Fintech Newsletter: Recent Legal Developments And Market Updates From India (November 2025)
INTRODUCTION
As India’s fintech and financial services ecosystem continues to expand, regulators have taken significant steps to provide clarity, streamline compliance, and enable safer, more transparent growth. Recent developments across the Reserve Bank of India (“RBI”), the Securities and Exchange Board of India (“SEBI”), and the Insurance Regulatory and Development Authority of India (“IRDAI”) reflect a consistent focus on reducing legal ambiguity and codifying responsibilities for industry participants. August and September 2025 have accordingly witnessed extensive regulatory activity with the issuance of significant frameworks to strengthen compliance standards and investor protection across diverse segments of the financial ecosystem.
A marquee development in recent times has been the RBI’s Master Directions on Regulation of Payment Aggregators, 2025 (“PA Master Directions”) that has consolidated and harmonised prior guidelines, including those for domestic and cross-border PAs and extended the applicability of regulations to offline payment aggregators as well. By clarifying various definitions, the scope of offline and online payments, and other requirements, the directions provide much-needed legal certainty for payment aggregators (“PAs”). Similarly, SEBI’s recent amendments and Frequently Asked Questions (“FAQs”) for investment advisers (“IAs”) and portfolio managers clarify core obligations, segregation requirements, disclosure norms, and conditions for transitioning between individual and non-individual advisory roles. Among other key highlights are the RBI’s amendments to the Master Direction - Know Your Customer (KYC) Direction, 2016i introducing enhanced due diligence norms and safeguards for persons with disabilities, along with SEBI’s consolidated regulatory framework for IAs and Research Analysts (“RAs”), streamlining measures taken in relation to digital accessibility compliance, and KYC validation. Meanwhile, the International Financial Services Centres Authority (“IFSCA”) has also issued a master circular for capital market intermediaries and introduced a revised framework for Global Access in the International Financial Services Centre (“IFSC”).
Collectively, these developments demonstrate that Indian regulators are actively shaping a financial ecosystem where innovation can thrive within well-defined legal boundaries, balancing growth with risk management and consumer protection. In this edition of the Fintech Newsletter, we outline these updates and highlight other regulatory and industry developments in the Indian fintech space from August 01, 2025, to September 30, 2025.
RECENT LEGAL & REGULATORY DEVELOPMENTS
RBI issues the Master Directions on Regulation of Payment Aggregators, 20251 (Link)
Since the issuance of the RBI Guidelines on Payment Aggregators and Payment Gateways of 2020 (“PA/PG Guidelines”), India’s payment ecosystem has grown rapidly, with PAs increasingly facilitating online transactions for a wide range of services. Over time, clarifications in 2021 and a separate Regulation of Payment Aggregator – Cross Border (“PA-CB Regulations”) in 2023ii have further expanded the regulatory landscape. The new PA Master Directions consolidates previously issued guidelines, regulations and clarifications, simplify approvals, and provide a single, unified framework for domestic and cross-border PAs. The key features and changes introduced by way of the PA Master Directions inter-alia include:
Expanded scope of PAs: The definition of PAs has been broadened to include entities facilitating the purchase of ‘investment products’. The PA Master Directions also consolidates and classifies PAs into 3 (three) categories, i.e., PA – Physical (“PA-Ps”), PA - Online (“PA-Os”), and PA – Cross Border (“PA-CBs”). A PA-P has been defined as a PA that facilitates transactions where both the acceptance device and payment instrument are physically present in close proximity while making the transaction; and a PA-O has been defined as one that facilitates transactions where the acceptance device and payment instrument are not present in close proximity while making the transaction.
Categorisation of PA-CBs: A PA-CB has been defined as a PA that facilitates aggregation of cross-border payments for current account transactions that are not prohibited under the Foreign Exchange Management Act, 1999 (“FEMA”), for its onboarded merchants through e-commerce mode. Earlier, the PA-CB Regulations identified 3 (three) types of PA-CBs, i.e., export-only PA-CB (PACB-E), import-only PA-CB (PA-CB-I), and export and import PA-CB (PA-CB-E&I). The Master Directions simplify this classification into 2 (two) sub-categories, namely PA-CBs facilitating inward transaction and PA-CBs facilitating outward transaction
DvP Transactions: In the absence of any express exception to ‘Delivery vs Payment’ (“DvP”) transactions that existed in the erstwhile framework, it now appears that all DvP transactions will also fall within the regulatory ambit of the PA Master Directions. Notably, cash-on-delivery (“COD”) transactions however have been excluded but the meaning has been restricted to its literal meaning, in contrast with current practices where COD may involve electronic payments.
Simplified authorisation process: The PA Master Directions has clarified that PAs having a certificate of authorisation (“CoA”) and carrying out PA-P activities are only required to intimate RBI of such ongoing PA-P activities; PAs having a CoA and intending to commence business in another PA category, are required to intimate RBI at least 30 (thirty) days prior to commencing such new business activity.
RBI Issues Directions on Co-Lending Arrangements2 (Link)
The RBI has issued the Reserve Bank of India (Co-Lending Arrangements) Directions, 2025 (“Co-Lending Directions”), which will come into effect from January 1, 2026 or any earlier date as internally adopted by commercial banks, all Indian financial institutions, and non-banking financial companies (“NBFCs”) (collectively referred to as “REs”). These Co-Lending Directions provide a comprehensive framework for co-lending arrangements (“CLA”) between REs. The objective is to broaden the scope of co-lending beyond priority sector lending and provide regulatory clarity on the permissibility of such CLA while addressing prudential and conduct-related aspects.
This marks the first direction by the RBI expressly recognising co-lending arrangements inter se between NBFCs, an area that had hitherto remained a regulatory grey zone, despite being a widely prevalent market practice.
The Co-Lending Directions inter alia specify that each RE must; (i) retain at least 10% (Ten Percent) of individual loans in its books; (ii) incorporate CLAs into its credit policies; (iii) ensure that the CLA agreement has prescribed provisions pertaining to criteria for selection of borrowers, customer interface and protection issues, and grievance redressal mechanism, and (iv) ensure upfront disclosure of roles and responsibilities of each RE in the loan agreement with borrowers. The Co-Lending Directions also mandate that the final blended interest rate to be charged will be based on the average of rates applied by the partner according to their respective internal policies, risk profile of same or similar borrowers, weighted by proportionate funding share of concerned REs. Further, the Co-Lending Directions stipulate operational provisions which include maintaining escrow accounts for the CLA, REs to accurately reflect the respective shared in the CLA in their books, REs to ensure timely transfer of loan exposures, ensuring adherence to Know your Customer (“KYC”) norms, and implementation of grievance redressal mechanisms by REs.
The Co-Lending Directions also explicitly states that the originating RE in the CLA arrangement can provide default loss guarantee of upto 5% (Five Percent) of loans outstanding in respect of loans under CLA, which should be in accordance with the RBI’s Digital Lending Directions dated May 08, 2024.iii Further, entities must disclose active co-lending partners on their websites and provide aggregate details in financial statements.
