Banking Awareness of 5, 6, 7 and 8 December 2025

Topic: Banking System

1. Fino Payments Bank has received in-principle approval from RBI for conversion to a small finance bank.

• RBI evaluated Fino Payments Bank’s request as per procedure in  the guidelines for ‘on tap’ licensing of SFBs in the private sector.
• As per the norms, resident-controlled payments banks with five years of operations are eligible for conversion into SFBs.
• Earlier this year, AU SFB was granted in-principle approval by RBI to convert into an universal bank.
• The application of Jana SFB to convert into an universal bank was returned by RBI earlier this year.
• Ujjivan SFB had also applied for universal bank license. Its application is pending with RBI.
• Now only few operational and large scale payments bank remain in the country.
• These include Airtel Payments Bank, Jio Payments Bank and India Post Payments Bank.
• In 2018, RBI barred Paytm Payments Bank from accepting fresh deposits due to violation of regulatory norms. The ban continues to exist till date.
• The payments bank came into being originally to support underserved regions with basic transactions.
• As per RBI's rules, payments banks cannot lend and cannot accept more than ₹2 lakh from each depositor.
• An SFB shall open at least 25% of branches in unbanked rural areas.
• Fino started operations as a payments bank in 2017.
• A payments bank can apply to transition into an SFB after five years of operations.
• This eligibility criteria is subject to meeting compliance and regulatory requirements.

Topic: Appointments

2. Vikram Sahu's appointment as CEO of Bank of America N.A. in India (BANA India) has been approved by RBI.

• RBI has approved Sahu's appointment for 3 year term.
• He will be CEO of Bank of America NA in India (BANA India) alongside his existing responsibilities as India Country Executive.
• Earlier India CEO of the bank is Kaku Nakhate. Kaku Nakhate has been appointed as chair of India.
• Kaku Nakhate will focus on strengthening relationships with key clients.  
• Sahu will report to Jin Su, who is President of Asia Pacific.
• As CEO, he will chair the local management team of BANA India.
• He will continue to be a member on the Asia-Pacific Executive Committee.

Topic: RBI

3. RBI said that SBI, HDFC Bank, and ICICI Bank will remain Domestic Systemically Important Banks (D-SIBs).

• D-SIB designated banks must keep additional common equity tier 1 (CET1). This must be in addition to the capital conservation buffer.
• The additional CET1 requirements for these banks shall remain at the level of last year.
• Additional CET 1 requirement for SBI is 0.80% as a percentage of its risk weighted assets.
• Additional CET 1 requirement for HDFC Bank is at 0.40% and for ICICI Bank is at 0.20% of risk-weighted assets.
• SBI must allocate 12.3% capital against each loan. HDFC Bank and ICICI Bank must allocate 11.9% and 11.7%, respectively of the loan amount as capital.
• RBI uses size, interconnectedness, substitutability, and operational complexity as indicators  for identifying a bank as D-SIB.
• In its December 2023 Framework for Dealing with D-SIBs, the RBI highlighted that such banks are viewed as “too big to fail”.

Topic: Indian Economy/Financial Market

4. India’s GDP growth forecast raised to 7.3% by RBI.

• The GDP growth forecast for India was raised to 7.3% for 2025-26 by the Reserve Bank of India, up from the earlier 6.8%.
• The revision was attributed to strong agricultural prospects, GST rate cuts, low inflation, and healthy corporate and banking balance sheets.
• RBI Governor Sanjay Malhotra said that the economy experienced a rare “Goldilocks period” due to Q2 growth of 8.2% and inflation at 1.7%.
• Domestic factors such as benign inflation, continued GST rationalisation, and conducive monetary conditions are expected to support sustained growth.
• Services exports are likely to remain robust, while merchandise exports face certain headwinds.
• Real GDP growth projections for Q3 and Q4 of 2025-26 were set at 7.0% and 6.5%, respectively, while Q1 and Q2 of 2026-27 are projected at 6.7% and 6.8%.
• The first half of 2025-26 benefited from income tax and GST rationalisation, softer crude oil prices, government capital expenditure, and healthy domestic demand.
• High-frequency indicators suggest that domestic economic activity is holding up in Q3, supported by festival spending, GST benefits, and steady rural and recovering urban demand.

