RBI proposal to curb NBFCs' revolving credit may choke MSME funding, says industry body FISME
The Federation of Indian Micro and Small & Medium Enterprises (FISME) has urged the RBI to reconsider its proposal to prohibit NBFCs from offering revolving credit. FISME warns that a blanket ban could severely disrupt working capital finance for MSMEs, which rely on such credit to manage cash flow gaps.
Why it matters
This proposal from the RBI indicates a potential tightening of regulatory oversight on NBFC lending practices, particularly concerning the structure of credit products. Eliminating revolving credit could force NBFCs to restructure their offerings, potentially reducing flexibility for MSMEs and altering the competitive landscape between banks and NBFCs for this segment.
The Economic Times · Wed, 26 August 2026
Read more →Indian banks likely to sustain healthy growth in FY27: Bernstein
Bernstein projects healthy growth for Indian banks in FY27, driven by stronger lending, easing margin concerns, and stable asset quality. Private banks are also expected to continue narrowing the growth gap with their public sector counterparts.
Why it matters
This forecast signals continued expansion in credit markets and potentially improved profitability for banks. Favorable macroeconomic conditions and effective bad loan management are contributing to a positive outlook. The narrowing growth gap suggests increased competition and innovation across the sector, with private banks gaining market share.
The Hindu BusinessLine · Wed, 26 August 2026
Read more →Carlisle Investors to approach PMO over alleged HDFC Bank mis-selling
A group of investors plans to approach the Prime Minister's Office and the Reserve Bank of India this week, alleging mis-selling of a Carlisle product by HDFC Bank. They claim substantial losses and are exploring legal action against the bank for alleged client-suitability lapses.
Why it matters
Allegations of mis-selling, particularly involving complex financial products, pose significant reputational and regulatory risks for banks. This incident highlights the critical importance of robust compliance frameworks, thorough client suitability assessments, and transparent disclosure practices, especially for wealth management divisions.
The Economic Times · Wed, 26 August 2026
Read more →Three major Indian banks raise over $1.85 billion in offshore bonds, signalling strong global market participation
Axis Bank, Kotak Mahindra Bank, and Union Bank of India collectively raised over $1.85 billion through offshore bond issuances this week. These successful placements in international debt markets underscore robust global investor confidence in Indian banks.
Why it matters
The ability of Indian banks to tap international bond markets for substantial funding indicates strong global liquidity and investor appetite for Indian credit. This diversified funding not only supports balance sheet growth but also optimizes cost of funds, enhancing capital adequacy and supporting further domestic credit expansion.
The Hindu BusinessLine · Wed, 26 August 2026
Read more →Food prices on the rise, domestic demand keeps economy strong
India's economy continues to show resilience, driven by improved domestic demand and strong economic activity, particularly in manufacturing and services. However, rising food prices pose a concern for monetary policymakers, amidst ongoing global geopolitical uncertainties.
Why it matters
Persistent high food inflation could influence the RBI's monetary policy decisions, potentially limiting room for future rate cuts despite underlying economic strength. Banks should monitor inflation trends for their impact on consumer spending, deposit growth, and potential credit quality risks in certain segments.
The Economic Times · Wed, 26 August 2026
Read more →Bank holiday today, 26 August: Will SBI, HDFC and others remain open on Eid-e-Milad-un-Nabi?
Banks in several Indian states will observe a holiday today, August 26, for Eid-e-Milad-un-Nabi, a festival celebrating the birth of Prophet Muhammad. This may affect branch operations and certain financial transactions in specific regions.
Why it matters
Regional bank holidays can lead to temporary disruptions in banking services, including branch banking, cheque clearing, and settlement systems. Banks should ensure customers are adequately informed about service availability and digital alternatives for urgent transactions during holidays.
Livemint · Wed, 26 August 2026
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