With the issuance of these Co-Lending Directions, the earlier circular on co-lending by banks and NBFCs to the priority sector dated November 5, 2020 stands repealed, subject to existing arrangements remaining valid. With the issuance of these Co-Lending Directions, RBI has clarified certain key requirements such as maintenance of escrow accounts for disbursements and repayments between co-lending partners, maintaining and implementing of business continuity plans, and adhering to asset classification norms in greater detail.
RBI proposes amendments to Credit Information Reporting Directions (Link)
The RBI has released the draft Reserve Bank of India (Credit Information Reporting) (1st Amendment) Directions, 2025, proposing revisions to the Master Direction – Reserve Bank of India (Credit Information Reporting) Directions, 2025, which governs the functioning of the credit information reporting system in India. These amendments have been issued under Section 11 of the Credit Information Companies (Regulation) Act, 2005, and are intended to come into force from April 1, 2026. The Master Directions currently mandate submission of credit information by Credit Institutions (“CIs") to Credit Information Companies (“CICs”) at fortnightly or shorter intervals. However, given the growing reliance of lenders on Credit Information Reports (“CIRs”) for underwriting and credit risk assessment, the RBI has proposed a shift to weekly credit information submissions by CIs to CICs. This move aims to ensure that credit information reports reflect more current and accurate borrower data, thereby improving credit decision-making across the financial ecosystem. The draft amendments also propose to introduce measures for faster data submission and error rectification by CIs, enhancing both timeliness and data quality in credit reporting. Further, to facilitate better aggregation and identification of credit information, the RBI has proposed that CIs capture the Central Know Your Customer number in a separate field within the consumer segment reporting format.
RBI Issues Second Amendment to KYC Directions, 2016 (Link)
The RBI vide notification dated August 14, 2025, has issued the Reserve Bank of India (Know Your Customer (KYC)) (2nd Amendment) Directions, 2025, bringing immediate effect to proposed modifications to the existing KYC framework. The amendments inter alia include: (i) insertion of a reference to RBI’s FAQs on KYC; (ii) explicit inclusion of persons with disabilities under disadvantaged categories, with a mandate that no onboarding or KYC updation application may be rejected without due consideration and recorded reasons; (iii) expansion of due diligence requirements to cover occasional transactions of INR 50,000 (~ USD 563) and above or connected transactions, as well as international money transfer operations; (iv) recognition of Aadhaar Face Authentication as a valid biometric-based e-KYC authentication mode; and (v) clarification that liveness checks will not exclude persons with special needs.iv
IRDAI imposes penalty of INR 5 crore (~ USD 560,000) on Policybazaar Insurance Web Aggregator Pvt. Ltd. (Link)
The IRDAI issued an order against M/s Policybazaar Insurance Web Aggregator Pvt. Ltd (“Policybazaar”) following a remote inspection and subsequent enforcement proceedings for multiple violations of the Insurance Act, 1938 (“Insurance Act”) and the IRDAI (Insurance Web Aggregators) Regulations, 2017, as well as related circulars and guidelines. The IRDAI found contraventions including: (i) failure to disclose and obtain prior approval for directorships held by principal officer and key managerial personnel in other companies; (ii) ranking and promotion of selected insurance products as “Top” or “Best” on its website, in contravention of the requirement for unbiased and factual display of products; (iii) irregular outsourcing arrangements with insurers including non-disclosure of scope of services and unreasonable payouts; (iv) failure to tag policies with ‘Authorised Verifiers’ and maintain related solicitation records; and (v) collection and delayed remittance of insurance premiums. Based on these findings, the IRDAI imposed monetary penalties aggregating to INR 5 crores (~ USD 560,000) while issuing cautions and advisories on other lapses highlighted by the IRDAI in its order.
IRDAI issues warning to Acko General Insurance for policy issuance without premium receipt (Link)
IRDAI had conducted an inspection on Acko General Insurance Limited (“Insurer”) for certain violations of provisions of the Insurance Act, following which the IRDAI held that the Insurer had issued the certificates of insurance for the group policy held by it without the receipt of insurance premium from the policyholders. As a result, the advance deposit of insurance premium had become negative. IRDAI observed that this was not aligned with the intent of Section 64VB of the Insurance Act which requires premium to be collected by the insurer prior to the issuance of certificate of insurance. On being assured of corrective measures employed to correct the discrepancy by the Insurer, IRDAI has issued a warning to the Insurer and directed it to submit an ‘action taken’ report to IRDAI within 90 (Ninety) days from the date of the order.
IFSCA issues revised regulatory framework for Global Access in the IFSC (Link) (Link)
IFSCA has issued a circular on August 12, 2025, providing a revised framework for Global Access in the IFSC, replacing its earlier circulars issued in this regard, dated November 25, 2021 and June 6, 2024. The circular inter alia specifies: (i) requirement for broker dealers and subsidiaries of recognised stock exchanges to obtain authorisation from IFSCA before undertaking activities as Global Access Providers (“GAPs”), with existing entities required to comply by October 31, 2025; (ii) minimum net worth thresholds for GAPs, GAPs accessing global markets only on proprietary basis, and other broker dealers (that are not GAPs themselves) accessing global markets on proprietary basis through a GAP; (iii) ensuring that the GAP entity and its directors, key managerial personnel and controlling shareholders are ‘fit and proper’ persons in accordance with the criteria prescribed by the IFSCA; (iv) restrictions on access to products such as crypto-assets and other instruments that are not considered to be ‘financial products’ in the IFSC, and certain derivatives already available on recognised stock exchanges in the IFSC, while permitting access to other financial products listed in foreign jurisdictions; and (v) detailed compliance requirements including segregation of client funds, KYC and anti-money laundering (“AML”) norms, risk management, grievance redressal, disclosures, audit and reporting obligations.v Further, the circular provides that GAPs already operational as on the date of issuance of the circular are required to comply with provisions relating to authorisation, minimum net worth, client fund segregation, data storage, and disclosure of risk warnings- the deadline for which was October 31, 2025. IFSCA further amended the above mentioned circular by issuing an amendment circular on September 12, 2025, which inter alia provides: (i) GAPs must ensure that all client funds participating in global access activities are routed through a bank account in the IFSC; (ii) GAPs and Introducing Brokers are required to maintain separate bank accounts for their global access activities and IFSC activities with an International Banking Unit in the IFSC; (iii) GAPs and Introducing Brokers must maintain a separate bank account for clients’ funds, distinct from proprietary trading funds, to ensure proper segregation and protection of client assets; and (iv) The amendment circular acknowledges representations from market participants regarding the use of payment service providers (“PSPs”) to facilitate the movement of funds for global access activities in the IFSC. The IFSCA is considering permitting services offered by PSP for this purpose. The provisions outlined in the circular became effective immediately from the date of issue. GAPs are expected to adhere to the revised requirements within the stipulated timelines.
