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The Reserve Bank of India (RBI) has released its Statement on Developmental and Regulatory Policies, outlining key initiatives and regulatory updates across financial markets, banking regulations, and payment systems.
In financial markets, the RBI announced that foreign investors in International Financial Services Centres (IFSCs) will be permitted to invest in Sovereign Green Bonds (SGrBs), expanding participation beyond the current FPI routes. Additionally, a mobile application for the RBI Retail Direct Scheme is under development, enabling individual investors to buy and sell government securities on the go.
On the regulatory front, the RBI is reviewing the Liquidity Coverage Ratio (LCR) framework to account for emerging risks from rapid digital withdrawals during times of stress, with a draft circular to be issued for stakeholder feedback. Small Finance Banks will also be allowed to deal in permissible rupee interest rate derivative products, expanding hedging options beyond Interest Rate Futures for managing balance sheet and commercial risks.
In the payments and fintech space, the RBI plans to enable Unified Payments Interface (UPI) access for cash deposit facilities at Cash Deposit Machines (CDMs), complementing existing card-based functionality. UPI payments will also be extended to Prepaid Payment Instruments (PPIs) via third-party applications, enhancing flexibility for PPI holders. Furthermore, the distribution of retail Central Bank Digital Currency (CBDC) will be expanded through non-bank payment system operators, broadening access and testing the platform’s resiliency for multi-channel transactions.
These measures are part of the RBI’s continued effort to deepen financial inclusion, promote technological innovation, and strengthen the resilience of the financial system.
[RBI]