Ten-year bond yield hits 7.19%, highest in two years
Yields on the benchmark 10-year government bond have surged to 7.19%, marking their highest level since April 2024. This increase is primarily attributed to a sharp rise in global oil prices and a general uptick in global bond yields. The Reserve Bank of India has been active in open market operations, aiming to manage liquidity in the banking system. Bond traders are reportedly facing losses as the rising yields negatively impact the value of previously purchased bonds.
Why it matters
A rising bond yield signals higher borrowing costs for the government, which can ripple through the economy to corporate and retail loans. For banks, higher yields can erode the value of their existing bond portfolios, impacting treasury performance. This trend could also make government securities more attractive, potentially drawing funds away from bank deposits or corporate bonds, affecting banks' funding costs.
The Economic Times · Tue, 29 September 2026
Read more →RBI completes 1 trillion rupee net debt sale for first time in a decade
India's central bank has achieved a significant milestone by recording net sales of bonds amounting to ₹1 trillion this financial year, a first in a decade. Market analysts predict this figure could double by December, suggesting a possible move towards stricter monetary policies. The Reserve Bank of India has also been reducing liquidity (the amount of cash easily available in the banking system) within the banking system, a strategic response to past policies aimed at attracting foreign currency.
Why it matters
The RBI's substantial net bond sales are a clear signal of its intent to manage surplus liquidity and potentially rein in inflation. For banks, this means a tighter liquidity environment, which could increase the cost of funds and impact credit growth. It also suggests that the central bank is prepared to use market operations decisively to achieve its monetary policy objectives.
The Economic Times · Tue, 29 September 2026
Read more →Insurance mis-selling is arising because upfront commissions are too high: IRDAI chairman Ajay Seth
IRDAI chairman Ajay Seth stated that high upfront commissions contribute to mis-selling in the insurance sector. He urged insurers to pass on savings from reduced commissions and operational costs to policyholders through lower premiums, improved returns, or better claims payouts. The regulator's proposed tighter limits on commissions and expenses are designed to boost affordability, curb mis-selling (selling a product that doesn't meet a customer's needs, often due to high commissions), and reduce the practice of compulsory bundling.
Why it matters
New IRDAI guidelines, aimed at improving product affordability and curbing mis-selling, will directly impact the revenue models of insurance companies, including those owned by banks. The focus on cost efficiency and lower commissions could compress margins for distributors, including bank bancassurance channels, and require a re-evaluation of sales incentives and product pricing strategies. Smaller insurers, as noted in other reports, might find it harder to adapt.
The Economic Times · Tue, 29 September 2026
Read more →₹2,000+ UPI payment charges: SC refuses interim stay on 0.4% MDR, issues notice to govt, RBI, NPCI and others
The Supreme Court has declined to grant an interim stay on the government’s new merchant discount rate (MDR) policy, which imposes a 0.4% charge on specific Unified Payments Interface (UPI) transactions exceeding ₹2,000. This decision comes despite a public interest litigation challenging the legality of this levy. Notices have been issued to the government, the Reserve Bank of India, the National Payments Corporation of India (NPCI), which operates the UPI network, and other involved financial organizations. For now, the new policy remains in effect.
Why it matters
The Supreme Court's refusal to grant an interim stay means the 0.4% MDR on UPI transactions above ₹2,000 remains in force. This will continue to impact merchants and consumers, potentially shifting payment behaviours for higher-value transactions. Banks that act as acquirers for UPI transactions will continue to earn revenue from this MDR, though the long-term impact on UPI adoption rates for larger payments bears watching. It signals a cautious approach from the judiciary on payment policy interventions.
The Economic Times · Tue, 29 September 2026
Read more →IndusInd Bank eyes India’s 2,117 GCCs with new banking vertical
IndusInd Bank has launched a new banking vertical specifically designed for Global Capability Centres (GCCs) operating within India. This initiative is aimed at addressing the growing and evolving banking needs of these centres as they expand their operations in the country. The new vertical integrates corporate and employee banking services into a unified relationship, and importantly, it also includes foreign-currency account services, crucial for managing cross-border transactions.
Why it matters
IndusInd Bank's strategic focus on GCCs highlights a growing and underserved segment in India's corporate banking landscape. These centres often have complex financial requirements, including foreign exchange management, payroll for expatriates, and corporate financing, making them attractive clients. By offering tailored solutions, banks can capture significant business from these expanding global entities, indicating a potential niche market for other banks to explore or compete in.
The Economic Times · Tue, 29 September 2026
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