SEBI issues FAQs for the Investment Adviser Regulations (Link)
SEBI has published a set of FAQs to provide clarity on the SEBI (IA) Regulations, 2013 (“IA Regulations”). The guidance addresses several critical areas: (i) clarifying that any person desirous of obtaining registration as an IA must submit applications to the Investment Adviser Administration and Supervisory Body (“IAASB”), which will in turn assess the application and recommend the application to SEBI for grant of registration; (ii) clarifying that the Certificate of Registration granted under the IA Regulations is valid until it is suspended or cancelled by SEBI, however the validity is subject to payment of applicable periodic fees; (iii) explicitly stating that IAs are prohibited from outsourcing their core business activities and compliance functions; (iv) reinforcing the ban on IAs holding out any investment advice that implies assured returns, minimum returns, or target returns; (v) clarifying the scope of ‘incidental activity’ with respect to distributor of mutual funds as providing basic advice pertaining to investment in mutual fund schemes, not extending to providing investment advice to investors other than or in addition to mutual fund clients, and in securities (such as shares, debentures, bonds, derivatives, securitised instruments, structured products, units of AIF, REIT, InvIT, etc.) other than or in addition to mutual fund schemes distributed by it; and (vi) similarly clarifying the scope of ‘incidental activity’ with respect to stock brokers as providing basic advice pertaining to investment in securities to broking clients. The document also reiterates the strict segregation required between advisory and distribution services, clarifying that an individual IA and their family cannot provide distribution services to advisory clients, and non-individual IAs must ensure client-level segregation at the group level. Additionally, the FAQs detail the conditions under which an individual IA must transition to a non-individual IA, which is triggered when the number of clients exceeds 300 (Three Hundred) or annual fees collected exceed INR 3 crores (~ USD 340,000).
SEBI Issues Consultation Paper proposing amendments to the SEBI (Investment Advisors) Regulations, 2013 and SEBI (Research Analyst) Regulations, 2014, on Ease of Doing Business (Link)
The consultation paper released by the SEBI on August 7, 2025, proposes: (i) permitting IAs/RAs to provide past performance data to clients; (ii) allowing IAs to charge fees for providing second opinions on pre-distributed assets; (iii) easing the mandatory corporatization process for individual IAs; (iv) simplifying registration requirements by relaxing the requirement of furnishing of proof of address, and by removing the requirement of submitting details of net worth / assets and liabilities / income tax returns / Form 16 for registration as an IA/RA; and (v) broadening the eligibility framework by allowing graduates (subject to mandatory National Institute of Securities Markets (NISM) or accredited certification) to register as IAs/RAs.vi
SEBI Consolidates Regulatory Framework for Investment Advisers (Link) and Research Analysts (Link)
SEBI has issued consolidated versions of the IA Regulations and the SEBI (Research Analysts) Regulations, 2014, incorporating amendments issued up to August 2025 in the respective regulations. The latest amendments mandate maintenance of prescribed deposits in the manner specified by SEBI, marked as lien in favour of a body recognised by SEBI for administration and supervision of IAs/ RAs (as applicable), which may be utilised towards arbitration or conciliation dues under SEBI’s Online Dispute Resolution mechanism, in case the SEBI regulated entity (“SEBI RE”) fails to clear such dues.
SEBI issues clarifications on Cybersecurity and Cyber Resilience Framework for regulated entities (Link)
SEBI issued a circular dated August 28, 2025 (effective as of the same date) providing technical clarifications to the Cybersecurity and Cyber Resilience Framework (“CSCRF”) for SEBI REs, inter alia, in relation to: (i) introduction of principles of Exclusivity and Equivalence for SEBI REs under multiple regulators’ purview and clarifying the scope of CSCRF vis-à-vis other regulatory frameworks; (ii) technical clarifications on key CSCRF clauses covering definitions such as critical systems, implementation of zero-trust security models, mobile application security etc.; (iii) re-categorisation of portfolio managers and merchant bankers for CSCRF compliance, with thresholds set for different categories of portfolio managers and merchant bankers classified as small-size SEBI REs or those exempt from CSRF; and (iv) SEBI REs to follow the Cyber Security Audit Policy Guidelines issued by Indian Computer Emergency Response Team.
BSE issues clarification on Information Technology and Cybersecurity Committees for Qualified Stockbrokers (Link)
Bombay Stock Exchange (“BSE”) issued a clarification notice on August 22, 2025 pursuant to SEBI Circular on “Enhanced Obligations and Responsibilities on Qualified Stockbrokers (“QSBs”)” dated February 6, 2023 and the Comprehensive Operating Guidelines for QSBs issued by BSE on June 1, 2023. As per the aforesaid circulars, QSBs were required to constitute various committees of the Board of Directors or an analogous body, including an Information Technology (“IT”) Committee and a Cybersecurity Committee. Based on representations from QSBs and in consultation with SEBI, it has now been clarified that QSBs may constitute a single IT Committee instead of 2 (two) separate committees (for IT and cybersecurity). Such IT Committee shall mandatorily include at least 1 (One) external independent expert on cybersecurity and will discharge the functions of both the IT Committee and the Cybersecurity Committee as prescribed under the applicable circulars. The provisions of this clarification have been made effective in accordance with the implementation timelines stipulated in the CSCRF issued vide circular dated August 20, 2024.
The National Stock Exchange of India Limited issues Clarifications for Stockbrokers on the SEBI Cybersecurity and Cyber Resilience Framework (CSCRF) (Link)
The National Stock Exchange of India Limited (“NSE”) has issued clarifications regarding the CSCRF for trading members. NSE, in consultation with SEBI has clarified that for categorisation purposes under the CSCRF (i.e., qualified/mid-size/small/self-regulatory stockbrokers) the number of total registered clients to be considered must include all clients with an active or inactive status based on their unique PAN, while excluding any clients marked as closed in the Unique Client Code database. Furthermore, the NSE has provided a specific criterion for members engaged in both proprietary and client trading – such members can be categorised as proprietary stockbrokers for CSCRF applicability if their clientele trading turnover is less than 10% (Ten Percent) of their proprietary trading turnover during the financial year.
SEBI extends implementation timeline for stockbrokers to implement the algo-trading framework for retail investors (Link)(Link)
SEBI, stock exchanges, and market participants (including stockbrokers and algo service providers) held extensive discussions to address operational challenges raised by intermediaries, particularly around the registration framework for API-based retail algo products, standardisation of testing protocols, and system integration timelines. Based on the feedback received, SEBI has provided a glide path with revised milestones to enable a smoother transition and ensure uniform implementation across the market. In light of this, SEBI issued a circular extending the implementation timeline for its provisions on the “Safer participation of retail investors in Algorithmic trading” dated February 4, 2025. While stockbrokers with ready systems could go live on October 1, 2025, SEBI has provided a glide path with new milestones for those requiring more time to integrate necessary system changes, which were based on recent clarifications and modifications. The new milestones require stockbrokers to apply for registration of API-based retail algo products by October 31, 2025, complete the registration process by November 30, 2025, and participate in a mock session by January 3, 2026. Non-adherence to these dates will result in stockbrokers being barred from onboarding new retail clients for API-based algo trading starting January 5, 2026. Pursuant to SEBI’s circular, the NSE has also issued a notification to its trading members reiterating these compliance milestones and timelines.vii
IFSCA Issues Master Circulars for Capital Market Intermediaries in IFSC (Link)
IFSCA following the notification of the IFSCA (Capital Market Intermediaries) Regulations, 2025 (“CMI Regulations”), has, on August 5, 2025, issued Master Circulars for seven categories of capital market intermediaries (“CMIs”) in the IFSC namely, Credit Rating Agencies (Link), Debenture Trustees (Link), Distributors (Link), Environmental, Social, and Governance (“ESG”) Ratings and Data Products Providers (Link), IAs (Link), Investment Bankers (Link), and Research Entities (Link). Each circular consolidates all prior directions on the respective subject-matter into single reference documents, streamlining compliance and enhancing ease of doing business. Across categories, the circulars standardise the regulatory framework on key aspects including registration through the Single Window IT System (“SWIT”), fee payments, governance norms, codes of conduct, AML/CFT and KYC compliance, outsourcing, grievance redressal, reporting, audit, cyber security, and procedures for change in control and surrender of registration. Category-specific provisions address obligations such as risk profiling and implementation services for IAs, disclosure and segregation requirements for ESG providers, distribution responsibilities and fee arrangements for distributors, and independence, transparency, and research report standards for research entities.
