete. Budget 2026 also commits ₹12.2 lakh crore to public capex in FY27. It introduces market makers for corporate bonds. Municipal bonds a

Introduction India's Budget 2026 introduces the biggest structural change to MSME lending since MUDRA. The CGTMSE credit guarantee scheme now extends to invoice discounting through TReDS platforms. This creates an infrastructure-backed option to standard balance-sheet lending .  The shift arrives as manufacturing expands 8.4% in H1 FY26 , reflecting strong capacity usage and resilient demand. Reform completion stands at 76% of planned measures. The Budget uses a dual approach

If you missed Part 1 of the FSR 2025 series, you can read it  here . Introduction The RBI's December 2025 Financial Stability Report  delivered both validation and a strategic signal for the NBFC sector. Stress tests confirmed strong capital positions at 22.8% CRAR, substantially above the 15% regulatory minimum. The system demonstrated clear resilience under severe stress scenarios. But the FSR also revealed something more strategic for the sector. The stress testing methods

India's Loan Against Property (LAP) market will reach USD 2.8 trillion by 2034 , growing at 13% each year. The opportunity is large. But operating challenges limit how fast lenders can scale this business. Unlike home loans that finance a specific purchase with standard workflows, LAP serves many needs. It funds business growth, debt payoff, education, and medical costs. Lenders can accept residential, commercial, or industrial properties as security. This flexibility creates

Introduction "The outlook for 2026 and beyond is shrouded in uncertainty," wrote RBI Governor Sanjay Malhotra in the December 2025 Financial Stability Report . Overall, India's financial system passed stress tests and remains robust. However, the FSR identifies several vulnerabilities. These include stretched asset valuations, rising public debt, and growing links among financial institutions. For lenders, the challenge is immediate. Trade tensions and geopolitical conflicts

Introduction Credit information reporting is moving from a monthly task to a near-real-time discipline. The Reserve Bank of India's Amendment Directions issued in December 2025 mandate weekly credit reporting. This takes effect on July 1, 2026. The   new framework   requires NBFCs to report credit information four times every month instead of twice. The operational burden increases, but so does the quality of the credit ecosystem. Lenders with strong data infrastructure will

Introduction H1FY26 marked a clear change in the NBFC growth cycle. After several quarters of 20% plus expansion, sector credit growth moderated to around 17% year-on-year. At first glance, this looks like a broad-based slowdown. A closer look shows something more important. The slowdown is uneven. While some NBFCs continue to report strong double-digit disbursement growth, others including large and well-capitalized players are seeing flat or muted momentum. This divergence

Introduction India's lending sector has been governed by thousands of circulars over the years. Each circular solved a specific problem when it was issued. But together, they created a complex system. Compliance teams had to check multiple documents to understand what still applied. The Reserve Bank of India's recent consolidation exercise  is a structural clean-up. It doesn't change the rules themselves. It improves how regulations are organized and accessed. For banks, NBFC

India’s lending ecosystem is moving through a period of closer supervision and tighter regulatory expectations. Over the past year, the Reserve Bank of India has steadily enforced rules to improve customer protection and strengthen processes in financial institutions. OneFin’s review of 318 penalty actions  shows a clear shift. What was once occasional penalization is now a push toward stronger accountability. The monetary implication of fines is not the only issue. It also s

The Reserve Bank of India released a new draft framework  on October 3, 2025 that aims to bring stronger transparency and governance to related party lending by regulated entities (REs). Effective April 1, 2026, the rules follow a common principle-based approach across the ecosystem. For NBFCs, these proposed directions are among the most significant changes to governance in recent years. They come at a time when the sector is expanding, raising capital from diverse sources a

Introduction Global trade has been under pressure through most of 2025. Freight rates moved sharply, demand weakened in Europe and East Asia, and shipment cycles stretched. The pressure increased in August 2025 when the United States imposed a cumulative 50% tariff on Indian goods. Since the US is India’s largest export market, this created an immediate shock for several MSME-dominated sectors. These disruptions pushed many exporters into tight working capital positions. Lend

Introduction: A Quiet but Powerful Reform Most lending discussions focus on MSMEs and personal loans. Yet a major shift is taking place in capital-market credit. In October, the RBI announced major reforms  to Loans Against Securities (LAS) . Effective April 1, 2026, they redefine how banks lend against securities such as shares, bonds, and mutual funds. By raising limits, expanding eligible collateral, and adding real-time monitoring, the RBI has made LAS a mainstream credit

Introduction Gold has always been more than a precious metal for India. It is a store of value, a family asset, and often a quick source of credit. Loans against gold help households and small businesses meet short-term needs. By 2025, India’s organised gold-loan market had touched ₹12 trillion and was on track to reach ₹15 trillion by March 2026. This rapid growth also brought uneven practices. Lenders used different rules for valuation and documentation. Borrower protection

Introduction India’s banking system is changing quietly but decisively. Over the past year, several mid-sized lenders - RBL Bank, Yes Bank, Federal Bank, and IDFC First Bank - have seen major foreign investors enter their ownership structure. The latest is a Blackstone affiliate buying almost 10% of Federal Bank . There are also recent reports of the government’s plan to raise the FDI cap in PSU banks to 49%. At the same time, the Reserve Bank of India (RBI) has proposed broa

Why Re-KYC is Back in Focus Re-KYC, or periodic KYC updation, has long been part of India’s banking framework. But in 2024–25, it returned to focus. In June 2025, the Reserve Bank of India updated its Master Direction on KYC , setting clearer timelines, communication steps, and operational rules for banks and NBFCs. The regulator also launched a national drive to refresh customer records. Over 1.4 lakh re-KYC camps were held, updating more than 3.5 million accounts by August

Introduction When the Reserve Bank of India released its draft Directions on Expected Credit Loss (ECL)  on October 7, 2025, it started one of the biggest updates to India’s banking rules in decades. The draft replaces the old “incurred loss” system with a forward-looking, data-based approach  to credit risk. The goal is simple: help banks spot stress early, protect capital, and make the system stronger. The framework will start on April 1, 2027 , with a transition period un

Introduction Microfinance has long been central to India’s financial inclusion story. But recent data  shows the sector is going through...

Introduction Accessibility is no longer optional. In April 2025, the Supreme Court declared  that digital access is a fundamental right ....

Introduction The 56th GST Council meeting in September 2025 marked the most significant set of changes since the tax was first rolled out...

Introduction: A Turning Point for AI in Finance Artificial Intelligence (AI) has quickly moved from lab experiments to everyday financial...