Topic: RBI

5. On 5 December 2025, RBI lowered the repo rate by 25 basis points to 5.25 percent (new repo rate).

• RBI Governor Sanjay Malhotra informed the decision after Monetary Policy Committee (MPC) meeting held from December 3 to 5.
• The committee unanimously decided to cut the rate with immediate effect.
• The rate cut comes after GDP growth of 8.2% in the second quarter of the current financial year.
• India's retail inflation levels stood at record-low of 0.25 percent in October 2025.
• In the previous monetary policy review on October 1, MPC decided to keep the repo rate unchanged at 5.5 percent.
• The MPC meetings were held between September 29 and October 1.
• The rate cut would increase liquidity and support continued economic momentum.

Topic: Regulatory Bodies/Financial Institutions

6. Single Window Access introduced by SEBI for low-risk foreign investors.

• Markets regulator SEBI introduced a single-window framework, Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI), for low-risk foreign investors in the Indian securities market.
• The system will simplify registration, compliance, and documentation for identified low-risk investors.
• SWAGAT-FI applies to government funds, central banks, sovereign wealth funds, multilateral entities, regulated insurance companies, and pension funds.
• The framework was notified on December 1 for FPIs and Foreign Venture Capital Investors (FVCIs) and will come into force from June 1, 2026.
• SWAGAT-FIs applying for registration can also register under FVCI without additional documentation.
• Registration under both FPI and FVCI regulations will enable investments in listed equities, debt securities, and unlisted companies in specified sectors.
• The periodicity for continuance of registration, including KYC and fees, was increased from 3–5 years to 10 years.
• Retail schemes in IFSCs with Indian sponsors will now be allowed to register as FPIs to ease operations.
• Sponsor contribution limits were amended to 10% of fund corpus to align with IFSCA regulations and avoid non-compliance risks.
• As of June 30, 2025, India had 11,913 registered FPIs with Rs 80.83 lakh crore assets, and SWAGAT-FIs are estimated to hold over 70% of these assets.

Topic: Reports and Indices

7. Global Rankings released for the Women, Peace and Security Index 2025/26.

• The list of the top 10 best and worst performers in the Women, Peace and Security (WPS) Index 2025/26 was released in a recent report.
• The WPS Index is compiled by the Georgetown Institute for Women, Peace and Security and the Peace Research Institute Oslo.
• The report states that around 676 million women experienced conflict in the past year—a 74% rise since 2010.
• India was ranked 131st with a score of 0.607, showing gradual but uneven progress.
• The index evaluates 181 countries across three dimensions: inclusion, justice, and security.
• Denmark retained the No. 1 position, followed by Iceland and Norway.
• Afghanistan continues to stay at the bottom, scoring more than three times lower than Denmark.
• The United States improved its rank from 37th to 31st due to better maternal mortality rates.

Topic: Summits/Conferences/Meetings

8. The 18th Plenary of the Global Forum on Tax Transparency was inaugurated by the Finance Minister.

• On 2 November, the 18th plenary meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes was inaugurated in New Delhi by Union Finance Minister Nirmala Sitharaman.
• The plenary hosted by India from 2nd to 5th December 2025 under the theme “Tax Transparency: Delivering a Shared Vision Through International Cooperation.”
• The Global Forum, with 172 member jurisdictions including all G20 nations, is recognised as the primary body for implementing global tax transparency standards such as Exchange of Information on Request (EOIR) and Automatic Exchange of Financial Account Information (AEOI).
• In her address, the Finance Minister stated that the global financial environment has shifted from secrecy toward transparency, now seen as essential for fairness and responsible governance.
• She highlighted that voluntary tax compliance in India has increased due to simplification, clarity and trust-based governance mechanisms.
• The Minister emphasised that technology and AI are being utilised for analysing financial information, while warning that innovation should still follow established procedures.
• She added that deeper cooperation among nations is required to manage new challenges like digital taxation and emerging forms of beneficial ownership.
• It was underlined by Revenue Secretary Arvind Shrivastava that India has effectively implemented AEOI since 2017 using secure IT systems and data analytics to generate actionable intelligence.
• The plenary schedule includes peer reviews, panel discussions, regional progress updates and deliberations on crypto-asset reporting frameworks and global risk assessments.