IFSCA Extends Deadline for Compliance with Revised Net Worth Requirements under CMI Regulations, 2025 (Link)
The IFSCA has extended the deadline for CMIs in the IFSC to comply with the revised net worth requirements under the CMI Regulations. The original deadline of October 1, 2025, has been extended to December 31, 2025. This extension applies to all CMIs registered with the IFSCA and follows requests from market participants seeking additional time to meet the revised financial norms, ensuring continuity in operations and ease of compliance.
Under the revised framework, CMIs must maintain a minimum net worth of INR 50 lakh (~ USD 56,400) for Category I and II intermediaries and INR 2 crore (~ USD 225,000) for Category III intermediaries, as specified under Regulation 9 of the CMI Regulations.
SEBI amends the Portfolio Managers Regulations (Link)
SEBI has notified the SEBI (Portfolio Managers) (Amendment) Regulations, 2025, effective September 02, 2025. The amendment modifies Regulation 22, requiring portfolio managers to provide clients with a Disclosure Document in a format "as may be specified by the Board" prior to entering into an agreement. Concurrently, the regulations have been updated to delete Schedule V, which previously contained provisions related to the Disclosure Document. This change indicates a move towards prescribing the format and content of the Disclosure Document through SEBI circulars rather than within the regulations themselves.
RBI Issues Directions on Authentication Mechanisms for Digital Payment Transactions, 2025 (Link)
The RBI has issued the Authentication Mechanisms for Digital Payment Transactions Directions, 2025 (“Authentication Directions”) on September 25, 2025. The new framework aims to strengthen the security of digital payment transactions, ensure interoperability across payment systems, and enhance consumer protection in India.
Some key highlights of the Authentication Directions are as follows:
- Mandatory Two-Factor Authentication: All digital payment transactions, except those specifically exempted (such as small value contactless card payments, recurring e-mandates), must be authenticated using at least 2 (two) distinct factors.
- Dynamic Authentication Factor: For all transactions other than card present transactions, at least one authentication factor must be dynamic and unique for each transaction.
- Interoperability and Open Access: Payment system providers must ensure that authentication and tokenisation services are interoperable across different devices, applications, and payment channels.
- Risk-Based Authentication: Issuers may implement additional authentication checks based on transaction risk, device profile, and user behaviour.
- Issuer Responsibility: Issuers are responsible for ensuring the robustness of authentication mechanisms. In case of a breach or non-compliance leading to customer loss, the issuer must compensate the customer.
- Cross-Border Transactions: Issuers must implement mechanisms for validating non-recurring cross-border card-not-present transactions by October 01, 2026, and adopt a risk-based approach for others.
The Authentication Directions apply to all banks and non-bank payment system participants for domestic digital transactions and will come into effect from April 1, 2026, and shall repeal all the circulars listed in Annexure-2 of the Authentication Directions.
Ministry of Finance issues draft rules to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015 (Link)
On August 29, 2025, the Ministry of Finance, Department of Financial Services (“MoF”), published the Draft Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 for public comments. The draft rules seek to align the framework governing foreign investment in Indian insurance companies with the provisions of the Insurance Act and the FEMA and rules thereunder, specifically the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019. The draft rules, inter alia, propose: (i) replacing the existing cap on foreign investment of 74 % (seventy-four percent) in paid-up equity capital in Indian insurance companies with the limit as stipulated under the Insurance Act (which has separately been proposed to be changed to 100 % (One Hundred Percent), and for such foreign investment proposals to be permitted under the automatic route, subject to verification by the IRDAI; and (ii) requiring Indian insurance companies with foreign investment to now have a minimum of 1 (one) among the chairperson of its board of directors, its managing director and its Chief Executive Officer, as resident Indian citizens, as opposed to the earlier requirement which required majority of directors and majority of key managerial personnel to be resident Indian citizens. The MoF had invited objections and suggestions on the draft rules, the deadline for which was September 13, 2025.
SEBI issues consultation paper proposing amendments to Stock Brokers Regulations, 1992 (Link)
SEBI has released a consultation paper to review the provisions of the SEBI (Stock Brokers) Regulations, 1992 (“Stock Broker Regulations”) on August 13, 2025. The major changes proposed pertain to: (i) inclusion of definitions for algorithmic trading, execution only platform and proprietary trading; (ii) amendment to the definitions of clearing member, self-clearing member, professional clearing member and proprietary trading member; (iii) removal of the definition of small investor; (iv) addition of intimation requirement in case of material change in the information submitted at the time of registration; (v) change in the process for obtaining approval for change in control; (vi) enhanced obligations and responsibilities for qualified stock brokers; and (vii) insertion of specific provisions from circulars in the regulations, such as those pertaining to obligations and responsibilities of stockbrokers. SEBI had invited comments stakeholder comments on the consultation paper, the deadline for which was September 03, 2025.
SEBI proposes amendments to the Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems’ (Link)
SEBI, vide consultation paper published in September 2025, proposed amendments to its framework on reporting of “technical glitches” by online brokerages, which, inter alia, include: (i) modifying the definition of technical glitch to exclude the technical glitches occurring after trading hours and technical glitches which are not under the control of stock brokers; and (ii) restricting the applicability of the framework only to brokers offering Internet-based trading or securities trading using wireless technology with more than 10,000 (Ten Thousand) registered clients. The consultation paper was open for feedback until October 12, 2025, with the revised framework proposed to come into effect from November 01, 2025.
SEBI Withdraws Provision on Transaction Charges for Mutual Fund Distributors (Link)
SEBI, through a circular dated August 08, 2025, has withdrawn the provisions of the SEBI Master Circular for Mutual Funds dated June 27, 2024 that permitted Asset Management Companies (“AMCs”) to pay transaction charges to mutual fund distributors (“MFDs”) for subscriptions of INR 10,000 (~ USD 112) and above being brought by such MFDs.viii The circular takes immediate effect and is intended to protect investor interests and ensure orderly development of the securities market.
RBI Eases Procedure for Opening Special Rupee Vostro Accounts (Link)
RBI, vide circular dated August 05, 2025 and corresponding Press Release, has revised the procedure for opening Special Rupee Vostro Accounts (“SRVAs”) under the framework for international trade settlement in Indian Rupees introduced vide circular dated July 11, 2022.ix Authorised Dealer (AD) Category-I banks may now open SRVAs of overseas correspondent banks without referring to the RBI for approval. This procedural change, applicable with immediate effect, is intended to streamline and expedite the process of operationalising SRVAs for cross-border trade invoicing, payment, and settlement in INR.
