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How FATF Drives Indian Banking Compliance: The Relay Chain That Never Stops
On February 25, 2011, the Financial Action Task Force issued a statement naming Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe as jurisdictions with strategic deficiencies in anti-money laundering controls. Within weeks, the RBI had converted that statement into a circular addre
How RBI Regulations Reach the Branch Counter: From Statute to Circular to Compliance
On a Monday morning in December 2025, a branch manager at a primary urban co-operative bank in Maharashtra opened her email to find a compliance advisory from head office. The November 28 consolidation had taken effect. Nine thousand four hundred and forty-five circulars — some dating to the 1970s —
The 90-Day Rule That Took Twenty Years to Enforce
In March 2018, the gross non-performing assets of Indian banks crossed Rs 10 lakh crore — roughly 11.5% of all outstanding advances. The number was shocking, but not because the loans had suddenly gone bad. Most had been bad for years. What changed was that the RBI finally forced banks to admit it.
The Rs 1 Lakh Line: How One Threshold Shapes Who Earns What on Savings
For forty-two years, every savings account in India paid exactly the same interest rate. From 1969, when Indira Gandhi nationalised fourteen banks to direct credit toward social priorities, until October 25, 2011, the Reserve Bank of India set the savings deposit rate by administrative fiat. For mos
How the RBI Uses District Weights to Steer Credit Where Banks Won't Go
In 2019, a farmer in Latehar district, Jharkhand, walked into a bank branch and was told there were no agriculture loan products available for his landholding size. That same week, a real estate developer in south Mumbai closed a construction finance facility worth more than the entire annual credit
The Aadhaar Moment: When the Supreme Court Rewrote KYC Overnight
On the morning of September 26, 2018, every compliance officer in every Indian bank was watching the same live stream. The Supreme Court of India was about to deliver its verdict in Justice K.S. Puttaswamy (Retd.) & Anr. v. Union of India — and whatever the five-judge bench decided would determine w
Why NBFCs Aren't Banks: The Deposit, Capital, and Governance Divide
When Bajaj Finance crossed Rs 2 lakh crore in assets, it became larger than most scheduled commercial banks in India. It lends to consumers, finances businesses, and manages a balance sheet that would make a mid-size bank envious. Yet it cannot issue a chequebook, cannot offer a savings account, and
How the RBI Protects Banks From Cyber Attacks: The Complete Security Framework
In February 2016, hackers used stolen SWIFT credentials to send thirty-five fraudulent transfer requests from Bangladesh Bank's account at the Federal Reserve Bank of New York. They got away with $81 million before a spelling error in one request triggered a manual review that stopped the rest. The
What Basel III Actually Changed for Indian Banks
In September 2008, Lehman Brothers filed for bankruptcy with $639 billion in assets and a leverage ratio that made its equity look like a rounding error. Within weeks, governments were writing blank cheques to keep their banking systems alive. The question was not whether banks needed more capital.
