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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 The notification increasing CRR by 25 basis points (since withdrawn) cited "a review of th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
Why Every Bank Branch Has an MSME Lending Target
In 2018, the RBI's Expert Committee on MSMEs — chaired by former SEBI chairman U.K. Sinha — toured the country and heard the same complaint from small business owners everywhere: banks counted medium enterprises toward their MSME targets, claimed compliance, and left the smallest businesses unfunded
What Foreign Investors Can and Cannot Buy in Indian Markets
In September 2013, a single global fund manager sat in Mumbai trying to register three separate entities with SEBI — one as an FII, one as a sub-account, and one as a qualified foreign investor. Each had different forms, different caps, and different reporting requirements, all for the purpose of bu
Why Your Export Payment Must Arrive in 9 Months: India's Trade Forex Controls
In May 2020, with global supply chains frozen and Indian exporters unable to collect on invoices already shipped, the Reserve Bank of India did something it almost never does — it relaxed the export realisation deadline. The standard nine-month window was stretched to fifteen months, because COVID-1
How India Built the World's Largest Real-Time Payment System
In March 2004, the Reserve Bank of India switched on RTGS — Real Time Gross Settlement — for the first time. A high-value transfer between two banks settled in seconds rather than days. Twenty years later, India's Unified Payments Interface processed over 14 billion transactions in a single month, m
What Happens to a Wilful Defaulter? The Framework Banks Use to Name, Shame, and Restrict
In 2018, Vijay Mallya fled India with over Rs 9,000 crore in unpaid loans. Nirav Modi engineered a Rs 13,000-crore fraud at Punjab National Bank. Mehul Choksi vanished to Antigua. These cases triggered a national reckoning: why could borrowers who deliberately refused to repay — or actively looted b
From MCLR to EBLR: Why Your Home Loan Rate Finally Moves With the Repo
For the better part of two decades, the Reserve Bank of India faced an exasperating problem: it would cut the repo rate, announce the decision at a press conference, and then watch as commercial banks simply refused to pass the reduction on to borrowers. Between 2015 and 2019, the RBI cut the repo r
Who Controls Your Lending App? How the RBI Cracked Down on Digital Lending
In 2020, a borrower in Hyderabad took a Rs 10,000 loan from an app on his phone. Within weeks, the app had accessed his entire contact list, sent threatening messages to his family members, and demanded repayment of Rs 45,000 — interest, processing fees, and penalties that were never disclosed upfro
How the RBI Tiered 10,000 NBFCs by Risk: The Scale Based Regulation Story
In September 2018, IL&FS — Infrastructure Leasing & Financial Services — defaulted on its commercial paper obligations. Within weeks, the contagion spread through the mutual fund industry, froze the commercial paper market, and triggered a liquidity crisis that took down DHFL and nearly brought seve
Why Banks Must Lend to Farmers — And What Happens When They Don't
In 1991, India liberalised its economy but kept one regulatory lever firmly in place: mandatory agricultural lending targets. The reason was straightforward. Agriculture employed roughly half the workforce, yet banks — left to their own credit allocation — would lend almost entirely to safer urban b
The $10 Million Question: How India Liberalised Forex Hedging
For twenty years, an Indian company that cancelled a forward contract on a $10 million receivable was barred from rebooking it. The shipment could be delayed, the counterparty could renegotiate, the commercial reality could shift entirely — none of it mattered. Once cancelled, the hedge was gone. Th
When Your Company Borrows From Abroad: How the ECB Framework Controls Foreign Debt
In the summer of 1991, India's foreign exchange reserves dropped below two weeks of import cover, and the country came within days of defaulting on its external obligations. The crisis was triggered partly by short-term external commercial borrowings that could not be rolled over — foreign banks ref
How India Opened Its Doors to Foreign Capital — Sector by Sector
In December 2014, the Indian government did something no one in the railways ministry thought politically possible: it opened railway infrastructure — a sector that had been explicitly prohibited from foreign investment since independence — to 100% FDI under the automatic route, in a single notifica
Why Can an NRI Buy a Flat but Not a Farm? The Property and Deposit Rules That Catch Every Diaspora Indian
In September 2013, when the rupee was in freefall — touching 68 to the dollar — the RBI opened a special swap window for FCNR(B) dollar deposits (RBI8388), offering banks concessional rates to attract NRI dollars. The move worked: over $34 billion flowed in within weeks. But the episode exposed a de
Banks Under RBI Directions: What Section 35A Means for Your Deposits
As of early 2026, over 200 co-operative banks across India are operating under Section 35A directions from the Reserve Bank — their lending frozen, their deposit acceptance restricted, their management decisions subject to RBI approval. Some have been under these restrictions for years. Others were
What the RBI Is Changing Right Now: The Active Draft Pipeline
Every regulation the RBI issues has a moment when it exists as a draft — placed on the website, open for public comment, waiting for stakeholder feedback before becoming final. That moment is where lawyers, compliance officers, and industry bodies have their only formal chance to shape the outcome.