IFSCA Seeks Feedback on Proposed FinTech Sandbox Framework (Link)
The IFSCA has issued a request for feedback on the proposed FinTech Sandbox Framework. In the said document, the IFSCA has proposed to establish a dedicated regulatory structure for sandbox entities that seek access to its innovation and testing facilities. The proposal builds on the earlier framework for FinTech Entities issued in 2022 and aims to encourage innovation in financial services within the IFSC. The IFSCA has stated that the initiative is intended to further support the growth of fintech activities and strengthen collaboration between domestic and foreign participants.
The draft framework seeks to provide a structured mechanism for granting limited use authorisations to eligible entities for testing financial products or solutions in a controlled environment. It sets out provisions relating to eligibility criteria, application and approval process, boundary conditions, evaluation parameters and possible regulatory relaxations during the testing phase. The framework also proposes four types of sandbox mechanisms, namely the Regulatory Sandbox, Innovation Sandbox, Inter-Operable Regulatory Sandbox and Overseas Regulatory Referral Mechanism, and includes requirements relating to user protection and disclosures. Stakeholders and market participants had been invited to submit their comments by October 10, 2025.
IFSCA Seeks Feedback on Review of Global In-House Centres Regulations, 2020 (Link)
IFSCA on August 5, 2025, pursuant to Regulation 11 of the IFSCA (Procedure for making Regulations and subsidiary instructions) Regulations, 2025, invited public comments on the review of the IFSCA (Global In-House Centres) Regulations, 2020. The review seeks to evaluate the objectives, outcomes, implementation experience, global best practices, and relevance of the framework in the evolving environment, with the aim of further promoting ease of doing business at GIFT-IFSC. Global In-House Centres (“GICs”) were first notified as a financial service on October 16, 2020 and regulations thereon were issued on November 13, 2020. GICs provide support services to financial services group entities including banks, NBFCs, insurers, funds, brokerages, stock exchanges, depositories, and custodians. The framework has positioned GICs as a key driver for digitisation, capability centres, and employment generation in India. In this regard and with a view to review the aforementioned regulations, the IFSCA had sought comments/suggestions from stakeholders, market participants, and the public, the deadline for which was August 30, 2025.
RBI Directs Regulated Entities to Ensure Compliance with Supreme Court Order on Accessibility (Link)
RBI through notification dated August 14, 2025, has directed all entities regulated by the RBI (“RBI REs”) to ensure compliance with the Hon’ble Supreme Court’s order dated April 30, 2025 in Pragya Prasun & Ors. v. Union of India (W.P.(C) 289 of 2024) and Amar Jain v. Union of India & Ors. (W.P.(C) 49 of 2025) w.r.t. following the prescribed accessibility standards to make the process of digital KYC accessible to persons with disabilities, especially facial/eye disfigurements due to acid attacks and visual impairments as applicable. In this regard, the Supreme Court’s direction to RBI REs, inter alia, includes: (i) creation of grievance redressal mechanisms and dedicated helplines to assist persons with disabilities in completing KYC processes; (ii) inclusion of persons with blindness in user testing of apps and websites; and (iii) request to RBI to issue guidelines adopting alternative modes of “liveness” verification beyond blinking of eyes.
SEBI and Market Infrastructure Institutions Issue Compliance Updates on Digital Accessibility and Nomination facilities (Link)
On August 26, 2025, SEBI, NSE (Link) and BSE (Link) issued circulars and notices mandating compliance with the SEBI circular dated July 31, 2025 on accessibility requirements under the Rights of Persons with Disabilities Act, 2016 (“Digital Accessibility Circular”). Trading members of NSE and BSE had been directed to confirm compliance with the circular by August 31, 2025. On August 29, 2025, SEBI extended timelines for REs to comply with the Digital Accessibility Circular. The updated requirements provide that compliance reports and lists of digital platforms should have been submitted by September 30, 2025, appointment of IAAP certified accessibility professionals as auditors must be completed by December 14, 2025, accessibility audits of digital platforms must be concluded by April 30, 2026, and remediation of audit findings must be completed by July 31, 2026. The annual compliance reporting requirement has been extended to April 30, 2027.
BSE Issues Updated Advisory on Impersonation of Investment Advisers (Link) and Research Analysts (Link)
On August 4, 2025, BSE issued 2 (two) compliance notices providing updated guidance on actions to be taken by registered IAs and RAs in cases of impersonation and unauthorised market practices. The updates build on earlier advisories of December 19, 2024 and are intended to strengthen investor protection and market integrity. The framework, inter alia, provides that:
(i) on noticing impersonation, IAs and RAs must file First Information Reports (“FIRs”) with the police including cyber police and in cases arising from investor complaints on SEBI Complaints Redress System (“SCORES”), the FIRs must be enclosed on SCORES for closure of complaints; (ii) they must take up the matter with relevant social media platforms, app stores or authorities such as Apple, Google or the Ministry of Electronics and Information Technology (“MeitY”) for removal of such impersonation content; (iii) they must display details of the impersonation prominently on their website home page including the name of the alleged entity and the police station where the FIR has been filed; (iv) they must notify their clients about impersonation findings and guide them to verify authenticity of offers through official websites, social media handles or customer care contacts, while advising clients not to subscribe to such unauthorised products or schemes; and (v) they must report details and number of impersonation complaints to BSE on a monthly basis within 7 (Seven) days from the end of each month through the online membership portal, effective from August 7, 2025.
SEBI Relaxes Timeline for Stock Brokers to Submit Net Worth Certificate for Margin Trading Facility (Link)
SEBI issued a circular on August 26, 2025, modifying with immediate effect the timelines for submission of net worth certificates by stockbrokers (and harmonising it with financial result declaration timelines applicable to stockbrokers), in order to be eligible to offer margin trading facilities to their clients. The revised framework, inter alia, provides that the half-yearly certificate shall now be submitted within 60 (Sixty) days from the half year ending on March 31 (i.e., no later than May 31 of that year) and within 45 (Fouty Five) days from the half year ending on September 30 (i.e, no later than November 15 of that year).
IFSCA mandates SWIT submission for TechFin and Ancillary Services applications (Link)
On September 3, 2025, the IFSCA issued a public notice informing the market participants that the submission of new applications seeking registration under the IFSCA (TechFin and Ancillary Services) Regulations, 2025 was made effective from September 3, 2025, through the IFSCA’s SWIT.
INDUSTRY DEVELOPMENTS
FIU-IND Directs Crypto Exchanges to Conduct Cybersecurity Audits (Link)
On September 17, 2025, the Government of India, through the Financial Intelligence Unit - India (“FIU-IND”), directed all Virtual Digital Asset Service Providers (“VDA SPs”) to submit a cybersecurity audit certificate. This mandate aims to bolster the security infrastructure of cryptocurrency exchanges operating in the country.
The directive requires VDA SPs to undergo comprehensive cybersecurity audits and submit the audit certificates to FIU-IND. This move underscores the government's commitment to enhancing the security and integrity of the digital asset ecosystem in India.