How Much Money Can You Send Abroad? The LRS Framework
In February 2004, the Reserve Bank of India did something that would have been unthinkable a decade earlier: it told every resident Indian that they could send up to $25,000 abroad each year, for almost any purpose, without asking the RBI for permission. The A.P. (DIR Series) Circular No. 64 that la
Housing Finance: How the RBI Took Over from NHB and What It Means for Your Home Loan
On November 20, 2019, the Reserve Bank of India superseded the board of Dewan Housing Finance Corporation Limited. The order, issued under Section 45-IE of the RBI Act, cited "governance concerns and defaults by DHFL in meeting various payment obligations." DHFL — once India's third-largest housing
Why the RBI Cares About Climate Risk Now
In July 2021, the Reserve Bank of India's Financial Stability Report carried a new section — climate risk. Not buried in an appendix, but positioned as an emerging systemic concern alongside credit risk and liquidity risk. Three months earlier, the RBI had quietly joined the Network for Greening the
What Happens After a Loan Goes Bad: From NPA to ARC to Resolution
In January 2014, India's gross non-performing assets stood at 4.3% of total advances. By March 2018, they had breached 11.5% — the highest in two decades. Somewhere between those two numbers, the entire regulatory architecture for handling bad loans was dismantled and rebuilt. The Reserve Bank intro
Why Co-operative Banks Keep Failing: The Governance Crisis the RBI Can't Fully Fix
On the evening of September 23, 2019, Sanjay Gulati waited outside a branch of Punjab & Maharashtra Co-operative Bank in Mumbai. He had come to withdraw money for his daughter's college fees. The RBI had just imposed restrictions limiting withdrawals to Rs 1,000 per depositor. Over the following day
How India Built Its Bond Market: From Physical Certificates to NDS-OM
In 1995, a government securities dealer in Mumbai picked up a telephone, called three brokers, haggled over a price nobody else could see, and settled the trade by physically delivering a paper certificate to the buyer's office. The government of India — borrowing hundreds of thousands of crores ann
What SLR and CRR Actually Do to Your Bank's Balance Sheet
In July 2008, the Reserve Bank of India raised the Cash Reserve Ratio to 9 per cent — forcing every scheduled commercial bank to park nine rupees out of every hundred in deposits with the RBI, earning nothing. The notification increasing CRR by 25 basis points (since withdrawn) cited "a review of th
Why Regional Rural Banks Have Different Rules Than Commercial Banks
In December 2005, the Reserve Bank of India sent a circular to every Regional Rural Bank in the country with an instruction that would have been absurd if addressed to SBI or HDFC Bank: open zero-balance savings accounts for people who cannot maintain a minimum balance. The directive on financial in
What the RBI's Financial Stability Report Actually Tells You
In September 2018, the Reserve Bank of India published the 18th issue of its Financial Stability Report. Buried in the network analysis section was a warning: non-banking financial companies had become so deeply interconnected with the banking system that the failure of the largest NBFC could cause
Cards, Wallets, and the Tokenisation Revolution: How India Secured Digital Payments
In the summer of 2020, a data breach at an Indian payment aggregator exposed the card numbers, expiry dates, and CVVs of nearly 3.5 million customers. The stolen data surfaced on the dark web within days. For the Reserve Bank of India, this was the scenario it had been trying to prevent since at lea
The Rules Banks Must Follow When They Outsource — And Why the RBI Still Holds Them Responsible
In June 2022, the Reserve Bank of India discovered that several banks had effectively become backend utilities for fintech apps. The fintechs acquired the customers, designed the user experience, ran the credit algorithms, and set the loan terms. The banks supplied their licence and their balance sh
What Your Credit Score Actually Means — And Who Controls It
In January 2001, a company called Credit Information Bureau (India) Limited was incorporated in Mumbai with a modest mandate: collect data on defaulting borrowers so banks could stop lending to them. Twenty-five years later, that company — now TransUnion CIBIL — is one of four credit bureaus holding
How India Licenses New Banks: From Universal to Payments to Small Finance
In April 2014, when the Reserve Bank of India announced that only two applicants — Bandhan Financial Services and IDFC — would receive banking licences out of more than twenty-five who applied, the question across India's financial sector was not who won, but why so few. The answer reveals something
How District Credit Plans Decide Who Gets a Loan: The Lead Bank Scheme
In 1969, the Indian government nationalised fourteen banks and immediately confronted an uncomfortable truth: every one of those banks had branches in Bombay, Delhi, and Calcutta, and almost none in the districts where eighty percent of the population lived. The Nariman Committee, constituted that s
From Self-Help Groups to Regulated Microfinance: How India Formalised Small Lending
In a village in rural Andhra Pradesh in the early 1990s, ten women pooled twenty rupees each into a common fund. They had no bank accounts, no collateral, no credit history. What they had was each other. When one member needed a loan, the group decided collectively whether to lend — and the social p