RBI warns banks against a loan price war
The Reserve Bank of India has cautioned commercial banks against engaging in an aggressive loan price war, especially during periods of high liquidity. The regulator expressed concern that such aggressive lending, driven by the need to generate returns on deposits, could lead to a deterioration in asset quality and create a new cycle of non-performing assets in a few years.
Why it matters
This is a pre-emptive warning from the RBI, indicating vigilance over banks' lending practices. Despite ample liquidity, the central bank wants to avoid a repeat of past credit cycles where rapid, unchecked loan growth led to future NPAs. Banks are expected to maintain prudential lending standards.
The Economic Times · Wed, 23 September 2026
Read more →Big to get bigger: India's UPI fee shift to entrench dominant incumbents
India's new UPI merchant fee regime, which introduces a 0.4% charge on merchant transactions above ₹2,000, is projected to significantly benefit dominant payment apps like PhonePe and Google Pay. Bernstein estimates these platforms could collectively earn approximately $900 million annually by March 2028. This move is expected to strengthen their market position, encourage expansion into rural areas, and prompt smaller rivals to focus on higher-value transactions.
Why it matters
The implementation of MDR on UPI transactions signals a shift towards monetizing the digital payments ecosystem. While it aims to fund infrastructure and security, it will disproportionately benefit large players with established merchant networks, potentially concentrating market power. It also marks a departure from the long-standing 'zero MDR' policy.
The Economic Times · Wed, 23 September 2026
Read more →PhonePe’s UAE push is more than UPI: What its first overseas licences mean
PhonePe has secured in-principle approval for two payment licenses from the UAE central bank, marking its first overseas regulatory approvals. While initially focused on facilitating UPI payments for Indian tourists in the UAE, PhonePe plans to expand beyond UPI to support local payment schemes like Aani and Jaywan. This initiative aims to deepen its presence in the region's digital payments ecosystem.
Why it matters
This represents a significant step for Indian fintechs in global expansion, leveraging India's robust digital payments expertise. By integrating with local payment systems, PhonePe aims for broader market penetration beyond just expatriates, potentially setting a precedent for other Indian payment service providers.
Livemint · Wed, 23 September 2026
Read more →With no resolution to its demand for 5-day banking, Banking unions to go ahead with 3-day strike
Banking unions are proceeding with a three-day strike starting September 28, following the Indian Banks' Association (IBA)'s inability to resolve their demand for a five-day banking week. While the IBA noted that the productivity-linked incentive scheme for Scale IV officers and above has been kept in abeyance as per government instructions, the core demand remains unaddressed.
Why it matters
The impending strike will disrupt banking services significantly, especially coinciding with the half-yearly closing of accounts. This highlights ongoing labor tensions within the banking sector over working conditions and benefits, with a direct impact on operational efficiency and customer transactions.
The Hindu BusinessLine · Wed, 23 September 2026
Read more →Scheduled Commercial Banks’ supervisory data quality score rises to 93.3 in June, says RBI
The Reserve Bank of India reported that the supervisory data quality score for Scheduled Commercial Banks (SCBs) increased to 93.3 in June. Small Finance Banks (SFBs) led this improvement with a score of 93.8, while Public Sector Banks (PSBs) and Foreign Banks achieved 93.7. All categories of banks maintained their position within the 'good' band for data quality.
Why it matters
Improved data quality scores across SCBs indicate enhanced compliance and reporting accuracy to the RBI, which is crucial for effective regulatory oversight and risk assessment. This suggests banks are investing in their data infrastructure and governance, leading to more reliable supervisory data.
The Hindu BusinessLine · Wed, 23 September 2026
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