By enforcing stringent cybersecurity measures, the government seeks to protect investors and the broader financial system from potential cyber threats and vulnerabilities associated with the rapidly growing cryptocurrency sector.
The Ministry of Finance and IRDAI on four years of the AA ecosystem (Link) (Link)
September 2, 2025 marked four years since the launch of the Account Aggregator (“AA”) ecosystem. The MoF commemorated the occasion by highlighting the growing scale of adoption – 112 (one hundred twelve) financial institutions are now live as both Financial Information Providers (“FIPs”) and Financial Information Users (“FIUs”), 56 as FIPs, and 410 as FIUs.
The insurance sector has also seen notable momentum. On the AA Foundation Day, the IRDAI also congratulated the ecosystem for enabling safe, simple, and consent-driven data sharing. The regulator emphasised how data, analytics, and technology under the AA framework can make insurance products more affordable, accessible, and tailored to customer needs. With increased use of AA rails in 2025, more insurers are experimenting and innovating to support the national vision of achieving “Insurance for All by 2047.”
Similarly, over the past year, fintechs have been increasingly recognising the value of participating in the AA framework. Fintechs are able to design and deliver better credit, wealth management, and insurance products by gaining access to financial information in a more seamless fashion.
PA Master Directions Lead to Suspension of Rent Payment Services via Credit Cards by PhonePe, Paytm and Cred (Link)
Following the PA Master Directions issuance on September 15, 2025, fintech platforms such as PhonePe, Paytm and CRED have suspended rent payment services via credit cards. The PA Master Directions require PAs to process payments only for merchants with whom they have a contractual relationship with and prohibits them from facilitating transactions for sellers not fully onboarded through the KYC procedure. Given that landlords are typically not registered as merchants, fintechs can no longer route rent payments without significant compliance changes. Rent payments have historically been a high-volume business for fintechs, particularly those offering credit card reward linked services. The suspension of such payments indicates the significant business impact of the PA Master Directions.
IRDAI launches official website for Bima Sugam India Federation (Link)
On September 17, 2025, the IRDAI announced the launch of the official website of the Bima Sugam India Federation, marking a significant step toward the operationalisation of the Bima Sugam digital insurance platform/ Bima Sugam is envisaged as a unified, one-stop digital marketplace for insurance services, integrating insurers, intermediaries, and policyholders on a single platform. It aims to simplify the purchase, renewal, servicing, and settlement of insurance policies, while ensuring transparency. According to the IRDAI, platform features will be rolled out in phases, focusing on security, compliance, and scalability. The initiative is expected to improve insurance penetration and support the regulator’s long-term vision of achieving “Insurance for All by 2047.”
MARKET UPDATES
Dream Sports Pilots Financial Services App Dream Money
Dream11’s parent company Dream Sports is testing a new financial services app called Dream Money, which has been under pilot for the past few months and is yet to be launched. The app, published by Dream Sports entity Dreamsuite, will offer services such as daily gold purchases starting from INR 10 (~ USD 0.11) and fixed deposits from INR 1,000 (~ USD 112). The move comes after Dream Sports was compelled to close its real-money gaming operations following the recent restrictions on online-real money gaming,3 though it continues to run platforms such as Dream Set Go, FanCode, Dream Game Studios and Dream Sports Foundation.x
Aditya Birla Finance, PhonePe among nine NBFCs to surrender RBI registration
9 (Nine) NBFCs, including Aditya Birla Finance Limited and PhonePe Technology Services Private Limited, have surrendered their Certificate of Registration (“CoR”) to the RBI due to: (i) cancellation of CoR due to exit from the Non-Banking Financial Institution business; or (ii) meeting the criteria prescribed for an unregistered Core Investment Company that does not require registration; or (iii) the NBFCs ceasing to be a legal entity on account of amalgamation / merger / dissolution / voluntary strike-off, etc.xi Additionally, the RBI cancelled the CoRs of 31 (Thirty-One) NBFCsxii and restored the CoRs of 2 (Two) NBFCsxiii after considering the orders passed by the Appellate Authority / Courts.
Cancelations of Registration Certificates of NBFCs
RBI has cancelled the registration certificates of 16 (Sixteen) NBFCs including Sharmistha Investments Private Limited, Praptee Savings and Investment (India) Limited and Wadhawan Global Capital Limited. Furthermore, 10 (Ten) NBFCs, including Zenith Securities and Investment Limited, Poonawalla Investments and Industries Private Limited and Kansal Fincap Limited have surrendered their registration certificates to RBI.xiv
Kerala HC stays PMLA proceedings against Nium
The Kerala High Court has stayed money laundering proceedings against cross-border payments company Nium for one month. The matter stems from 11 (Eleven) FIRs filed in Kerala and Haryana, where individuals alleged extortion after taking small loans via fraudulent mobile apps. These apps reportedly harassed users using personal data (contacts, device info) and blackmailed them. The Enforcement Directorate alleged that over INR 230 crore (~USD 25.9 million) were aggregated via more than 400 (Four Hundred) suspicious “mule” bank accounts, layered through shell entities, and disguised as payments for software/digital imports before being routed out of India.
The court noted that Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 requires hearing the accused before cognizance, and Nium has also sought quashing of the complaint and release of attached assets. xv
Delhi HC Orders WazirX’s Parent Entity to Disclose Binance Documents
The Delhi High Court ("Delhi HC") has issued orders to Zettai Pte Limited ("Zettai"), the Singapore-based parent entity of WazirX, a crypto exchange, directing Zettai to disclose details of its acquisition by Binance, a global crypto player, along with details of its ongoing restructuring proceedings before the Singapore High Court.xvi The next date of hearing is on November 12, 2025, and the parties had been ordered to file their replies by October 29, 2025. xvii
RBI Approvals to Operate as Payment Aggregators
The RBI has granted in-principle authorisations to PayTM Payments Services Private Limited ("PayTM")xviii and IRCTC Payments Limitedxix to act as online payment aggregators under the Payments and Settlement Systems Act, 2007 and RBI’s Guidelines on Payment Aggregators and Payment Gateways.xx
NPCI to Discontinue Person-to-Person Pull (Collect) Transactions on UPI from October 1, 2025
The National Payments Corporation of India (“NPCI”) has announced that Unified Payments Interface (“UPI”) users will no longer be able to initiate person-to-person (“P2P”) pull or collect requests to receive money from others, effective October 01, 2025. These transactions, which enable a beneficiary to initiate a payment request requiring the payer to merely authorise the transaction, are being discontinued with the objective of mitigating fraud and online scams arising from inadvertent approvals by users. NPCI has directed payment service providers to implement requisite system changes to ensure that such requests are not initiated, routed, or processed beyond the effective date.
Prior to this, NPCI had already imposed restrictions on merchant collect transactions, including capping collect requests for non-verified merchants and smaller P2P merchants at INR 2000 (~ USD 17), and instructing banks to restrict transactions exceeding this limit through features such as “Share Intent Link and Pay” and “QR Share and Pay.xxi” NPCI’s objective behind this move is to curb fraud and online scams, where users would unknowingly approve transactions.4xxii
Digital Payments Companies Seek Exemptions from DPDP Act
Companies in the digital payments space, including Google Pay, PhonePe and Amazon Pay, along with the NPCI have made submissions to MeitY seeking concessions from provisions on consent in the Digital Personal Data Protection Act, 2023 ("DPDP Act").xxiii Given that the DPDP Act requires explicit consent for every data processing activity, the aforementioned entities have specifically sought exemptions from requiring user-consent for each transaction, including recurring payments (which operate basis auto-debit mandates) citing that implementing the same would be onerous on these entities. They have also indicated that such consent mechanisms may lead to technical difficulties and increased cost, which in-turn could negatively impact growth of these entities and competition in the market.xxiv
Parliamentary Standing Committee to Study Virtual Digital Assets
The Parliamentary Standing Committee on Finance has selected the subject “A Study on virtual digital assets (“VDAs”) and the Way Forward” for scrutiny during 2024-25, as listed in the Lok Sabha Bulletin Part II on August 14, 2025.xxv The decision follows submissions from Web3 and digital asset stakeholders, including Bharat Web3 Association and CoinDCX, seeking innovation-friendly regulations to strengthen Web3 economy. Industry representatives have welcomed the move as a positive step for regulatory clarity and market confidence.xxvi
Paytm Board Approves Investments and Restructuring Moves as it Shuts RMG Operations
Paytm’s board has approved an investment of INR 300 crores (~ USD 33.8 million) in its investment and wealth management subsidiary Paytm Money. It also cleared an investment of INR 155 crores (~ USD 17.5 million) in Paytm Services Pvt Ltd (“PSPL”), which provides manpower supply services, and the transfer of a 55% (Fifty-Five Percent) stake in its real money gaming platform, First Games from Paytm Cloud Technologies to PSPL for INR 140 crores (~ USD 15.8 as part of its group restructuring. Paytm further announced the discontinuation of First Game’s real money gaming operations following the government’s recent regulation in this regard.xxvii
RBI Imposes Penalty on Ayodhya Finlease for Breach of NBFC Directions on Shareholding Change
RBI has imposed a monetary penalty on Ayodhya Finlease Limited for failure to obtain prior written permission of RBI for change in shareholding in excess of 26% (Twenty Six Percent) of its paid-up equity capital.xxviii
Parliamentary Committee calls for regulation of financial influencers
The Parliamentary Standing Committee on Home Affairs, in its 254th Report on Cyber Crime- Ramifications, Protection and Prevention tabled in August 2025, has recommended tighter oversight of financial influencers on social media. It has urged SEBI to restrict financial advice to registered advisors, introduce a verified tick system, and mandate disclosure of registration numbers, disclaimers and conflicts of interest. The said Committee also suggested collaboration with social media platforms to detect unregistered finfluencers and the use of artificial intelligence tools for monitoring. A dissent note by MP Priyanka Gandhi Vadra supported the verified tick but called for mandatory conflict disclosures on every video with penalties for non-compliance.xxix
IFSCA Issues Consultation Paper on Stewardship Code in IFSC
IFSCA on August 6, 2025 released a consultation paper proposing a framework for a Stewardship Code in IFSC for Fund Management Entities (“FMEs”) and Institutional Investors (“Stewardship Code”). The proposed Stewardship Code seeks to enhance investor protection and promote good corporate governance by requiring institutional investors to monitor investee companies, engage on ESG issues, manage conflicts of interest, adopt voting policies, collaborate with other investors, and ensure transparent disclosure and reporting of stewardship responsibilities. IFSCA has invited comments stakeholder comments on the framework, the deadline for which was August 27, 2025.xxx
SEBI Approves Groww’s Initial Public Offering
Indian stock broking platform Groww5 has received approval from SEBI for its confidentially filed initial public offering (“IPO”). The company, last valued at USD 7 Billion, is seeking a valuation between USD 8-9 Billion and plans to list in the last quarter of 2025. Reportedly, the IPO is expected to comprise a mix of fresh share issuance and partial stake sale by existing investors.xxxi
RBI Committee Submits Report on Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector
The RBI has released the report of the Committee on the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector. Set up in December 2024, the Committee engaged with diverse stakeholders and has proposed 7 (Seven) Sutras to serve as the foundational principles for artificial intelligence adoption, supported by 26 (Twenty Six) actionable recommendations across 6 (Six) strategic pillars. The framework seeks to promote innovation while ensuring adequate safeguards against risks, aiming to balance technological advancement with risk mitigation in the financial ecosystem.xxxii
NPCI Increases the per Transaction Limits for specific categories in UPI
NPCI, vide notification dated August 24, 2025 had increased the per transaction limits for entities falling in the category aligned to Tax Payments to INR 5 lakhs (~ USD 5632). Pursuant to requirements from the market on extending higher per transaction limits for additional categories of transactions in UPI, NPCI has enhanced per transaction limits for specific categories along with additional guidelines. This, inter alia, includes: (i) applicability of enhanced limits to the merchants falling in the category of ‘Verified Merchant’ designated by the NPCI which inter alia includes those in insurance, capital market, travel, jewellery, credit card bill payments etc.; (ii) direction to acquiring members to ensure that such enhanced limit is applicable to such merchants contingent on their compliance with specified guidelines; (iii) permitting member banks to continue exercising their discretion to set internal limits on the basis of their internal policy, within the overall ceiling specified by NPCI; and (iv) reiterating that per transaction limit for P2P continues to operate as per existing guidelines. Member Apps and PSPs had been asked to take cognizance of the same and undertake required changes to ensure compliance by September 15, 2025.xxxiii
National Payments Corporation of India grants TPAP approval to Viyona Fintech
National Payments Corporation of India has approved Viyona Fintech as a third-party application provider for UPI services. The company will offer digital payment solutions through its flagship product GraamPay, aimed at farmers, small merchants, and rural communities.
Viyona also plans to launch a farmers’ marketplace on GraamPay to enable direct buyer access, faster settlements, and wider UPI adoption.xxxiv
Paytm relaunches BNPL as UPI credit line “Paytm Postpaid”
Paytm has relaunched its Buy-Now-Pay-Later product under a new scheme called Paytm Postpaid, enabling users to access short-term credit via UPI. The service, rolled out in partnership with Suryoday Small Finance Bank, offers users up to 30 days of interest-free credit, under a “Spend Now, Pay Next Month” model.xxxv
With Paytm Postpaid, customers can transact using UPI at merchant QR codes, online checkouts, bill payments, or recharges without immediate debit from their bank accounts. The service is currently being offered to a select user base based on spending behavior, with plans for broader rollout in phases.xxxvi
Vested Finance halts crypto ETFs for Indian investors
Vested Finance has stopped offering new cryptocurrency exchange traded funds (“ETFs”) to Indian residents, effective September 15, 2025, following IFSCA’s revised Global Access Circular excluding crypto assets. Existing investors can continue to hold or sell until the October 31, 2025 compliance deadline.
Affected funds include iShares Bitcoin Trust, iShares Ethereum Trust, Fidelity Wise Origin Bitcoin Fund, ARK 21Shares Bitcoin ETF, and Valkyrie Bitcoin Fund. The move reflects tighter regulatory oversight of crypto in India, including VDA taxation and AML reporting requirements.xxxvii
Paytm Money partners with Jio BlackRock to launch AI-led equity fund
Paytm Money has partnered with Jio BlackRock to offer subscriptions to the Jio BlackRock Flexi Cap SAE Fund, an AI-driven active equity fund leveraging machine learning to analyse large datasets of over 1,000 (one thousand) Indian stocks. The fund, open for subscription from September 23 to October 7, allows investments starting at INR 500 (five hundred) through Systematic Investment Plan or lump sum modes. The partnership combines Paytm Money’s digital investment platform with Jio BlackRock’s asset management expertise to promote wider retail participation in equity markets.xxxviii
RBI grants authorisation to PhonePe as a Payment Aggregator as PhonePe gears up for IPO
Walmart-owned fintech major PhonePe has received final authorisation from the RBI to operate as a PA. This follows over two years after the company was granted in-principle approval by the RBI in August 2023. The authorisation enables PhonePe to onboard merchants and process digital payments in compliance with the RBI’s PA framework, which mandates stronger consumer protection, data localisation, and grievance redressal mechanisms.xxxix
In parallel, PhonePe has filed draft papers with SEBI through the confidential pre-filing route for its much-anticipated initial public offering. The company is reportedly seeking to raise around INR 12,000 crore (~ USD 1.35 billion) through a pure offer for sale (OFS), with existing shareholders (i.e. Walmart, Tiger Global, and Microsoft) expected to collectively dilute around 10% (Ten Percent) of their stake.xl
MAJOR DEALS
We have set out in the table below some of the major deals for the month of August and September, 2025:
| Entity | Deal Value and Investors |
| Seeds Fincap, an NBFC | Raised USD 5.7 (five point seven) million through a funding round led by Z47 and Lok Capital.xli |
| Zype, a digital lending startup | Raised USD 10.2 (ten point two) million through a fresh round led by Unleash Capital Partners.xlii |
| DPDZero, a debt collection startup | Raised USD 7 (seven) million through a round led by GMO Venture Partners.xliii |
| Fibe, a digital lending platform | Raised USD 25 (twenty-five) million in debt from several financial institutions including Franklin Templeton Alternative Investments Fund, India.xliv |
| GoKiwi, a fintech startup6 | Raised USD 24 (twenty-four) million through a funding round led by Vertex Ventures Southeast Asia and India.xlv |
| CredRight, an NBFC | Raised USD 10 (ten) million through a funding round led by Abler Nordic.xlvi |
| Axio, a digital lending startup7 | Acquired by Amazon, valued by approximately USD 200 (two hundred) million.xlvii |
| Finbox, a B2B fintech SaaS startup | Raised USD 40 (forty) million in its Series B round led by Westbridge Capital.xlviii |
| InCred Money, a wealthtech platform | Raised USD 30 (thirty) million from a group of investors, including Manipal Group chairman Ranjan Pai, former Deutsche Bank executive Ram Nayak, Mankind Family Office, among others.xlix |
| Recur Club, a debt marketplace | Raised USD 50 (fifty) million in Series A funding round led by InfoEdge Ventures.l |
| GrowXCD Finance, a NBFC8 | Raised USD 22.8 (twenty-two point eight) million through a funding round led by Blue Earth Capital and Prosus Ventures.li |
[1] https://www.rbi.org.in/commonman/English/scripts/notification.aspx?id=2607
[1]https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12561&Mode=0
[1]https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12848&Mode=0
[1] Additionally, vide the amendments, the RBI has repealed earlier circulars on ‘Prevention of Money laundering Act, 2002-Obligations of NBFCs in terms of Rules notified thereunder’ dated November 13, 2009, which dealt with perseveration period for records, and circular on ‘NBFCs - Prevention of Money-laundering Amendment Rules, 2009 – Obligation of Banks/Fis’ dated April 23, 2010, which dealt with compliance with the rules enclosed with such circular.
[1] The revised norms will apply prospectively, with existing entities required to align their operations with the new requirements within the prescribed timelines.
[1] SEBI had invited comments on the aforementioned proposals, the deadline for which was August 28, 2025.
[1] https://nsearchives.nseindia.com/content/circulars/INVG70541.zip
[1] Paragraphs 10.4.1.b and 10.5 of the SEBI Master Circular for Mutual Funds dated June 27, 2024.
[1] https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12358&Mode=0
[1] https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61205
[1] https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61206
[1] https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61207
[1];https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61015; https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61012,
[1] https://inc42.com/buzz/delhi-hc-orders-wazirx-parent-to-disclose-binance-acquisition-papers/
[1] https://delhihighcourt.nic.in/app/showlogo/1760786111_0419db3618e25d0e_587_149692024.pdf/2025
[1] https://inc42.com/buzz/irctc-payments-gets-rbi-nod-to-operate-as-payment-aggregator/
[1] https://rbi.org.in/scripts/Bs_viewcontent.aspx?Id=4236
[1]https://www.npci.org.in/PDF/npci/upi/circular/2025/UPI-OC-No-220-FY-2025-26-Discontinuing-the-service-of-UPI-Collect-Request-for-Person-to-Person-P2P-transactions.pdf; https://www.medianama.com/2025/08/223-npci-p2p-collect-payments-oct-1-what-it-means/
[1] https://sansad.in/getFile/bull2mk/2025/14082025.pdf?source=loksabhadocs
[1]https://inc42.com/buzz/paytm-to-invest-inr-455-cr-in-subsidiaries-shuts-rmg-operations/?itm_medium=website&itm_source=dl-industry-profile&itm_campaign=stories-tab&itm_content=article&itm_term=3https://inc42.com/buzz/paytm-undertakes-restructuring-to-bring-key-units-under-direct-ownership/#:~:text=In%20August%202025%2C%20Paytm's%20board,provides%20manpower%20and%20related%20services.
[1] https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61065
[1]https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61018
[1] https://www.medianama.com/2025/09/223-vested-finance-stops-crypto-etfs-india/
[1] https://inc42.com/buzz/paytm-money-partners-jioblackrock-to-float-ai-led-active-equity-fund/
[1] https://www.medianama.com/2025/09/223-phonepe-confidential-1-3b-ipo-with-sebi-15b-valuation/
[1]https://inc42.com/buzz/debt-collection-startup-dpdzero-nets-7-mn-from-gmo-venture-partners-others/
[1]https://inc42.com/buzz/fibe-secures-inr-225-cr-debt-to-expand-lending-play/
[1]https://inc42.com/buzz/credright-raises-10-mn-to-expand-lending-to-small-businesses/
[1] https://inc42.com/buzz/finbox-raises-40-mn-to-scale-b2b-credit-infrastructure/
[1] https://inc42.com/buzz/incred-money-raises-inr-250-cr-at-inr-1650-cr-valuation/
[1] https://inc42.com/buzz/recur-club-raises-50-mn-to-expand-its-debt-marketplace/
This article is for information purposes only. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein. Although we have endeavoured to accurately reflect the subject matter of this article, we make no representation or warranty, express or implied, in any manner whatsoever in connection with the contents of this article. No recipient or reader of this article should construe it as an attempt to solicit business in any manner whatsoever.
